I hope everyone had a good Easter weekend! It was a short week in Juneau as many people headed home for Easter. Tomorrow is day 90 of the legislative session, which means another year of not finishing by the statutory deadline. The big news this week was Governor Mike Dunleavy’s (R – Alaska) veto of the education bill that increased the Base Student Allocation (BSA) by $1,000. A joint session to consider a veto override is supposed to happen on Tuesday, though it has not been scheduled yet. And the House finally passed an operating budget that managed to considerably lower the deficit, while the Senate passed a bare bones capital budget. 

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House passes operating budget with lower deficit, Senate passes bare bones capital budget

The following is an excerpt from this week’s edition of the Alaska Political Report. You can click here for more information about the Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. Our coverage of the budget starts with the governor’s proposed budget, and we track everything in detail through the entire process. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

After two full days of amendments and debate, the House passed their version of the operating budget on Wednesday, April 16. They considered 79 amendments and passed 19. The net impact of the amendments reduced the budget by $1.55 billion Unrestricted General Funds (UGF), leaving a deficit of approximately $242 million. While the budget they are passing to the Senate still has a deficit, it is far smaller than the deficit they started with in January. They still haven’t passed the Mental Health budget, however, they finished hearing amendments to the bill on Wednesday and will likely pass it when they return from the Easter break.

On Tuesday, April 15 the Senate unanimously passed their version of the capital budget. It is identical to the version we covered last week that came out of Senate Finance and is significantly constrained when compared to the version proposed by GOP Gov. Mike Dunleavy.

When compared to the Governor’s budget, the actions taken by the Legislature to date have reduced the projected deficit by about $1.4 billion. This mostly comes from a shift to a 75/25 Permanent Fund Dividend (PFD) payment of about $1,400 per person offset by a $1,000 increase to the Base Student Allocation (BSA). Gov. Dunleavy vetoed the education bill, but the House operating budget has contingency language that if no permanent increased is passed, there would be a one-time BSA increase of $1,000.

The operating and capital bills will now be exchanged between the two legislative bodies. House Finance has scheduled a hearing on the Senate capital budget for next Wednesday, April 23. The Senate subcommittees have closed out and will soon merge their changes into the House operating budget. The final budget will be worked out in a conference committee between the House and Senate, and then be subject to an up or down vote by each body.

If you would like to see the rest of this section, as well as our more detailed coverage of the legislative session, consider subscribing to the Alaska Political Report. Email jeff@akpoliticalreport.com for a copy of the latest special report. 

Dunleavy vetoes education bill, again 

Just like last year when he vetoed Senate Bill 140, Governor Dunleavy vetoed House Bill 69 this week. The main difference is it was widely thought last year he would not veto SB 140 because in addition to the BSA increase of $680, that bill included a few of his priorities and it was an election year. The Legislature failed to override his veto of SB 140 by one vote.

My guess is at that point last year Dunleavy thought he was in the running for a job in the Trump administration if Trump prevailed, which he did, and by vetoing the bill he could say he stopped some union cash grab. That veto, however, backfired and contributed to the loss of some Republican seats in last year’s election. 

HB 69 is a different animal. The Legislature stripped all the policy changes from the bill and only kept the $1,000 BSA increase. Much of this was for political reasons. They are tired of negotiating with an absent governor and are fine with putting vulnerable Republicans in tough positions in next year’s election.   

While the override vote of SB 140 was close, the override vote of HB 69 will not be. First, all three Senate Finance co-chairs voted against the bill. They are not going to vote to override a bill they voted against. And people like Representative Will Stapp (R – Fairbanks) who voted for SB 140 last year and voted to override Dunleavy, did not vote for HB 69. So Stapp will also be a no on override. Overriding a veto of a non-appropriation bill takes 40 votes. My bet is the vote on overriding HB 69 will be less than 35 votes.  

In a press conference on Thursday (4/17/2025) Dunleavy said he will be introducing a new education bill soon. But with only a month left and the relationship between Dunleavy and the Legislature in bad shape, the odds of them passing a bill in a month that everyone agrees on is low. The most likely outcome is another one-time increase to the BSA and another big education fight next year, or potentially a special session on education later this year.  

This Week’s Loose Unit 

This week’s Loose Unit is all the disingenuous PFD lunatics. Let’s start with Governor Dunleavy, who put a full statutory PFD in his budget. This would cost $2.5 billion. For some perspective, this represents 40% of projected yearly revenues to the state. Dunleavy offered no budget cuts or new revenues to pay for this, instead proposing to spend half of the remaining balance in the Constitutional Budget Reserve (just under $3 billion). Very loose. 

This delusion was promoted by the four Republicans on the House Finance Committee plus two Democratic members of the majority on the committee. It took a nuclear move by the House majority to get a floor amendment passed last week to lower the full PFD (a Landmine story on that extremely loose situation will be out soon). But this did not stop many Republicans in the House minority from continuing to promote the full PFD delusion during budget debate. 

While I disagree with the few who promote all kinds of new taxes to pay a full PFD, at least they are honest about it. The vast majority of those who promote the full PFD delusion do so because it’s easy to promise people free money and blame it on those who are in charge. But they all know the truth – we can’t afford it. They also fail to mention the formula was adopted in the 1980s when the fund was mostly invested in bonds, not stocks, real estate, and private equity. 

The PFD has infected and poisoned Alaska politics like nothing else. Few elected officials tell the truth about it and most use it to score cheap political points. It’s unfair to the public to be promised or told something by people who know it’s not possible. Classic Loose Unit behavior. 

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.