Alaska Senate passes $13.9B operating budget with $200 energy relief

The Alaska Senate passed a $13.9 billion operating budget Wednesday that includes a $200 per-person energy relief payment and maintains a surplus.

The budget passed 17-3. A conference committee organized in one day and reached consensus in a second meeting in under an hour. The spending plan appropriates just over $5 billion in unrestricted general funds to agency operations, $601 million to statewide items, and $674 million to the dividend. That totals $6.27 billion in unrestricted general funds for fiscal year 2027. The budget balances at $75 per barrel oil with $44 million left for supplemental spending next year.

The energy relief dividend increased from $150 to $200 per person. That raised the cost from $96 million to $127.3 million. The payment will be added to the $1,000 Permanent Fund Dividend base.

Senator Lyman Hoffman said the budget presents fiscal discipline and addresses energy relief for people of Alaska. He said approving the budget does not require a constitutional budget reserve vote to fill a deficit because there is no fiscal year 2027 deficit to fill.

After passing the operating budget, the Senate voted 17-3 to adopt the Constitutional Budget Reserve section of the bill.

Major additions to the budget include $11 million to restart the Alaska Heating Assistance Program, $6.4 million for child care recruitment and retention, and $4.275 million for Medicaid rate increases. The budget also allocates $2.79 million for regional and community jails and $1.75 million for the Head Start program.

School districts will receive $29.1 million in grants to help offset high fuel costs. The grants are calculated by taking each district's highest energy cost over the past three years and adding 30 percent to that amount.

Communities will receive a base payment of $20 million to help with high costs of fuel and shipping. The budget also doubles the community assistance fund to $30 million for fiscal year 2027.

The University of Alaska system received funding for campus safety and mental health support across its three main campuses. The Anchorage campus will receive $307,000 for public safety and $340,000 for mental health support.

The Senate also passed the mental health budget 20-0. That budget includes $3.5 million for behavioral health treatment and recovery grants, $500,000 for a crisis call center, and $723,000 for behavioral health prevention grants.

The operating budget now returns to the House for final consideration.