Government

Gov. Mike Dunleavy unveiled his proposed state budget on Thursday — but this year, he skipped the usual press conference.

Instead, the governor released a short YouTube video and Facebook Reel outlining his plan.

“Here are the examples of the larger budget items proposed in this year’s budget,” Dunleavy read, “a full Permanent Fund dividend, as called for in law, full funding for K-12 schools and school transportation, continued funding for public safety.”

That full dividend would be roughly $3,600 per Alaskan. But it’s unlikely to materialize.

Dunleavy’s budget release sets the stage for months of debate in his final legislative session as governor. And lawmakers are already signaling concerns: the plan relies on drawing more than $1.5 billion from the state’s primary rainy-day fund, the Constitutional Budget Reserve — about half of Alaska’s remaining savings, and a deficit nearly identical to what the governor proposed last year.

This year, though, Dunleavy himself says the state’s persistent budget gap is untenable.

“Drawing down our savings is not a sustainable plan, nor is using your PFD year after year a sustainable plan,” he read in his video.

Since oil prices collapsed in the mid-2010s, Alaska has struggled to make ends meet. That’s despite efforts to slash government spending and the 2018 decision to use Permanent Fund earnings to fund state programs, like state troopers, jails and public schools.

Dunleavy says he’ll introduce his latest attempt at a plan to stabilize the state’s finances sometime next month. A required 10-year plan released alongside the budget includes about $1.6 billion in unspecified “New Revenue Measures” starting in mid-2027. His office declined to say what those would be, and also declined a request to interview the governor.

Sitka Sen. Bert Stedman, a Republican who co-chairs the powerful Senate Finance Committee, said he was skeptical Dunleavy could push through a fiscal plan in his last year in office.

“Quite frankly, he’s out of time,” Stedman said.

He said lawmakers tried to reduce the state’s budget deficit during this year’s session — but Dunleavy said no.

“We tried to take a couple of small steps to deal with some revenue enhancements or taxes, and then hold back the spending, and he vetoed the revenue measure,” Stedman said.

And Stedman said there’s not much left to cut when it comes to state services. So he’s skeptical Dunleavy will be able to push through a resolution to the decade-long issue during his final year in office.

Plus, he said the governor’s decision to again propose spending half the state’s savings on large Permanent Fund dividends is unwise with oil prices stubbornly low.

“If we would have followed his plan, after this year, we’d be completely broke,” Stedman said. “So it’s not acceptable, and we’re going to have to work through our process. And like I said, we need to veto that $1.5 billion dollar deficit.”

Stedman said he’d like to see a balanced budget, not a draw from savings. He said he does not want to see a Permanent Fund dividend smaller than this year’s $1,000 payout — but low oil prices will make that difficult to achieve.

“We’ve got to make payroll,” he said.

Rep. Andy Josephson, D-Anchorage, who co-chairs the House Finance Committee, isn’t quite as put off by the drawdown — but he said he wouldn’t use it to pay a large dividend.

“That isn’t how I would spend half of the CBR, right, for example, but I might still spend half the CBR,” he said.

He said he sees lots of needs around the state.

“The Municipality of Anchorage’s school district needs $75 million to maintain the status quo in funding of K through 12,” he said. “That’s where I would spend the money. That’s example one.”

Dunleavy’s proposed budget fully funds the state’s education funding formula, which lawmakers increased by $700 last year despite a veto from Dunleavy.

Josephson said he’d also like to see the state invest in capital projects and beef up things like the Division of Public Assistance.

Like Stedman, Josephson said he’s viewing the governor’s forthcoming fiscal plan with a skeptical eye.

“He told me and others, two years ago, he was filing a sales tax bill,” Josephson said. “He never did.”

Lawmakers return to the Capitol Jan. 20.

WASHINGTON — Both of Alaska’s U.S senators crossed the aisle Thursday to vote to advance a Democratic bill that would’ve extended health insurance subsidies for three years.

