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.
Yet another fantasy projection by the MaskedDude.
Get a grip on reality.
Or maybe get a job.
That might ground your free association dribble in reality.
Must be why the907 initiative creeps keep advertising against AIDEA, they want to poach the $$$$$ for more leftism promotion
AIDEA is the Alaskan deep state
What do you know about AIDEA? Obviously nothing.
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.
George: You’re on to AIDEA.
It’s mostly been a financial horror story for decades.
It doesn’t help that it is run by political hacks.
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?
The Union Uni-Party doesn’t care. Their Mission is to Spend Alaska into DETROIT. They Spend and Spend and Spend till the Private Sector has to leave or go broke. They don’t care. Just like Education—- Spend the most with worse results. Spend the most for Union Pensions so the Private Sector Disintegrates. Compare Anchorage 50 years ago to today. LIBERAL—COMMIE Assembly Members have Destroyed Anchorage, State Union Liberal Commie Legislators are doing the same thing. It’s time to take off the gloves and call these people who they are Leninists Union Communist’s. Look at how Cathy Geisel morphed over the years, or Dave Wilson in the Valley, or Kelly Merrick in Eagle River. It’s like watching World War Z in real life.
Don’t forget the major FRAUD – Yundt!
As long as we have RCV, ‘cheat by mail’ and lazy non-voters, these people will stay in office. We are run by a communist cabal.
AIDEA has many massive failures in its history. Economists who have looked at AIDEA have concluded that the organization has not lived up to expectations. So AIDEA wasted hundreds of thousands of dollars to prove the independent economists wrong. But AIDEA refuses to release the report- that we paid for.
Among the AIDEA boondoggles, the failed Healy coal plant, that wasted over half a billion dollars, and the Interior Energy Project that has wasted well over $100 million, but has made key people rich. This project has not delivered on a single one of its promises.
Long story short, the Legislature has the authority under the Alaska Constitution to appropriate money, even if statutes that it passed get in the way. Note the $10 billion taken from Alaskans in the form of lower dividends because we give our oil away. The courts have ruled the legislature has the authority.
Yup.
AIDEA has failed in virtually all of it’s endeavors.
Does anyone really think a bunch of government hacks can make better business decisions than entrepreneurs and business people in the private sector?
LIST OF FAILURES – where should I begin.
Mustang Oil – $94,000,000.00 – FAILURE
Healy Coal – $150,000,000.00 – FAILURE
Seward Coal Terminal – sold to Ak Railroad – FAILURE
Anchorage Fish Processing – $23,500,000.00 – FAILURE
Loan Participation Program for “disadvantaged” businesses – $357,000,000.00 – FAILURE
West Susitna Access Road – $397,000,000.00 – FAILURE
Skagway Coal Terminal – $39,000,000.00 – FAILURE
I’ll stop there – what’s that about 1 billion $’s in EPIC FAILURE.
I could go on – but I won’t.
The AIDEA is EVERYTHING that is wrong with Alaska State Government – why would anyone promote this borderline criminal enterprise – seriously.
Done with it…
Skagway Coal Terminal?
Kindly elaborate. I am unaware of any coal mines operating in Northern Southeast or the Yukon Territory.
Kindly cite your sources.
He means “ore terminal.” – sd
Ore.
Where’s the concern for the wasted BILLION $’s?
We need a DOGE on where that money went – a full accounting.
Many of the people that were involved in these nefarious business, I mean crime dealings are still at AIDEA and in other positions of state government and in the private sector.
THIS IS THE GOOD ‘OL BOY SYSTEM.
Truly criminal.
Ore, not Oar, or?
I knew that was what you were meant but its always good to get a clarification! Regarding Oar… maybe the greenies could propose an Oarsmen powered Crew type tug to berth the mega cruise ships when landing in Skagway! I men ECO Tourism is all the rage isn’t it?
Ha,Ha!
“ It also provides financing for commercial ventures, including recent hotel revitalization projects in Anchorage.”
I was waiting to see a line such as the above in print. Do those hotels in Anchorage need “revitalization” because they were used for housing those living in the streets? If I was a hotel owner and the Homeless Industrial 503-c Complex asked to rent rooms for “homeless” people, I’d require a “remodel” or a “revitalization” be part of the contract; especially if my name was Begich, Halcro, or Berkowitz. 🤔
Yes. Follow \the money on any of these hotel scams.
Amen to that!
AIDEA owns a shipyard they need to maintain. They want to pay for repairs from Federal grants.
There seems to be no limits on how stupid the white, liberal decolonizers are. Pretty soon we Natives will be back to using spears and stones to hunt our food. Please send these mixed-up race baiters back to California.
It is time to ignore lawlessness! That starts with the legislature
This legislature continually gets more dangerous to a free and prosperous Alaska.
The state raided the public pension system with buyouts and the retire rehire program. And created a massive unfunded liability for the taxpayers. Legislators and aides are now full time employees and retired public employees get inflation proofing and medical benefits that keep up with raising medical costs. With this history why not raid AIDEA.
Aidea is a hole in the ground to throw money into and should be eliminated. I am NOT supporting the idiocy in the legislature that spends every nickel they can steal. AIEDA is just a load on our state budget.
Question for the Assembled Masses: Once they started diddling the PFD, led by Bill Walker and ensconced into law in 2018 by democrats an RINOs in that year’s version of a “bipartisan majority” what makes you think that everything else isn’t on the table?
Happily, the “bipartisan majority” has reduced politics in this state to its most basic: Anytime liberals hold a majority of any size, they will offer up and pass everything else on their agenda. And they will Mau Mau squish Republicans in the minority to override any gubernatorial veto. Enough of them will fold like the proverbial cheap suits to make the beatings stop. God help us if they manage to elect a governor, as we will end up like Colorado in very short order.
Bad news? Absolutely. But it does make the path ahead remarkably clear. Cheers –
Yes. Sometimes ‘Exodus’ with a free and clear heart would the seem the appropriate path. I’ve been here my entire 65 years, but this BS is driving me to find other digs.
AIDEA has cost Alaskans a significant amount of money over the years, estimated at $10 billion. This figure is based on the idea that if AIDEA’s investments had been managed more wisely, the state would have been richer by that amount. Specifically, if the $301 million appropriated to AIDEA had been invested in the Permanent Fund, the state would be more than $10 billion richer.