Day: May 18, 2026

Alaska lawmakers are planning to vote on a $13.9 billion compromise state operating budget that includes a $1,000 Permanent Fund dividend and a $200 energy rebate.

In a 4-2 vote Sunday morning, a panel of House and Senate negotiators finalized a deal that combines two different versions of the budget — one passed by the Senate and the other by the House — preparing legislators for a final vote before the last regular day of the legislative session on Wednesday.

Once passed by the Legislature, the budget will go to Gov. Mike Dunleavy, who may sign it or use his line-item veto powers to eliminate or reduce specific items. The governor has never let a budget go into law without some vetoes. 

With legislators focused on a potential tax break for the proposed trans-Alaska natural gas pipeline, the state budget has taken second billing in the state Capitol this month.

Legislators convened in January with the expectation that they would be facing a massive deficit in fiscal year 2027, which starts July 1. 

The Iran war, and the subsequent closure of the Strait of Hormuz, has sent oil prices soaring, resulting in hundreds of millions of dollars in extra revenue for the state.

That eliminated the projected deficit, but lawmakers don’t expect to have much left over for the Permanent Fund dividend.

While a payment formula from the 1980s remains in state law, legislators since 2016 have adopted a “surplus dividend” approach, paying the dividend with what’s left over after services are covered.

While Dunleavy proposed a $3,800 Permanent Fund dividend in December, that would have required deep spending from the state’s savings accounts. 

Members of the House approved a draft budget with a $1,500 Permanent Fund dividend in April, and in a competing draft, the Senate reduced that to $1,000 and a $150 one-time bonus intended to offset higher energy prices.

The final compromise version of the budget closely resembles the Senate plan, but the one-time bonus was slightly increased, to $200, in an amendment proposed over the weekend.

The final version of the budget also contains $144 million in one-time bonus payments for public schools across the state, including $29 million intended to offset the high cost of heating fuel. 

The one-time bonus is less than the House proposed but higher than the Senate’s figure. 

The budget also proposes to fund a heating assistance program for Alaskans, increase Medicaid reimbursements for medical providers, send additional money to cities and boroughs, and increase funding for wildfire response.

Altogether, the budget balances if Alaska North Slope oil prices average at least $75 per barrel in FY27. The average price since March is above $100 per barrel.

The operating budget advancing to a final vote is the last of four budget bills that lawmakers approve in an ordinary year. 

The state’s supplemental budget — making changes to fiscal year 2026 — was adopted in March and signed by the governor in April. The $2.5 billion capital budget, which funds construction and renovation projects statewide, is awaiting a final vote in the Senate.

Alaska’s comprehensive mental health budget is moving in parallel to the operating budget and is expected to pass when the operating budget does.

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Less than two years after Alaskans approved a ballot measure creating a mandatory sick leave law, the Alaska House of Representatives has voted to partially repeal it.

By a 22-18 vote on Saturday, the House approved an amendment that would cancel the law’s application for seasonal workers and for workers employed by a business with nine or fewer employees. The cancellation would take effect immediately, if the bill is signed into law.

Seasonal workers are defined as those who work at a specific job for less than six months per year.

All of the House’s Republican members voted for the amendment, including Reps. Chuck Kopp, R-Anchorage, and Louise Stutes, R-Kodiak, who are members of the House’s predominantly Democratic majority caucus. Speaker of the House Bryce Edgmon, I-Dillingham, also voted for the amendment.

All of the House’s Democratic members and its remaining independents opposed the amendment.

The amendment was to House Bill 193, which would create a mandatory paid leave program for new parents, starting in 2030. That bill advanced from the House on a 36-4 vote and was scheduled for a hearing in the Senate Finance Committee on Monday afternoon.

The four opposition votes all came from Republican lawmakers in the House’s minority caucus. 

It was not immediately clear whether the bill had the necessary support to pass the Senate before the end of the legislative session on Wednesday night. 

The amendment, introduced by Rep. Julie Coulombe, R-Anchorage, was largely identical to House Bill 161, a rollback measure that failed to advance in the Capitol this year despite significant lobbying efforts from business groups.

The state’s fishing industry, tourism industry, construction industry, the state chamber of commerce and several local chambers of commerce all have advocated HB 161. 

Speaking ahead of the vote, several Republican lawmakers said they were heeding that call and voting yes on the amendment to HB 193.

“It’s actually been my number one priority since I got back here this year,” said Rep. Will Stapp, R-Fairbanks, speaking about the rollback.

Much of the desire for the rollback, Stapp explained, is because during its first year, seasonal employees saved their sick leave until the end of their term, then used it right before their departure, leaving employers short-staffed.

“That is creating a workforce crisis at the end of the season that is going to progressively get worse and worse and worse for our fishing industry, for our tourist industry, for our construction industry,” he said. 

Speaking on the floor ahead of the vote, Coulombe said she had hoped to cancel sick leave for all workers at businesses with fewer than 50 employees, but she received a legal memo indicating that doing so would be illegal because Alaska’s constitution prohibits the Legislature from repealing a ballot measure within its first two years, and such a large exemption would have covered roughly half of the state’s workers. 

Rep. Sarah Vance, R-Homer, said the sick leave law is “gutting the small businesses in my community.” 

“We need to be listening to our business community right now, that so many of them (came to us) and said, ‘We need help,’” she said.

Rep. Zack Fields, D-Anchorage, was among the lawmakers who urged the House to reject the amendment.

“I think it’s very problematic to substantially gut a ballot initiative less than two years after it was passed by voters,” he said.

Exempting seasonal workers means exempting multinational tourism and fishing businesses that operate in Alaska, he noted.

“Do we really need to exempt all the employees of massive multinational businesses like Holland America Princess?” he asked.

During the COVID-19 pandemic emergency, fish processing plants and cruise ships were hotspots of infection and disease. Outside the COVID-19 pandemic, tourism occasionally brings waves of influenza and norovirus to coastal communities.

“When we have a tourism dependent economy, it is not in our interest to push sick people to come to work when they’re serving food, when they’re doing hospitality,” Fields said.

In 2024, Rep. Genevieve Mina, D-Anchorage, was one of the key organizers behind the sick leave ballot measure. Like her Democratic colleagues, she opposed the sick leave rollback but ultimately voted for the underlying bill even though it contained the rollback.

“The bill is a great bill, and you can just see the strong bipartisan support,” she said. “This whole building is an area of trying to figure out compromises and figuring out the ways where we can do good things that are supportive for families and can really address these issues about migration that our state has been facing. It’s not over for the bill or for paid sick (leave), so we’ll just see what happens on the Senate side.”

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