January 30, 2026
Governor Unveils Fiscal Plan, UAA’s ISER Presents Research on “Alaska’s Fiscal Options” to Legislators; UA House Subcommittee Moving Forward; Higher Education Investment Fund Replenishment Advancing
The second week of the 2026 legislative session saw the introduction of a proposed fiscal plan package from Governor Dunleavy, continued committee hearings on the state operating budget, as well as a presentation in Juneau from UAA’s Institute of Social and Economic Research (ISER) on the economic impact of various fiscal options the state could consider.
Meanwhile, legislative meetings continue. The UA budget team is working with Rep. Andy Josephson and Rep. Alyse Galvin to prepare for the upcoming UA House subcommittee meetings. Areas of interest include UA employee compensation requests and operating cost increases, with an emphasis on public safety, student mental health services, and recruitment, retention, and graduation.
Importantly, the House Finance Committee has publicly noticed a hearing to take up the fast-track supplemental budget, which includes necessary money to replenish $129.6 million to the HEIF. This is a key student and future workforce priority.
Governor Reveals Fiscal Plan Details
Governor Dunleavy introduced his fiscal plan package earlier this week, which consists of legislation that proposes a statewide sales tax, changes to the state’s corporate income tax and oil production taxes, as well as a new per-barrel surcharge for trans-Alaska pipeline corridor maintenance.
Alongside the tax legislation, the governor also introduced a constitutional amendment to combine the Permanent Fund’s earnings reserve account (ERA) with the corpus of the fund, which would limit the amount of funds that can be drawn from the ERA. The constitutional amendment, Senate Joint Resolution 23 & House Joint Resolution 30, would also enshrine a “50/50” formula for the PFD, with 50% of the annual draw on the market value of the fund going toward dividends for all eligible Alaskans and the remaining 50% for government operations.
The legislature has yet to begin formally reviewing the governor’s proposals, but the fiscal package is sure to generate significant debate and discussion this session.
ISER Presents Fiscal Research to Legislators
At the request of Governor Dunleavy’s administration, economists with UAA’s Institute
of Social and Economic Research (ISER) presented findings from their recent economic
study to a packed audience at the Centennial Hall in Juneau. ISER researchers evaluated
11 primary fiscal options plus three variations. These included changes to state spending,
broad based taxes, and business taxes. Nine of these options were selected to match
those ISER evaluated in 2016. In addition, ISER modelled two new options related to
business taxes. ISER also evaluated three variations of these options.
A recording of the ISER presentation can be viewed on KTOO’s Gavel Alaska. Detailed information about ISER’s research can be found on their website.
New Bill Would Replenish Higher Education Investment Fund
At the beginning of the week, the House Finance Committee introduced a separate “fast-track” supplemental appropriation bill, HB 283, which is meant to address a handful of high-priority funding needs for the current fiscal year, FY26. One of those needs is the replenishment of the Higher Education Investment Fund (HEIF), which is critical for the stability of student scholarships and grants.
Last year, the legislature used the HEIF to cover the state’s budget shortfall, resulting in $129.6 million being drawn from the fund. In order to ensure that stable, reliable funding is available for students who rely on Alaska Performance Scholarships and Alaska Education Grants to help pay for their education, repaying the HEIF is a critical need.
Legislators have heard from many in the construction industry about the importance of quickly passing an appropriation bill to address the approximately $70 million in match funding that is needed to receive federal transportation dollars in advance of the summer construction season. As a result of that advocacy, the House Finance Committee introduced this fast-track bill to potentially resolve some of the more timely funding needs early on in session. The inclusion of the HEIF repayment in the fast-track bill is an encouraging step toward providing stability for students.
What We’re Watching
Monday, February 2
- 1:30 p.m. - House Finance: House Bill 263: Appropriations: Operating Budget; Amend; Supplemental.
- 1:30 p.m. - Senate Labor & Commerce: Senate Bill 81: Public Employer Pension Contributions.
Tuesday, February 3
- 12:00 p.m. - House University of Alaska Finance Subcommittee: Presentation: FY26 Mid-Year Status and FY27 Budget Overview by Pat Pitney, President of the University of Alaska.
Wednesday, February 4
- 9:00 a.m. - Senate Finance: Overview: Governor’s FY26 Supplemental Budget by Office of Management and Budget.
- 1:30 p.m. - House Finance: House Bill 283: Appropriations: Supplemental. House Bill 263: Appropriations: Operating Budget; Amend; Supplemental. Overview: FY26 Governor’s Supplemental Budget by Office of Management and Budget.
Friday, February 6
- 8:00 a.m. - House Education & Early Development Finance Subcommittee: Presentation: AK Performance Scholarship & Education Grants by Kerry Thomas, Executive Director of Alaska Commission on Postsecondary Education.
- 1:30 p.m. - House Finance: House Bill 263: Appropriations: Operating Budget; Amend; Supplemental.
For more information, contact Director of State Relations for the University of Alaska System Chad Hutchison, cell 907-378-3946, email clhutchison@alaska.edu. You can also follow the University of Alaska Government Relations on our Twitter page.