The Alaskans and two other senators were the only Republicans to back the plan, which failed to get the 60 votes needed.

Sen. Lisa Murkowski’s vote was not a surprise. She’s known for often voting with Democrats, and she’s been saying for months that Congress needs to extend Affordable Care Act enhanced subsidies beyond the year-end expiration date, to avoid a massive price hike for Alaskans who buy their own insurance plans.

Sen. Dan Sullivan, on the other hand, rarely bucks GOP leadership or President Trump. He has said in recent months that he’s working on a plan for “extending and reforming” the enhanced subsidies. But Sullivan has voted repeatedly against extensions and, over the course of his Senate career, argued strenuously that “Obamacare” should be repealed entirely.

Sullivan did not respond to an interview request, but his office issued a statement in which he castigates “Obamacare” as unaffordable and portrays the enhanced tax credits as partisan, Democratic slapdashery.

“Nevertheless, there is little doubt that a lot of hard-working Alaskans, families, entrepreneurs and small business owners will be negatively impacted if these enhanced premium tax credits expire,” Sullivan’s statement says, adding that he’ll continue to try to forge a compromise.

Alaskans already face some of the highest insurance premiums in the country, and Sullivan is up for re-election next year.

“He’s feeling the heat,” said Alaska Democratic Party Chair Eric Croft.

Nationally and in Alaska, the Democratic Party has been hitting Sullivan hard on this point.

“Over 24,000 Alaskans will see their health care premiums skyrocket next year if Dan Sullivan does not stand with working families and vote to extend these lifesaving credits,” the Democratic National Committee said in one recent media blitz.

Croft said that Alaskans shouldn’t mistake Sullivan’s vote for a true change of position.

“He’s voted, I think, seven times in the last two months against it, and now, when he knows it’s going to fail, votes for it. Are you kidding me?” Croft said.

A Republican plan to substitute Health Savings Accounts for the expiring tax credits also failed to advance Thursday, despite the votes of both Alaska senators.

Murkowski took to the Senate floor after the votes and declared that the Senate failed.

“We failed to work together. We failed to reach consensus,” she said. “We failed to help all those who are facing these shockingly, completely unaffordable increases in their health care premiums as they’re looking at the new year.”

She says there’s still time to pass an extension before open enrollment for insurance plans closes on Jan. 15.

In Alaska, about 24,000 people buy subsidized insurance plans and those who earn as much as $78,000 can qualify for the enhanced tax credits. If the subsidy expires, which they are set to do at the end of this year, Alaskans will be among the hardest hit. A 60-year-old with a silver-level plan would see a 295% increase in premiums, according to independent health policy research group KFF.

Gov. Mike Dunleavy says he will roll out a new plan to stabilize Alaska’s tumultuous state finances in the coming weeks ahead of next month’s legislative session. The upcoming session provides Dunleavy his last chance to address an issue that has vexed his seven years in office.

“(The) next three, four, five years are going to be tough,” Dunleavy told reporters Tuesday ahead of his annual holiday open house. “We’re going to have to make some tough decisions, and that’s why we will roll out, in a fiscal plan, solutions for the next five years.”

The state’s fiscal issues are structural. Since oil prices collapsed in the mid-2010s, Alaska has spent more money than it has taken in despite years of aggressive cost-cutting and a 2018 move to tap Permanent Fund earnings to fund state services.

Dunleavy said a boom in oil and gas drilling and growing interest in a natural gas pipeline from the North Slope to an export terminal will likely ease the fiscal pressure in the coming years. He said his plan would serve as a bridge.

“I think the next five years, we’re going to have to be real careful, and we’re going to have to have in place things that will pay for government,” he said.

Dunleavy, a Republican, declined to reveal even the broad strokes of his plan, saying he plans to hold news conferences in the coming weeks to discuss it.

