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NEWS: Senate Passes a Balanced FY27 Operating Budget with $46 Million in Reserves for 2027 Supplemental Needs
Senate Passes a Balanced FY27 Operating Budget with $46 Million in Reserves for 2027 Supplemental Needs
Budget Funds Essential State Services and Provides Energy Relief for Public Schools, Communities, and Alaskans
Juneau, AK – Today, the Alaska State Senate passed, by a vote of 17-3, a fiscally responsible operating budget. House Bill 263 is balanced on an average oil price of $73 per barrel, $2 below the Department of Revenue’s spring forecast. The budget plan leaves $46 million unspent for supplemental needs in the next legislative session. The budget funds core state services across all agencies while maintaining the state's financial stability.
Energy Relief
In addition to the formula-based $1.27 billion going to K-12 public education, the budget directs $140 million more to Alaska’s school districts. That includes a one-time $111 million investment outside the Base Student Allocation, as well as $29.1 million in energy relief grants. The budget provides a full $30 million in community assistance payments in FY27 and brings the balance of the community assistance fund back up to $90 million so the FY28 community assistance payout will be $30 million. Communities will also receive an additional $20 million base payment this year to offset high fuel and shipping costs, and Alaskans will see a $150 energy relief payment added to their Permanent Fund Dividend.
Common Sense Governing
The budget also includes provisions for longer-term cost management. The Department of Corrections has been among the fastest-growing areas of state government, and the budget funds a $650,000 independent study to identify the primary drivers of that growth. On the education side, it appropriates $400,000 for a Base Student Allocation adequacy study to determine whether current funding levels cover the actual cost of delivering a constitutionally adequate education in Alaska. Both studies are intended to provide the next Governor and Legislature with additional tools to make informed budgetary decisions.
"This budget reflects the Senate's commitment to spending within our means to protect Alaska's fiscal future. By budgeting at $73 a barrel and holding reserves for next year’s supplemental, we are being wise with our temporary revenue windfall,” said Senator Lyman Hoffman, D-Bethel. "The war in Iran has provided a spike in revenue to the state, but at the same time has hurt the average Alaskan. That is why we’ve funded what we could for energy relief to individuals, communities, and school districts.”
Other notable items in the FY27 operating budget include:
- PERS contributions increased from $75.3 million to $106.3 million, and TRS contributions increased from $157.2 million to $164.1 million, both meeting actuarially determined levels recommended by the Alaska Retirement Management Board;
- $60.6 million for wildfire suppression;
- $48 million for the disaster relief; and
- $272.2 million multi-year federal appropriation for rural health transformation.
The budget now moves to the House of Representatives for a concurrence vote, then to a conference committee to resolve differences between the House and Senate versions.
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