Alaska budget outlook again at the forefront
Crowther named DNR Commissioner-designee
through stewardship and responsible use of our resources.” Crowther first started at the depart - ment in 2012 and most recently served as deputy commissioner managing its oil and gas, project permitting and geological survey divisions. Before serving as deputy commis- sioner, he worked as director of state and federal relations for Alaska, based in Washington, D.C., and as counsel to U.S. Sen. Lisa Murkowski on the Senate Committee on Energy and Natural Re- sources. He is originally from Anchor- age and earned his bachelor’s degree in economics from Dartmouth College and juris doctorate from Georgetown University Law Center.
Alaska Governor Mike Dunleavy re- cently named John Crowther commis- sioner-designee for the Alaska Depart- ment of Natural Resources. Crowther was appointed acting commissioner last month and his name is submitted to the Alaska Legislature for confirma - tion during the 2026 session. “John Crowther brings a deep understanding of Alaska’s natural re- sources and a proven commitment to responsible stewardship. His balanced approach to development and con- servation makes him an exceptional choice to lead the Department of Natural Resources and serve the long- term interests of Alaskans,” Dunleavy said.
compared with the amount recom- mended by the Alaska Retirement Management Board. In addition, no assumptions are included for state employee union contracts still under negotiation. There are also no increases shown for the state’s roughly 50% share of Medicaid due to federal changes. The outlook for future revenues is mixed in the fall revenue forecast, with declines in production and oil prices expected in the near-term but increases expected after new oil fields on the North Slope begin pro - ducing. Also, the state has a cushion against uncertainty in oil revenues. The bulk of income to support the state budget now comes from earnings from Alaska’s $85 billion Permanent Fund, and this income is up. In FY 2026, the current budget year, the Fund paid $3.8 billion to support the budget. This will rise to $4 billion next year, in the FY2027 budget year. The governor also said he will propose a long-range fiscal plan to be presented to the Legisla- ture, which will include new revenue measures. While some people believe a new state personal income tax is the most effective way to bring in substantial income, this would be politically dif - ficult in the 2026 legislative session particularly since this is an election year. A state sales tax appears the next best revenue option although it has complications. Local sales taxes ex- ist in most Alaska municipalities so there is a potential for “pancaking” in sales tax with a state tax added to a local tax.
large draw on savings to fund a large PFD. However, the governor has cham- pioned a large PFD every year since being elected in 2018 and his desire for a large dividend, in his final year in office, will affect the Legisla - ture’s deliberations on the budget. The legislative politics appear to be against him but the governor still has a lot of influence. He could, for example, threaten to use his line-
Governor again pushes for larger PFD payments It will be another tight year for money, with oil prices expected to dip along with oil production. How- ever, there appears to be enough money to pay most of the state’s
“The Department’s constitution- al mission to develop, conserve and maximize the use of Alaska’s natu- ral resources is critical to our state,” Crowther said. “I will continue work- ing as hard as I can to advance this mission and improve Alaska’s future
item veto power to cut enough from spending for a PFD larger than $1,000, although a very large dividend seems unlikely. Meanwhile, the budget as proposed is close to being balanced without the large divi- dend, according to the Legislative Finance Di- vision. Total Undes- ignated General Fund (UGF) spending, which the amount the Legis- lature directly controls
bills including a Per- manent Fund Dividend (PFD) of about $1,000, the same amount paid this year. This is according to an analysis by the non - partisan Legislative Fi- nance Division. There could even be a small $130 million surplus, but unexpected ex- penses could consume that, the finance divi - sion noted. Gov. Mike Dunleay is pushing for a large
in appropriations, is $6.085 bil - lion in the governor’s budget plan against revenues of $6.216 billion. The estimate includes the governor’s capital budget of $159.6 million and a 3% inflation increase of $50.7 mil - lion in K-12 school funding. However, the governor’s plan so far does not include several key items, so the expenditure total will inevitably rise. For example, the capital budget so far includes only the required match to federal funds and has no capital projects for state agencies or school districts. The budget also appears to understate the state contribution to public em- ployee retirement by $37.7 million
PFD but that would throw the bud- get out of balance by about $1.9 bil - lion, requiring a large draw from the state’s Constitutional Budget Re - serve (CBR), leaving $1 billion in an emergency savings account that now has just under $3 billion. The size of the CBR draw and the politics of this make the large dividend highly un - likely, however. Withdrawals from the reserve ac - count require a three-quarters vote in the House and Senate, which is unlikely given the current partisan makeup of the two bodies. Demo- crats and moderate Republicans are in the leadership positions in both bodies. Generally, they oppose a
— Tim Bradner
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THE LINK: The Official Magazine of the Alaska Support Industry Alliance | WINTER 2026
www.AlaskaAlliance.com
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