Governor releases budget

Gov. Mike Dunleavy released the proposed Fiscal Year 2027 (July 1, 2026 – June 30, 2027) budget on December 11, 2025. The Department of Revenue forecasts that Alaska will receive $15.3 billion in total state revenue in FY 2027, with $6.2 billion of Unrestricted General Fund Revenue available for appropriation by the Legislature.

With declining revenue forecasts and increased costs driven by inflation, Governor Dunleavy’s proposed budget fully funds constitutional obligations such as healthcare and education, while limiting discretionary spending. The proposed budget sees $3.8 billion going to the Department of Health, with the majority of that going to Medicaid Services. Nearly $3 billion will be spent on education.

Alaska has been experiencing a decline in revenue in part because of lower oil prices, and according to the proposal, the Department of Revenue forecasts revenue will remain at lower levels in FY 2027.

The Governor’s budget proposal also includes a full statutory Permanent Fund Dividend worth $3,650 for each Alaskan resident. If approved by the legislature, it would be the largest PFD check in the state’s history. Just this past year, Alaskans received a $1,000 PFD check. Alaskans.

However, the budget requires drawing $1.5 billion from the state’s main savings account, the Constitutional Budget Reserve (CBR). The CBR balance is currently around $3 billion.

“For decades, politicians have talked about the need for a long-term fiscal plan to stabilize state finances. Yet time and time again, those conversations have ended with no action. This inaction is why Alaska has the most unstable fiscal approach in the country.”

The Governor said he hopes the legislature will act on his proposed budget, adding that raising taxes on residents and businesses that already call Alaska home is “anti-growth,” and his plan instead focuses on predictable revenues, built on a stronger private section, limiting the growth of government, and taking advantage of opportunities already available, as well as diversifying the economy to broaden economic opportunities and not be a state economy solely reliant on oil.

“Alaska’s future is bright, but we have to have discipline and be forward-thinking now so that our short-term budget challenges don’t turn into long-term burdens on Alaskan families and businesses. If we make the right choices today, we can lay the foundation for prosperity for Alaska for decades to come.”

For more information of the Governor's proposed budget, please visit www.gov.alaska.gov/fy-2027-budget-at-a-glance/