We are more than one month into the legislative session and things finally went of the rails this week! At least they did in the House. After a big fight on the House floor, a bill to massively increase per student funding was discharged from the House Education Committee. It then moved out of the House Finance Committee less than an hour into its first hearing! In a bizarre hearing, the Senate Resources Committee heard a bill from Senator Rob Yundt (R – Wasilla) that aims to apply Alaska’s corporate tax to Hilcorp. Governor Mike Dunleavy (R – Alaska) released his amended budget, adding more money to his original proposal in December. And Representative Nick Begich (R – Alaska) gave his first speech to a joint session of the Legislature. 

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Gov. Dunleavy releases FY2026 amended budget with proposed spending increase

The following is an excerpt from a special 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.

Feb. 19 was the statutory deadline for GOP Gov. Mike Dunleavy to submit budget amendments to the Legislature. The amendments released this week increase the Governor’s FY2026 budget by $44 million in unrestricted general funds (UGF). He also included several amendments to his FY2025 supplemental budget that result in a net decrease of $13 million UGF.

When looking at the budget from a high level summary, the amendments have effectively no change in the Governor’s proposed fiscal position. He maintains a $1.6 billion deficit in FY26 and, even with the decrease in supplemental requests, the FY25 budget is still underwater by $162 million.

The amendments do solve a few unknowns which will help the Legislature in their budget process. We now have an estimate of cost for the Medicaid program and the Governor’s new proposed Department of Agriculture. There are some outstanding items though; several of the state employee bargaining units have not finalized salary negotiations for FY26. Those negotiations could result in a wide range of costs but the Division of Legislative Finance has been using a place holder of $29 million since that roughly equates to a 3% cost of living adjustment.

At the Governor’s amended operating and capital spending levels, reserving money for the union negotiations, the Legislature has roughly $930 million to split between the Permanent Fund Dividend, K-12, and any other legislative priorities. That’s roughly enough to fund education at the FY25 level and pay a $1,000 PFD. That plan, though, leaves the state with little to no revenue for unanticipated changes in oil price or emergencies next year.

Ultimately, legislators can’t make firm decisions on spending priorities until the Spring Revenue Forecast is released. The good news is that daily oil prices are up from early December when the existing forecast was released. They are, however, down from mid-January. The forecast should be updated sometime in mid-March or early April.

Within the amendment package there are several items of note:

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. 

Other Happenings 

Senator Yundt presented his bill, SB 92, to the Senate Resources Committee on Wednesday (2/19/2025). It was a bizarre hearing. First, Senator Cathy Giessel (R – Anchorage), the chair of the committee, opened up with a long lecture about how the tax code treats different types of corporations and how Alaska’s tax laws work. This was before Yundt said a word. Yundt sat at the table with his staffer Ryan McKee, who looked like a hostage.

When Senator Bill Wielechowski (D – Anchorage) and others asked officials from the Department of Revenue basic questions about oil taxes, they struggled to give answers and continually hid behind “taxpayer confidentially. At one point Senator Shelley Hughes (R – Palmer), who is in the minority with Yundt, told Yundt he spoke on a a panel during the election where he said he would not support raising oil taxes, and asked when he changed his mind. Yundt responded, “I have no idea what panel you are talking about, so if you could please get that information and then make it public… I have no idea what you are talking about.” It was a very strange hearing. 

Representative Nick Begich gave his first speech to the Legislature on Thursday (2/20/2025). You can watch it here. His speech was less than 20 minutes. I love keeping it short and sweet! He then spent 25 minutes taking questions from various legislators. Some were tough and pointed but he did a good job answering them. There was a very funny moment when he took a question from Representative Genevieve Mina (D – Anchorage) about Medicaid. He talked about adding work requirements for able bodied people, and said they need to work or volunteer 80 hours a week. He said it twice. Then he realized the mistake and said he meant 80 hours a month. The whole room was laughing. A few comments like “damn they are really cracking down on this stuff!” 

Several contractors will be in Juneau this week to meet with legislators and Transportation officials about the longstanding problems with the STIP. The Department of Transportation (DOT) has failed to answer questions about why things have been so messed up the last few years. This letter that the Associated General Contractors and American Council of Engineering Companies sent to Governor Dunleavy last month lays out the serious problems with DOT getting construction projects funded. 

The University of Alaska Board of Regents passed this resolution to eliminate references to affirmative action and diversity, equity, and inclusion, known as DEI. The vote was 9-1, with the student region being the sole no vote. This is in response to President Donald Trump’s executive orders calling for an end to DEI programs. 

Year-end APOC reports were due this week. They show what campaigns and groups raised and spent right before the November general election and after. There are some real gems in the reports. Consider subscribing to the Alaska Political Report to get a full breakdown of all the reports, which were provided in this week’s edition.  

The Harding Lake Mafia was back in Juneau this week. They made a presentation to the House Transportation Committee. If they had their way, no trucks would be allowed to carry ore from Manh Choh mine to Kinross’ mill. Unfortunately, NIMBYism is alive and well in the State of Alaska.

It’s sad it takes a tweet from the Korean Embassy for the Alaska public to know where Governor Dunleavy is. 

Representative Jubilee Underwood (R – Wasilla) left Anna Taylor, the deputy director of the Alaska Institute for Justice, stumped when she asked her about illegal immigration. Taylor was one of many speakers at a House Judiciary Committee hearing about immigration in Alaska. 

This Week’s Loose Unit

This week was an easy one. This week’s Loose Unit is Representative Mike Prax (R – North Pole). First, to get some context you should read this article I wrote, “Back to normal: Alaska House goes fully off the rails for the kids.” 

Basically, the House spent a long time on Wednesday trying to discharge HB 69 – a bill from Representative Rebecca Himschoot (I – Sitka) that aims to massively increase per student funding in Alaska – from the House Education Committee. Because Representative Maxine Dibert (D – Fairbanks) is sick and in the hospital, the committee did not have the votes to move out the bill.

So the House majority got a bit loose and tried to do it form the floor. But because they only have 21 members (the bare minimum) they made an argument based on a legal opinion from their lawyer that they could do it with 20 votes instead of 21. Long story short, at best it’s a manufactured loophole.

Anyhoo, after a ton of debate, where nearly every member spoke, the vote took place. The Republican minority was clearly against discharging the bill. But Prax voted yes! This gave the majority 21 votes instead of 20. It was a classic Loose Unit move. After, Prax told reporters he “pressed the wrong button.” Maximum loose.  

There may be more to the story. From my article linked above:

I suspect Prax may have had ulterior motives. Last year, former Representative Jesse Sumner moved a bunch of bills out of the House Health and Social Services Committee, which Prax then chaired. Prax had refused to move the bills, but he was at another meeting when Sumner made his move. The next committee stop for the bills was a committee that Sumner chaired. So Sumner did what Sumner does. Representative Justin Ruffridge (R – Soldotna) was chairing the committee and just went along with it. To be fair, he probably had no idea what Sumner was doing. It pissed off Prax something awful. I think this may have been Prax’s revenge!

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.