I hope everyone had a good Memorial Day weekend! I took the ferry to Haines from Juneau early Friday morning with some friends. I spent Saturday at the Haines Beerfest, which was a lot of fun. I spent the entire day yesterday driving back with a buddy. The drive took 12 hours! So the Sunday Minefield is a day late this week. 

The first session of the 34th Alaska Legislature concluded on Tuesday (5/20/2025), one day before the constitutional limit! The budget is still awaiting transmittal to Governor Mike Dunleavy (R – Alaska). Dunleavy vetoed House Bill 57, the education bill that increased per student spending by $700. The next day, the Legislature voted 46-14 to override Dunleavy’s veto, the first veto override in Alaska since 2009. Several key bills were not able to get over the finish line. Two prominent Alaskans are now working in politically appointed positions at the Department of the Interior. And following the conclusion of session, several incumbent legislators and challengers filed letter of intent to run in next year’s election. 

A friendly message and reminder to all our readers. The Landmine is made possible by myself and a team of awesome Alaskans. I have been covering the legislative session in Juneau for the last seven years and just returned from Juneau. If you enjoy the content we provide, please consider making a one time or recurring monthly donation. You can click here to donate. We have a system that makes it super easy. We would really appreciate it. And thanks to everyone who has been supportive.   

The FY2026 budget is done but uncertainty remains with FY2025 deficit

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.

The Legislature completed its work this week, adopting the conference committee report and adjourning the 2025 session. The budget passed by the Legislature totals $6.07 billion Unrestricted General Funds (UGF) in FY2026. In their spring forecast, released March 12, the Dept. of Revenue projected revenue of $6.13 billion. This leaves an estimated $56 million surplus in the coming fiscal year. When compared to the GOP Gov. Mike Dunleavy’s proposed budget, the Legislature achieved a $1.75 billion positive adjustment to the state’s fiscal position.

FY2025 Deficit

Although the Legislature approved the conference committee report, the vote on accessing the Constitutional Budget Reserve (CBR) did not receive the required three-quarter vote from the House.

With the failed CBR vote, the contingency language included in the budget will be enacted instead. This language directs the first $100 million of the shortfall to come from the uncommitted cash holdings of the Alaska Industrial Development and Export Authority (AIDEA). In their most recent financial statements, AIDEA shows $375 million in cash, of that $101 million is reserved for known commitments, leaving $274 million available.

If the draw from AIDEA isn’t sufficient to cover the FY25 shortfall, the remainder will come from the Higher Education Investment fund (HEIF), which currently holds $400 million. The draw from the HEIF is not limited in amount. The state’s scholarship programs are funded through a seven percent draw from the value of the fund, about $33 million in FY26. Any draw from the fund will proportionally reduce the amount available for FY27 scholarships.

Gov. Dunleavy has the ability to veto the draw from AIDEA’s reserves and direct the full deficit towards the balance of the HEIF, further reducing the money available for scholarships.

The amount of FY25 deficit is currently estimated to be $193 million, but that assumes all appropriations are fully spent. It is likely there will be some amount of lapse from unfilled positions and other state operations that may come in under budget.

Next Steps

Once the budget is transmitted to the Governor, a process that sometimes takes a few weeks, he will have 20 days, less Sundays, to make his veto determinations. That review process has likely already started. The budget must be enacted by July 1, the start of the next fiscal year. 

Generally, only additions made by the Legislature are scrutinized during the veto review process, but this year the Governor sent a letter disavowing his prior budget increases. Given that letter, it is likely the team of advisors doing the final budget review will also scrutinize the few Governor additions that were retained in the Legislature’s final budget.

Perhaps the biggest veto question is the additional funding for K-12 education. The Legislature overrode Gov. Dunleavy’s veto of the statutory change to the education formula. However, the Alaska Constitution gives preference to appropriations, meaning the Governor is not bound to statute in his budget veto decisions. An optimist might rest their faith on the Governor’s rhetoric regarding other statutory funding formulas (follow the law until you change the law), however, he has publicly alluded towards a different philosophy when it comes to education funding.