Prior efforts by Dunleavy and the Legislature to come to an agreement on a long-term fiscal plan have failed.

Dunleavy’s early plans for deep cuts led to an effort to recall him. He has also backed attempts to cap state spending and constitutionalize the Permanent Fund dividend.

A prior Dunleavy revenue commissioner floated a few tax proposals during talks with a legislative committee in 2021, but Dunleavy has since distanced himself from those ideas. Alaska is one of two states with no state-level sales or income tax, and asked directly whether his plan would include a sales tax, he declined to say.

“You’re just going to have to just wait a couple more weeks, and we’ll have that entire fiscal plan laid out, so you guys can take a look at it, and the people of Alaska can take a look at it,” he said.

In recent years, Dunleavy has proposed budgets with large deficits that require spending from savings. His most recent budget would have drained about half of the savings in the state’s $3 billion rainy-day fund, the Constitutional Budget Reserve, or CBR.

Still, Dunleavy says he wants to find a sustainable fiscal path forward for the state.

“We are determined to help solve this longstanding issue of, how do you deal with balancing the budget, and not just on the backs of the PFD or the CBR — what other methods are we going to employ to be able to do that?” he said.

Whether lawmakers will be receptive is an open question. Democrat-heavy bipartisan coalitions control both the state House and Senate, and even some minority Republicans crossed over to override Dunleavy’s vetoes repeatedly this year.

Dunleavy’s budget proposal is likely to offer some clues about the governor’s fiscal plan. He has until Dec. 15 to unveil it.

Correction: An earlier version of this story misstated that Alaska was the only state with no state-level income or sales tax. In fact, as of 2025, it is one of two. New Hampshire recently did away with its interest and dividends tax, a type of income tax.

In a Friday hearing, members of the Alaska Senate spoke critically about a proposed new ferry terminal in Juneau, questioning why the project would be worth its multimillion-dollar cost.

Earlier this year, state legislators planned to divert $62 million from a variety of transportation projects in order to pay for the state share of federal transportation grants worth between $500 million and $600 million.

Lawmakers included the diversion in their budget for the year, but Dunleavy vetoed the maneuver, saying that the “funding is either still obligated in the original project or has been fully expended and is unavailable for reappropriation.”

That left legislators’ spending plan partially unfunded.

One of lawmakers’ biggest targets this past spring was DOT’s plan to build a new ferry terminal in Juneau, roughly 30 miles north of the existing terminal in Auke Bay, at a place called Cascade Point, which would shorten ferry runs to Haines and Skagway.

Legislators sought to divert $37 million from an account intended to fund that new terminal, but Dunleavy vetoed the transfer and the Department of Transportation subsequently signed a $28.5 million contract for work on the terminal.

In October, the state’s ferry advisory board concluded that the project likely did not make economic sense.

“Do you agree with that study?” asked Sen. Jesse Bjorkman, R-Nikiski, during Friday’s hearing of the Senate Transportation Committee.

“Can you please make the case to the Alaska people why you think investing this money … in the Cascade Point project makes fiscal sense for Alaskans?”

Ryan Anderson, commissioner of the Alaska Department of Transportation and Public Facilities, responded that “as a public agency, we’re more than economics. In this case, there’s this idea of saving people time with a much shorter run, saving money, the cost of operating that ship, we’re saving fuel. It’s less carbon emissions. I mean, there’s a lot of good benefits to shorter ferry runs.”

Lawmakers didn’t have the votes to override the governor’s vetoes, which means that when they reconvene in January, they’ll have to come up with a new way to fund construction work this summer.

According to documents presented to the committee on Friday, the Alaska Department of Transportation has “deferred” about 25 projects 1-3 years “to remain within available match.”

Without new money, “fewer projects will move to contract award, limiting construction activity.”

Anderson told the transportation committee that his agency is prioritizing “shovel ready” projects, those that are about to go to construction.

