After four months, lawmakers have finished their yearly legislative session. They passed dozens of bills and resolutions, a budget with a $1,000 Permanent Fund dividend and teed up several proposals for next year’s session.
Here’s some of what they did.
1. Passed a budget with a $1,000 PFD and very little new spending
With oil prices lower than forecast and widely expected to fall further — the federal government says tariff-induced economic uncertainty and rising global oil production are to blame for that — passing a budget was an especially challenging task this year.
“When we started, we were a billion and a half (dollars) underwater, and then after some adjustments, we were $2 billion underwater,” said Sen. Bert Stedman, R-Sitka, referring to the governor’s budget. “We navigated through the process here, and we ended up with a small surplus.”
The $1,000 Permanent Fund dividend is an all-time low for the state’s annual oil-wealth check, when adjusted for inflation. Dividends typically go out to Alaskans in the fall.
The Senate passed an especially austere budget, refusing nearly all of the governor’s requested additions and the vast majority of those added in the House’s version of the budget.
The unrestricted portion of the budget — the portion that lawmakers squabble over, excluding federal funds and other restricted revenue — is $6.2 billion this year, down about 5%, $369 million, from last year.
But in the end, some key areas saw spending increases. Education is by far the largest one — especially a boost to K-12 funding, more on that in a minute. But there’s also $5.5 million for child advocacy centers, $13.7 million in behavioral health grants, $7.7 million for child care, $2.5 million for senior centers and $880,000.
The head budgeter for the House, Rep. Andy Josephson, D-Anchorage, said lawmakers saw those as essential needs.
“Some of these investments are not enormous, but they have vast benefits downstream, and that's why we think they're warranted,” he said. “In a competition with that and the dividend, folks need to understand that when we spend this $50 million, that would amount to very, very little extra money in a dividend.”
An additional $50 million, if put towards the dividend, would come out to $80 per Alaskan.
Lawmakers tried to draw roughly $200 million from savings to fill an oil slump-induced budget deficit in the current fiscal year, but minority Republicans successfully blocked the three-quarters majority necessary to draw from the Constitutional Budget Reserve. Instead, the money will come from accounts for the state’s investment agency, the Alaska Industrial Development and Export Authority, and a state scholarship fund.
“I have, am having a hard time myself — this is, personally, no one else — drawing from savings to fund the budget right now, when I've had no negotiations with the Senate majority or the House majority,” Rep. DeLena Johnson, R-Palmer, said ahead of the vote.
2. Overcame a veto and increased public school funding
Lawmakers have sought for years to substantially increase basic state funding for public schools by raising the base student allocation, part of the state’s education funding formula. This year, they succeeded.
A joint session of the Legislature voted 46-14 to override Dunleavy’s veto of House Bill 57, which increases basic per-student funding by $700, bans student cellphone use and makes a variety of changes to laws surrounding charter schools aimed at making them easier to create and renew. Eleven House and Senate minority Republicans joined the bipartisan majority coalitions to approve the bill.
Proponents said the funding would ease, but not eliminate, budgetary pressures that have led school systems across the state to reduce their offerings. They said additional funding would help reduce class sizes and, since the bill changes the state’s funding formula indefinitely, prevent them from having to prepare to lay off many teachers in staff while funding remains in flux, as as been the case in recent years.
Opponents, including the governor, said the bill didn’t make enough meaningful changes to education policy.
Because the governor has line-item veto power, the veto override is not the final word — Dunleavy said he has not decided whether to reduce education funding in the state budget.
3. Eased access to tablet computers for prison inmates
One bill that passed this year, House Bill 35, would allow prisoners to use tablet computers for things like classes, telehealth appointments, even virtual visits when people can’t travel long distances.
Backers say that tablets can also help make prisoners familiar with today’s very electronics-heavy world. Sen. Robb Myers, R-Fairbanks, was the primary advocate for the bill in the Senate.
“I think it can be a significant influence, both to help lower our recidivism rates and to help get some of our costs under control within the prison system,” he said.
Support for the bill crossed party lines. It passed the Senate unanimously and the House by a 28-12 vote.
4. Looked to out-of-state corporations for additional tax revenue
Members of the Senate’s bipartisan majority caucus spent much of the session calling for the state to raise new revenue to alleviate the fiscal crunch. Only one of those bills passed either the House or Senate.
That’s Senate Bill 113, which passed both chambers and is headed for the governor’s desk. It’s a change to corporate income taxes that aims to raise more money from out-of-state companies by changing how the tax code looks at sales over the internet to Alaska consumers.
“It doesn't tax a single Alaskan. In fact, it lowers taxes on Alaskans,” Sen. Bill Wielechowski, D-Anchorage, said. “It raises taxes on Outside tech billionaires.”
The bill could face a veto from Gov. Mike Dunleavy, who said Monday he isn’t interested in signing tax bills until lawmakers come up with a comprehensive plan for the state’s fiscal future. That’s a goal that has eluded lawmakers and the governor for years, though Dunleavy said he’s hoping to get together with a small group of lawmakers this summer to hammer out some proposals.
It passed largely along caucus lines, 14-6 in the Senate and 26-14 in the House, with seven minority Republicans crossing over to support the measure.