Elections bills stalled

Two elections bills that were close to passing both fell short. Senate Bill 64 is an omnibus elections reform bill by the Senate Rules Committee. It was introduced in January and started having hearings at the end of March. This was due to negotiations with Republicans. The bill does several things like allowing for a semi-permanent absentee voting option, enhanced ballot tracking, allowing for ballot curing, and cleaning up the voter rolls. Republicans criticized the bill for things like eliminating the witness signature requirement for absentee ballots. 

SB 64 passed the Senate on May 12 by a vote of 14-6, on caucus lines, and was sent to the House. Republicans were successful in stalling the bill in the House Finance Committee. There were attempts in the days before the end of session to get the bill over the finish line, but they failed. There was a desire by supporters of the bill to pass it this session in order to give the Division of Elections time to implement the changes. Negotiations will likely continue in the interim. There may be an effort to get the bill passed quickly after the next session starts.

House Bill 16 is a bill from Representative Calvin Schrage (I – Anchorage) that aims to bring back campaign contribution limits, which have been unlimited since a 2021 court decision tossed out Alaska’s former $500 a year individual-to-candidate contribution limit. It passed the House on April 28 by a vote of 22-18. It was sent to the Senate. After two hearings, it was passed out of the Senate Finance Committee on May 13. The Senate majority did not have the votes to pass the bill.

This bill is effectively dead for two reasons. One, passing it next year would give candidates who file before a big advantage of being able to take unlimited donations over candidates who file next year after a bill is passed. Two, there is a ballot measure for campaign donations limits that should be on the 2026 ballot. Many legislators say it’s a matter better decided by voters.

Other Happenings 

Kara Moriarty is leaving her role as head of the Alaska Oil and Gas Association (AOGA) to become the top advisor for the Department of the Interior in Alaska. Congrats to her! She’s been at AOGA since 2005 and served as CEO since 2012. This is good news for resource development in Alaska. Former Senate President Drue Pearce also took a job at Interior. She is now counselor to the Office of the Assistant Secretary for Land and Minerals Management. Congrats to her as well! Pearce came from the lobbying and law firm Holland & Hart.

After the session ended, a lot of legislative candidates started filing letters of intent for next year’s election. Most notably is Representative Louise Stutes (R – Kodiak), who is running for the Senate seat. Senate President Gary Stevens (R – Kodiak) is retiring next year. He’s been in the Legislature since 2001 (the Senate since 2003). Representative Sarah Vance (R – Homer) also filed a letter but did not indicate an office. Vance could challenge Stutes for the Senate seat, but she would have to give up her safe House seat in an election where Stutes would be by far the favorite. Three people have already filed for Stutes’ House seat. 

Dunleavy really referred to himself ad “big daddy”! Was wild hearing it from in the room. 

This is interesting. The Cruise Lines International Association (CLIA) is suing Skagway over an ordinance they passed in December that taxes sales of excursions sold anywhere in the world rather than just in Skagway. 

The House Republican on Republican violence is getting loose! Check out part of this thread on Amy Demboski’s Facebook page. There’s been some talk that some of the Republicans in the minority might bail out next year. If just one leaves, they will lose on of their five seats on the 11-member finance committee.

This Week’s Loose Unit

This week’s designee is short and sweet. Not surprisingly, Governor Dunleavy vetoed the education bill. That was not that loose considering he vetoed Senate Bill 140 last year and House Bill 69 earlier this year. But where it got loose was the override. The day after the veto, the Legislature held a brief joint session. They voted 46-14 to override the veto.

It’s the first veto overridden in Alaska since 2009 when the Legislature voted to override former Governor Sarah Palin’s veto of federal stimulus money. But that override vote took place after Palin had resigned. This is the first veto override by a sitting Alaska governor since former Governor Tony Knowles was overridden in 2002. That’s 23 years! Very loose. 

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.