Alaska’s governor signed the state’s fiscal 2026 budget into law in June of 2025, while announcing a series of line-item vetoes. Total appropriations from all fund sources, including both operating and capital, are $14.73 billion, a 4.0 percent decrease from fiscal 2025. The budget provides for total operating expenditures (excluding capital) of $11.85 billion in fiscal 2026, a 3.4 percent decrease from fiscal 2025. The enacted budget includes $5.10 billion in unrestricted general funds spending (a 1.8 percent decrease), $912.9 million in designated general fund spending (a 5.1 percent decrease), $1.99 billion in other spending (a 2.1 percent increase), and $3.85 billion in federal spending (a 7.7 percent decrease). The budget also calls for capital appropriations of $2.88 billion, a 20.4 percent decrease from fiscal 2025. Additionally, the budget includes a Permanent Fund Dividend of $1,000 for each eligible Alaskan. Total state revenue is estimated at $15.68 billion in fiscal 2026 (a 6.1 percent decrease from fiscal 2025), while unrestricted revenue is estimated at $2.33 billion (a 9.4 percent decrease from fiscal 2025).3
Key Revenue Sources After Federal Transfers:4
- Property Taxes ($2,384 per capita)
- Charges ($2,287 per capita)
Charges are public payments connected with a specific government service, such as tuition paid to a state university, payments to a public hospital, or highway tolls. Alaska does not levy a general sales tax or an individual income tax. Alaska also collects a relatively large amount of revenue from severance taxes, which are taxes on the extraction of natural resources such as oil and natural gas.
State Budget Rules:4
Alaska uses an annual budget. The legislature must pass and the governor must sign a balanced budget, and deficits cannot be carried into the following year. Alaska further limits spending growth according to population growth and inflation. The limit does not apply to the state’s Permanent Fund or capital projects. Otherwise, the state must amend its constitution to exceed the limitation. Alaska limits its total debt service (but not its total authorized debt).