In this May 18 photo, Gov. Bill Walker speaks to the media about calling a special session to deal with the budget. (Michael Penn | Juneau Empire file)

In this May 18 photo, Gov. Bill Walker speaks to the media about calling a special session to deal with the budget. (Michael Penn | Juneau Empire file)

Walker signs shutdown-averting budget

Gov. Bill Walker has signed a shutdown-averting $8.8 billion state operating budget into law.

Walker signed the budget on Friday, one day before the start of the state fiscal year and eight days after the Alaska Legislature approved the budget. He made no vetoes.

The budget uses $2.3 billion from Alaska’s Constitutional Budget Reserve to close a multibillion-dollar annual deficit, and it cuts the Alaska Permanent Fund Dividend to $1,100. It does nothing to alleviate the budget crisis caused by fallen oil prices.

“I thank members of the Legislature for coming together to avert a shutdown of government services,” Walker said in a prepared statement. “However, the job is not complete. Without a complete fiscal plan in place, uncertainty looms over our economy. It’s time to fix this problem for good to ensure a stable foundation for generations to come. A compromise fiscal plan can be achieved in the coming weeks — if the Legislature is willing to engage.”

Thus far, the Legislature appears unwilling.

After lawmakers approved the budget one day after the summer solstice, they largely departed Juneau even though a special legislative session called by Walker will continue through July 15.

Last week, members of the Alaska Senate’s 13-member majority said they will return to Juneau on July 10 in an attempt to fulfill the sole item on the special session agenda: reforms to the state subsidy of oil and gas drilling.

Lawmakers agree that the state needs to replace its system of cashable tax credits with something else. Where the Senate Majority and the coalition House Majority differ is whether the subsidy should be reduced as well as reformed. The Senate Majority favors a system of tax writeoffs that would save the state little money when compared to the current system. The House Majority favors a more complicated system that would save the state hundreds of millions of dollars.

The Senate Majority argues that the House proposal could deter companies from drilling in Alaska, thus costing Alaskan jobs. The House Majority argues that the Senate proposal does nothing to alleviate Alaska’s annual deficit.

With the passage of this year’s budget, that deficit becomes even more critical. By this time next year, the Constitutional Budget Reserve will no longer contain enough money to fill the deficit, barring a rise in state revenue or substantial budget cuts.

This year’s budget is funded with $2.2 billion in federal money, $4.9 billion in “undesignated general funds” and $1.6 billion in other funds (typically fees and license revenue).

It’s the undesignated funds, earned through oil revenue and non-targeted taxes, that are most eyed by lawmakers.

According to the Alaska Office of Management and Budget, the state has cut $1.3 billion in undesignated general fund spending between July 1, 2014 and July 1, 2017.

At the same time, the state has raised more money in fees and what are known as “designated” general funds.

The state’s operating budget has declined $790 million since July 1, 2014 when all three categories are combined.

Spending on the Permanent Fund Dividend has also fallen. The Legislature agreed upon a $1,100 dividend, almost $800 less than the 2014 figure. That will save the state an additional $582 million but cost individual Alaskans more than $1,000 each.

Later this year, lawmakers must also consider a capital construction budget that is part of the state’s annual routine. In exchange for about $100 million in state dollars, Alaska will become eligible for more than $1 billion in federal funds earmarked for highways, bridges and other infrastructure.

If cuts to the capital construction budget are considered alongside the operating budget, the Legislature will have slashed state spending by more than 43 percent since 2013.


• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.


More in News

The Norwegian Bliss arrives in Juneau on Monday, April 14, 2025. (Jasz Garrett / Juneau Empire file photo)
Ships in port for the week of June 8

This information comes from the Cruise Line Agencies of Alaska’s 2025 schedule.… Continue reading

Volunteers look for trash on the Jordan Avenue sidewalk at JAMHI’s Community Litter Pickup event on Saturday, June 14, 2025. (Ellie Ruel / Juneau Empire)
JAMHI hosts community cleanup to kick off 40th anniversary celebration

Local addiction and mental health treatment organization plans summer of events and give-back days.

Then-Rep. Grier Hopkins, D-Fairbanks, speaks on the floor of the Alaska House, Wednesday, May 18, 2022. Hopkins is now the mayor of the Fairbanks North Star Borough. (James Brooks/Alaska Beacon)
Officials warn of possible lawsuit in wake of Alaska governor’s education funding veto

Among issues are if veto violates Alaska’s constitutional guarantee of adequately funded public schools.

Youths compete in a choker setter race during last year’s Juneau Gold Rush Days at Savikko Park on Sunday, June 23, 2024. (Mark Sabbatini / Juneau Empire file photo)
A not-entirely-precise schedule of this year’s Juneau Gold Rush Days

Timing of events for 33rd annual weekend “depends on the number of contestants and speed of competitors”

The Black Bear chairlift at Eaglecrest Ski Area will not reopen because repairs are no longer practical, officials said Thursday. (City and Borough of Juneau photo)
Eaglecrest leaders decide Black Bear chairlift is beyond repair, seek alternatives to get skiers at their peak

Possibilities include converting Ptarmigan lift to triple-chair in addition to long-awaited gondola.

Homes in downtown and west Juneau on Friday, May 13, 2025. (Mark Sabbatini / Juneau Empire)
Short-term rental task force recommends rule adjustments, but no cap on units for property owners

Group suggests allowing multiple STRs for a single dwelling, “grandfathering” period for new rules.

President Donald Trump speaks to reporters at the White House on Thursday, June 12, 2025. (Doug Mills/The New York Times)
Opinion: The king of hubris

On Monday, President Donald Trump was asked if he planned to deploy… Continue reading

Rep. Nick Begich III, R-Alaska, speaks to the Alaska Legislature on Thursday, Feb. 20, 2025. At background are Senate President Gary Stevens, R-Kodiak (left) and Speaker of the House Bryce Edgmon, I-Dillingham (right). (James Brooks/Alaska Beacon)
Begich joins US House Republicans in voting to claw back public broadcasting money

Clawback, formally known as a rescission, subject to approval by Senate in a simple majority vote.

Most Read