Road improvements, safety upgrades included in Senate’s $2.9B capital budget; bill now headed to House
JUNEAU, Alaska (KTUU) - The state Senate’s budget bill for fiscal year 2026 will soon be taken up by House lawmakers after passing the Senate on Tuesday morning.
With the advancement of Senate Bill 57, legislators pushed through a $2.9 billion budget plan that includes more than $160 million in unrestricted general fund spending, which comes in at approximately $119 million under the original budget proposal from Gov. Mike Dunleavy.
“I wish — as the capital budget chairman for the seventh time since I’ve been here — that it could be substantially higher,” said Sen. Bert Stedman, R-Sitka, during the Senate floor session Tuesday. “But, under these circumstances, that is not the case, if we’re going to get our budgets balanced and protect us — the state — from these upcoming headwinds.”
The Senate Majority said in a prepared statement Tuesday that the budget pushed through was “achieved through targeted reductions, fund reappropriations, and a strategic increase in the Alaska Industrial Development and Export Authority (AIDEA) dividend,” and that the Senate’s budget bill is “emphasizing statewide infrastructure maintenance, public safety upgrades, and essential infrastructure investments.”
“We have a lot of stuff that’s old projects, and what the finance co-chairs did is went back into those old projects and said, how do we take some of that money and scoop it out of there and bring it forward to what we need now?” said Sen. Mike Shower, R-Wasilla, who is a member of the Senate Minority. “And that just kinda shows that there’s a lot of things that are stalled out there, that are sitting in accounts that are not being used. And the fact that they were willing to go into that and find some of that and bring it forward, that we need [Friday], I thought was really good.”
In a press conference Tuesday afternoon, Sen. Gary Stevens, R-Kodiak, said in part that lawmakers had to make tough decisions over cuts, largely because funding is simply not available for every request, however great the need may be.
“We all have heartfelt projects,” said Stevens, who is also currently serving as Senate President. “I have Homer, that’s about to lose — and has lost access to — the spit. They could lose that road very easily. [That’s] an issue that, in a normal year, we’d talk about, but we can’t even talk about it now, because there’s just simply no money there.”
Sen. Jesse Kiehl, D-Juneau, said during the same presser that options for the future need to be explored.
“As we look at how to pay for the operating budget, with the price of oil continuing to slide, I think it really points to the need for the state to do some additional steps to address revenues,” Kiehl said, “unless the desire is just to take it all out of PFD’s. I don’t think Alaskans as a whole like that option.”
Stedman added that pretty much “everything is in play.”
As part of the final version of the bill coming out of the Senate, there was also movement of about $68 million in unused funds from prior projects and federal highway and airport match funds, along with the increase in the AIDEA dividend, which the Senate Majority said will generate about $12.5 million in additional revenue.
Among the allocations in the capital budget are about $36 million for deferred maintenance projects, including “major” maintenance for K-12 schools across the state, work on University of Alaska facilities, maintenance at Sitka’s Mount Edgecumbe High School, and judiciary facility updates, as well as “emergency repairs” that are needed in various communities.
More than two dozen new capital projects are part of the bill as well, including renewable energy projects in rural parts of the state, maintenance on the Dalton Highway and on Alaska Marine Highway System vessels, plus courthouse security and information technology improvements.
SB 57 will next head to the House for consideration.
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