Dunleavy’s FY 25 budget proposal includes $987 million draw from reserves



(The Center Square) – Gov. Mike Dunleavy presented a $13.9 billion total budget for fiscal year 2025 on Thursday that, if approved by the legislature, requires a $987 million draw from the state’s constitutional and statutory budget reserves.

The governor said the shortfall is due to declining oil prices and production.

The $10.5 billion operating budget limits state agency growth to 1%, Dunleavy said.

The capital budget includes unrestricted general fund, federal monies and other allocations. Dunleavy included $3.9 billion for school construction projects.

The governor said an increase to the base student allocation is not in the operating budget.

He said he hopes lawmakers consider a bill that would give teachers a bonus between $5,000 and $15,000, depending on where they teach, with rural teachers receiving more.

“The question has always been if we put money in the BSA, that the base student allocation as part of the formula for funding or if we put money into the education world in various form for various purposes,” Dunleavy said. “This bill is about $58 million and its much lower than what some are advocating for in the BSA.”

The budget also includes 20 full-time positions in the Department of Health to process supplemental nutrition assistance program applications, also known as SNAP, to help with a backlog of cases.

Health Commissioner Heidi Hedberg said the department is creating an online application similar to the Permanent Fund Dividend application to ease the backlog.

The budget also includes:

Two million dollars for the Department of Law to defend lawsuits filed against the stateTwenty-five million dollars for Alaska Housing Finance Corporation Downpayment Assistance Grants. An additional $62.6 million will go toward the corporation’s annual housing programs.Funding for seven new investigators with the Alaska State Troopers. Three will focus on crimes against children and four investigate missing and murdered Indigenous persons.

Alaska lawmakers will consider the governor’s budget proposal when they return to Juneau on Jan. 16.

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