5. Passed a new version a app-based rental car tax bill vetoed last year
Last year, lawmakers passed a bill that would have required peer-to-peer car rental companies like Turo to collect rental car taxes. Currently, the car owners are required to keep track of their taxes and file with the state, but many don’t, state officials say.
Dunleavy vetoed the bill, with a spokesperson calling it “unnecessary taxation.” That’s despite the fact that the bill did not change whether the tax was owed — just who was responsible for collecting it and sending it to the state. In fact, the bill cut taxes on Turo and similar platforms.
This year, lawmakers passed the very similar House Bill 123 in a near-unanimous vote.
There’s one significant change: It would cut rental car taxes for traditional agencies like Hertz and Avis by 1%, to 9%. Last year’s bill did not change the rental car tax rate. The rate for Turo and similar rental platforms would be lower, at 7%. This year’s bill, like last year’s, would not be retroactive, meaning Turo owners would not be liable for back taxes they haven’t submitted to the state.
Dunleavy has not said whether he’ll sign the bill this time around.
6. Sought to limit the interest rates payday lenders can charge
One bill lawmakers passed this year places strict limits on so-called “payday loans,” short-term, high-interest loans.
“These loans, often marketed as quick solutions, come with interest rates that average 421% in Alaska, according to the Alaska Public Interest Research Group, and frequently trap borrowers in cycles of debt,” sponsor Sen. Forrest Dunbar, D-Anchorage, said at a hearing earlier this year.
Senate Bill 39 caps the interest rate payday lenders can charge to 36%, the maximum rate for most other loans. Opponents said the bill was rushed and argued it could reduce low-income residents’ access to credit.
“This is government overreach,” said Rep. Jamie Allard, R-Eagle River. “Individuals should be able take loans as they wish at whatever percentage rate.”
It passed largely along caucus lines with the bipartisan majority caucuses in support: 14-6 in the Senate and 24-16 in the House.
7. Re-passed bills passed last year after midnight, and another challenged on constitutional grounds
Last year, Dunleavy vetoed five bills passed after midnight on the last day of the legislative session, which he said violated the state Constitution.
This year, lawmakers passed new versions of three of them:
- House Bill 31, removing what sponsor Rep. Louise Stutes, R-Kodiak, said was a duplicative registration requirement for commercial fishing vessels
- House Bill 69, also from Stutes, which authorizes $75 million in bonds for a cruise terminal upgrade in Seward
- Senate Bill 15, sponsored Sen. Kelly Merrick, R-Eagle River, which allows 18-20-year-olds to serve alcohol under some circumstances and requires a new sign warning patrons that alcohol can cause cancer.
Lawmakers also re-passed elements of another bill from last year combining several unrelated proposals, which was the subject of a constitutional lawsuit. The state Constitution requires bills to be limited to a single subject. This year, lawmakers passed the four proposals as separate bills in an attempt to resolve the dispute.
8. Issued a variety of requests to the federal government and others
Lawmakers use resolutions to send messages, often to the federal government. This year, they passed a wide variety of resolutions. Here are a few:
- House Joint Resolution 4, urging the federal government to keep the name Denali for North America’s highest peak
- House Joint Resolution 5, asking Congress to extend the expired Secure Rural Schools program, which provides education funding in areas with large amounts of federal forest land
- House Joint Resolution 11, opposing tariffs on Canada and affirming the nation’s sovereignty as an independent nation
- House Joint Resolution 13, calling on the president to resume evacuation flights and expand visas for Afghans who helped U.S. forces
- Senate Joint Resolution 10, urging Congress to issue the Congressional Gold Medal to Hmong veterans who assisted the U.S. in the Vietnam War
- Senate Joint Resolution 12, requesting repairs and better maintenance of federal weather buoys
- Senate Joint Resolution 15, asking the state’s congressional delegation to oppose cuts to Medicaid.
9. Left a few issues on the table for next year
Lawmakers also left legislation in three key areas unfinished.
An election reform bill, Senate Bill 64, stalled in the final days of the legislative session amid opposition from Republicans who said it made elections less secure. Lawmakers decided to hold the bill — and a separate bill that would reimpose limits on how much can be donated to candidates for state office, House Bill 16 — for next year.
A bill that would reinstate a pension system for state employees, which both the House and Senate’s bipartisan, Democrat-heavy majority caucuses said was a top priority, also did not cross the finish line this year. Though House Bill 78 passed the House on a caucus-line 21-19 vote, the primary pension advocate in the Senate, Sen. Cathy Giessel, R-Anchorage, called the pension bill a “two-year project.”
Also left unfinished were reforms to the structure of the Alaska Permanent Fund. Though there’s roughly $80 billion in the fund, managers have warned repeatedly that its antiquated two-account structure threatens its ability to pay for state services. They asked lawmakers to consider a constitutional amendment that would combine the two accounts into one, similar to a university endowment. They also asked that the amendment ensure that lawmakers cannot draw more than 5% of the fund each year. Though the 5% draw is part of state law, legislators can ignore it by a simple majority vote.
Though amendments were proposed in the House and Senate, they did not pass either body this year.
Because this is the first year of a two-year Legislature, bills don’t die at the end of the session — lawmakers can attempt to pick up where they left off next year.
The second session of the 34th Alaska Legislature is slated to gavel in on January 20, 2026.
