House Finance moves state operating budget to floor, but it has one little problem

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Rep. Andy Josephson, chairing House Finance Committee on April 3, 2025.

The Alaska House Finance Committee advanced a proposed state operating budget for the next fiscal year, which begins July 1. It contains $14 billion and includes a full statutory Permanent Fund dividend, estimated at around $3,800 per eligible Alaskan.

The full PFD was an apparent mistake that Democrat Rep. Andy Josephson of Anchorage made when he proposed the budget. He is not one to promote a full PFD, but it was an oversight he made as chair of House Finance. He was then stuck with it, as , rural Democrats on the Finance Committee were too fearful of their reelection chances to take it out. The Democrat majority, with rural Reps. Neal Foster and Nellie Jimmie showing reluctance to take money from their constituents, just didn’t have the votes to reduce the dividend.

Thus, the budget is nearly $2 billion in the hole, with no apparent easy way to fund it.

The proposal has been sent to the House floor for a vote, where skepticism remains about being passed in its current state. The House is supposed to pass a funded budget, but Josephson’s budget has no funding.

Josephson admitted in a Finance Committee meeting that he had had secret talks with the Senate, so he may have something up his sleeve.

To fund the deficit, there is still the Constitutional Budget Reserve, which has about $2.8 billion in it. But that requires a three-quarters vote of both House and Senate to tap into.

The CBR was established by voters in 1990 as an article of the Alaska Constitution. Its stated purpose is to serve as a savings account to help stabilize the state’s finances by providing a reserve of funds to cover budget deficits during times of low revenue, particularly when oil prices or production decline. The CBR is meant to store excess revenue from certain one-time sources, such as settlements or legal judgments related to mineral revenues (primarily oil), and to protect the state against fiscal volatility due to its heavy reliance on resource-based income.

The state government has used the CBR to balance its budget for 10 years in a row, starting around fiscal year 2015.

Meanwhile, the supplemental budget to pay for items in this fiscal year passed the House on Thursday, also unfunded. On a vote of 21-19, the House Democrats may be thinking there will be enough money in the CBR to also pay for this year’s supplemental needs. But there’s not enough in the CBR for the supplemental and next year’s deficit.

The end-game is upon the Legislature, which has a final date of April 20. Negotiations will continue and those who frequent the Capitol are predicting that a special session will be called, which could extend the power plays until May 21. The new fiscal year begins July 1.

30 COMMENTS

  1. The “little problem”? No money for their grand dreams.

    So what’s the solution? Taxes or higher taxes?

    • Yes, state sales tax, state income tax but 86,000 jobs are taken by nonresidents. How nice! Annnnd the Geissel coalition wants a pension plan for 24,000 state employees. These people are effing crazy!

  2. The legislator are idiots! Only they can get away with spending more money then the state has. The are bankrupting our state!

  3. Edgmon and Josephson should of listened to Senator Hoffman in the first week of February. Hoffman is quoted as saying “we haven’t addressed revenue for decades”. He goes on to say “I think it’s high time for the legislature to look at raising new revenues. If we want to accomplish the many things we want to do, If not, I don’t see a clear path forward to balancing not only this year’s budget, but next year’s budget”.

    That in it’s self should have set the boundaries for House Finance. Unfortunately it’s been rumored that Finance Chair Josephson, banned any questions on where any of the outlandishly over priced Bills would receive funding from… (HINT: $2.5 BILLION, YOUR PFD).. so with the CBR off the table, according to Senate Finance.. and no new financing available.. I’d go out on a limb and say , there will be no bigger incompetents in leadership than Edgmon and Josephson this session.

  4. > Thus, the budget is nearly $2 billion in the hole, with no apparent easy way to fund it.

    There are many ways to cut the budget. There is much much waste and union goodies. Cut it all.

    Full PFD.

  5. The elephant in the room, just mentioned a little bit, is that accessing the CBR requires a super majority vote. The minority in the House ain’t gonna go for that without major concessions.

  6. Love it!!! This should stand, it’s what the PFD should be. Our legislators have been stealing from the people now for a long time. When you steal from people, nothing ever turns out very good after that, it always comes back to bite you.

    • Frank, I may disagree with you most of the time, but this I whole heartedly agree with. It’s a clown show with a high ticket price.

  7. The facts prove this majority is incompetent, unethical and lacking common sense. They’re goal was special democrat projects and to drain the piggy bank. Look like the Alaskan voters are going to get to see a tax soon. Voting democrat has consequences.

