The Alaska Legislature adjourned Tuesday after passing a combined operating and capital budget totaling $6.2 billion in Undesignated General Fund spending — slightly down from $6.454 billion last fiscal year. When federal funds are included, the total budget swells to nearly $16.3 billion.
But buried in the spreadsheets is a problem: a $180 million hole that lawmakers directed Gov. Mike Dunleavy to fill using funds outside the traditional source.
Rather than tapping the Constitutional Budget Reserve, as has been customary in past years, the Legislature instructed the governor to plug the shortfall using money from the Higher Education Investment Fund, which supports the Alaska Performance Scholarship, and by stripping funds from the Alaska Industrial Development and Export Authority.
This maneuver raises both legal and fiscal red flags.
AIDEA is a public corporation established by the Alaska Legislature in 1967 with a mandate to promote economic growth and diversification. Its mission is to stimulate job creation and resource development by providing financing and investment for businesses and infrastructure projects across Alaska.
In practice, AIDEA operates somewhat like a development bank. It offers loan participation programs, conduit bonds, loan guarantees, and direct project financing, with a focus on sectors such as energy, manufacturing, and small business. The authority works with financial institutions and development agencies to back projects that align with the state’s long-term interests.
Crucially, AIDEA is governed by an independent board — much like the Alaska Permanent Fund Corporation — and is structured to operate independently from the Legislature’s annual budget process, so it doesn’t become politicized.
But this year, lawmakers decided to reach directly into its coffers.
This decision raises constitutional concerns, particularly in relation to the confinement clause of the Alaska Constitution, which requires that appropriations serve a single, defined purpose. Diverting AIDEA’s dedicated development funds to fill a general budget gap may violate this clause, since the money was never intended to serve as backfill for deficits.
There’s also a strong case to be made that raiding AIDEA’s reserves violates statutory protections that ensure the authority operates outside the highly politicized state budget process. If these protections are ignored, it could establish a dangerous precedent for Alaska’s other independent public corporations, such as the Alaska Permanent Fund.
AIDEA currently has about $500 million in cash reserves. Stripping those funds to cover a one-time deficit not only undermines its mission, but also weakens the agency’s financial health. Bond rating agencies closely monitor liquidity levels when evaluating an entity’s creditworthiness. Reduced reserves could lead to downgraded ratings, increased borrowing costs, and diminished capacity for future development financing.
AIDEA has played a central role in some of Alaska’s most impactful development projects. The authority helped finance the DeLong Mountain Transportation System, including a 52-mile haul road and port facility critical for exporting minerals from the Red Dog Mine, one of the world’s largest zinc producers.
Today, AIDEA continues to back major projects like the West Susitna Access Road and the Ambler Access Project, both of which aim to unlock long-term economic opportunity in remote and rural areas. It also provides financing for commercial ventures, including recent hotel revitalization projects in Anchorage.
If the governor agrees to the Legislature’s plan, it may set in motion a broader dismantling of AIDEA, a move that aligns with the long-standing wishes of some Democratic lawmakers who oppose the agency’s development-oriented mission.
In the short term, lawmakers may have plugged a budget gap. But in doing so, they may have cracked the foundation of one of Alaska’s most important economic tools.
They probably violated a dozen or so laws and ethical boundaries. But they don’t care.
Why?
They know two vital things.
1-Our broken judiciary won’t punish them
2-90+% of them will be re elected no matter what they do.
Welcome to the Union of Soviet Alaska, comrades.
AIDEA is the Alaskan deep state
Funny how a minute ago “protecting education” was paramount.
Then they needed education money to service the Politburo.
As the country goes red, AK goes blue. Unbelievable. Criminals one and all.
I can’t remember all the things AIDEA has done, but isn’t there a long list of failed developments they financed?
So consequently, a lot of AK money was wasted by them.
Of course, at this point, the prog/dem/libs would be totally against AIDEA if they are buildings ROADS! in Alaska, an environmental/ cultural sin in their world.
Reduce roadblocks to small business. Fees and licenses need to be redone. Its a joke and it’s reach is overblown. Government with pots of money, any wonder it’s abused?