Skipping the usual news conference — usually an opportunity to directly berate reporters — Alaska Republican Gov. Mike Dunleavy rolled out his budget proposal last week, unveiling a visionless spending plan for his final year in office.
The proposal is largely status quo, proposing no major cuts or increases to state services and infrastructure spending, and once again includes an aint-gonna-happen dividend payout of $3,650 to every eligible Alaskan. In doing so, he’s proposing his largest deficit yet of $1.8 billion, which if approved, would drain about two-thirds of the state’s key savings account.
In his prepared remarks, Dunleavy framed it as yet another tough financial year while ignoring the fact that much of the state’s current fiscal situation stems from his refusal to meaningfully consider any solutions over the last seven years.
“This year’s budget is very tight,” he said in a pre-filmed video. “As a result, it will be difficult to fund the many things Alaskans wish to have in the budget.”
Judging by the entirety of Dunleavy’s time in office, the first thing to go will be that large dividend.
Legislators have ignored the statutory dividend formula ever since oil revenue — once the main source of state revenue — cratered in the early 2010s. The investment revenue from the Alaska Permanent Fund now covers much of the state’s expenses, leaving enough for a roughly $1,000 dividend payout in recent years. Legislators have tried and failed to address the state’s budget deficit for years, but have frequently run headlong into Dunleavy’s staunch opposition to any form of new taxes or revenue. He’s vetoed a bill that would have raised taxes on vapes as well as another that would have shifted corporate income tax revenue from other states to Alaska.
While Dunleavy has blocked efforts to raise revenue, he also hasn’t been any help on the other side of the ledger. When it comes to state spending, Dunleavy has also abandoned efforts to make meaningful cuts. Instead, the state has seen a steady increase in things like spending on prisons.
The stalemate has hobbled the state’s ability to invest in itself, particularly in the realm of public school education, where funding has fallen well behind inflation during Dunleavy’s time in office.
Dunleavy has opposed increasing the baseline funding for public schools, twisting himself into contortions to argue that funding isn’t necessarily a fix for overcrowded classrooms or the revolving door of teachers. He even went so far as to veto an increase in school funding, only to have legislators override his veto in a landmark, bipartisan vote. Still, Dunleavy stuck it to schools with his veto of the corporate income tax bill, which would have helped fund reading programs and vocational education.
In Juneau, Dunleavy has earned a reputation for being detached, uninvolved and uninterested in the legislative process, leaving the difficult and unpopular task of balancing the state’s budget to legislators. Still, many of the efforts to coalesce around new revenue options have been killed by Dunleavy’s last-minute threats of a veto. The lack of leadership has left legislators rudderless, and Dunleavy has been seen more often than not as a roadblock than a partner at the table.
In 2023, his administration teased a sales tax and other revenue before balking and introducing nothing. Other proposals, such as legalized gambling and carbon-capture measures, have not gained traction with legislators or investors.
“The administration has failed to invest early on, politically and intellectually, in overall fiscal policy,” House Finance Committee co-chair Rep. Andy Josephson told the Anchorage Daily News at the end of the 2025 session. “As a consequence, we‘re just standing in place.”
Still, Dunleavy wants everyone to know that this year, he’s actually interested in solving the problem that’s been in front of him for the entirety of his time in office.
In his announcement, he said he’s going to release the framework for a fiscal plan ahead of the 2026 legislative session, yet didn’t offer a single detail about what that might be.
While the newfound, eleventh-hour interest in addressing the state’s budget was welcome news to lawmakers, they were also skeptical that it would amount to much. They noted that making major changes to the state’s budget — whether through big cuts, new taxes, or a combination of both — requires input from Alaskans, but Dunleavy has shown little interest in that input.
House Speaker Bryce Edgmon told the ADN that he was open to the work but skeptical that it would amount to much without that buy-in.
“To put together a fiscal plan during an election year without having laid the groundwork around the state and all the foundational work that should occur with constituencies beforehand, certainly lends itself to more pessimism than optimism for any kind of major action this next session,” he said.
Instead, it looks like the governor’s leaving a multi-billion-dollar mess for the next guy.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