  8. This is absolutely sickening. We don’t run our businesses or households this way!! Why is it being permitted
    to happen in our legislature? It’s because the people of ALASKA can’t get to the capitol to meet these people face to face! I am gonna DEMAND our CAPITOL be moved to the road system ASAP! Then they may be more inclined to do their jobs with ethics, morals & values. Un freaken believable!!!!

      • It’s been a long time concept for the capital to be near Willow which is half way between Anchorage and Fairbanks.
        Personally, I don’t want the extra crime in this area.

      • Fairbanks!
        It has hotels and LIO, is on the road system, a relatively short flight from anywhere (other than SE, but we have been putting up with taking all day to get to Juneau for forever) and they could rent the Pioneer Park (I think it used to be called Alaska land) venue for the session.

        On another note everyone should email/call their legislator and thank them for putting a statutory PFD in the budget! If so inclined you could also make suggestions on where to cut (the university system comes to my mind).

    • It’s being permitted to happen because these people keep getting elected. There are few statesman and most, especially the left, are there for power and control. Our elections are a mess, voter turnout is abysmal, and many of the candidates are not honest people and portray themselves other than who they are until they are in office.

    • Let us pray our current governor puts his red pen to work and balances the budget properly.

      Were it me, I would use an axe.

  9. Okay, ELECTED LEGISLATORS! You are on notice! The current federal administration has released the reins on developing our natural resources that will put our state back in the drivers seat of enough and more than enough REVENUE! Oh yes! But all we hear from the NO-BACKBONE whiney, crying liberals, wannabe conservatives in name only, Rino’s…woe is us. We are poor. We don’t know how to legislate. We have no clue what a budget is or how to balance one; and we don’t care either. Wha, wha, wha! And we want to tax our state citizens more and more. Oh we have no money $$$…but we want to fund education like there’s no tomorrow…mm, is that where $$ is laundered? I wonder.

  10. The House knows full well that they can not pass a supplemental or budget without funding. So this is a deliberate maneuver to fool the people of AK. I suspect the game is to pass it to the Senate and then the Senate will strip out the PFD and claim there just isn’t enough money to pay for AK’s needs and it is time to end the PFD.

  11. Things like this happen when you put a lawyer in charge of financial matters, it only gets worse from there when they are a far left politician and lawyer.

  12. Republican majority in both houses, but these clowns let Ds run things.

    This is the result.

    The legislature funds so much garbage then want to pay for it by stealing our PFD.

    I’m old enough to remember when messing with the PFD was a political death sentence.

  13. Make the payment of the statutory PFD mandatory. What is left in the Permanent Fund Earning is available for the legislature to spend. If they need more, they will have to tax us for it and pay the consequences at the ballot box.
    As it is they don’t really make any hard choices until they spend the PFDs.

  14. Budget cuts or more taxes. That’s always the way of the politician. Never look at reforming the entire budget process because as Sarah Vance once told me “That ship is too big to change course”. Laziness and lack of political will will eventually bankrupt this grand State. Try running your business or household budget the way the government does it. You won’t last long. Yet our “representatives” blow us off at every opportunity. Why? Because they’re so much smarter than We the great unwashed masses? Not looking like that’s it.

  15. Pish! Sick of watching morally and financially illiterate political plump their own pockets puppets crapping on EVERYTHING that made our state great.

    If the trend is to remain allowing “representatives” who either are incapable of, or simply refuse to grasp the even the barest basics of fiscal responsibility, well, then I think it is time sue the State for failing to preserve and protect the dividend program for all state residents.

    I will not allow my dividends to be siphened away without pottuing up an UGLY fight any longer.

    Give us all back our mineral rights that was took from us in “exchange” for a dividend fund designed and lawfully created to be a FOREVER masterfully managed asset that would continue to grow and grow to the benefit of every individual resident for their residency term, as well as for the residency term of countless generations to come. (Rest in Peace Jay
    Hammond, you were a true forward thinking lawmaker. These past 20 odd years of jackels in Juneau aren’t my grandparents, parents, nor my kind of legislators. 😡)

    So basically all elected “representatives” my message here is this: Get your grubby paws off OUR dividend fund or give US, the people back what you took, now most obviously illegitimately.

    Anything less is a mandate that you kindly resign and go pound sand.

    Make Alaska D’enali (the Great One) once again 🔥

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