“As we go and prioritize projects through this year, we’ll continue that action, and we’ll be ready. That’s really how we’re looking at this program,” he said.

WASHINGTON — The federal government’s official name for North America’s tallest peak is Mount McKinley.

President Trump reinstated the moniker on Day 1 of his second term with an executive order entitled “Restoring Names that Honor American Greatness.”

But Sen. Lisa Murkowski is trying to re-restore a much older name.

“We have called it, this mountain, Denali in Alaska for decades, generations,” she said at a Senate hearing Tuesday. “The Koyukon Athabascan have called it, referred to it, as Denali for millennia.”

Murkowski has sponsored a bill that would nullify Trump’s name change, and change the official name back to Denali, which is often translated as “The Great One.” Alaskans feel strongly about it, she said.

“This is about respecting the original stewards of the land who gave this fitting name,” she said.

President William McKinley has no particular connection to Alaska and never visited, Murkowski noted.

A prospector named the mountain for him, and the government adopted it officially in 1901. The appellation stuck for the rest of the 20th century, despite a petition from the state of Alaska in the 1970s in favor of Denali. Murkowski and the rest of the Alaska delegation to Congress sponsored Denali bills year after year but the delegation from McKinley’s home state —Ohio — blocked them. President Obama finally stepped in and ordered the name changed in 2015. That held for a decade, until Trump changed it back.

Murkowski said her Denali bill is not meant to diminish President McKinley or his contributions to the country. And, she said, he won’t go un-honored.

“You’ve got the McKinley national memorial, the National McKinley Birthplace Memorial, the McKinley Presidential Library Museum,” she said. “You’ve got statues in Ohio, Hawaii, Illinois, among others. So this is nothing against our former president.”

An Interior Department witness at the hearing said the administration opposes the name restoration because it conflicts with Trump’s executive order on the mountain’s name.

Sen. Dan Sullivan co-sponsored Murkowski’s bill, as did three Democratic senators. Its prospects are uncertain. It could be negotiated into a package of bills containing the home-state priorities of other senators. Or it could be added to must-pass legislation. But if Trump insists on keeping the name McKinley, it’s not clear a sufficient number of Republicans in Congress would cross him.

The state of Alaska has settled lawsuits against Juul and Altria, two nicotine vapor manufacturers, for a combined $7.8 million, the state Department of Law said on Friday.

The suits were part of a nationwide pattern: Alaska and other U.S. states had alleged that the companies deliberately targeted children with advertising, something that likely contributed to a surge in nicotine use among children and young adults.

Altria settled Alaska’s lawsuit for $2 million last year, and the state announced a $5.8 million consent judgment with Juul on Friday.

Under the settlements, neither Juul nor Altria must admit fault, but both must abide by marketing restrictions. One key point in the settlement: Juul can’t use cartoons to advertise its products.

“This case took five years and a great deal of work from our public health and consumer protection teams, but it was worth it,” said Alaska Attorney General Stephen Cox, in a prepared statement.

“We now have strong court-enforceable limits on how these companies can operate in Alaska, and we’ve obtained a per-capita recovery that ranks near the top nationally, with those dollars going straight into prevention and consumer protection.”

Alaska was one of the last states in the country to settle with Juul, which has already paid more than $1 billion to states across the country.

Some states have since filed additional lawsuits against vape distributors, alleging that they contributed to a surge in nicotine vapor use among children and young adults.

Money from Alaska’s Juul settlement is to be paid over the next five years.

Under the financial terms of the consent judgment, half of the proceeds would be used to fund tobacco control and prevention programs, and the other half would go to the Department of Law’s consumer protection program.

Typically, the spending of money earned in financial judgments must be approved by the Alaska Legislature before becoming official.

“The use of vapes and other nicotine products among youth in Alaska remains a concern,” said Alaska Department of Health Commissioner Heidi Hedberg in a prepared statement. “This funding will help families and communities continue to access education, prevention, and cessation programs.”