Alaska’s governor signed the state’s fiscal 2025 budget into law in June of 2024, while also announcing a series of line-item vetoes. The budget provides for total expenditures (excluding the Permanent Fund) of $11.20 billion in fiscal 2025, a 4.0 percent decline from fiscal 2024 total expenditures (which includes supplementals). The enacted budget includes $4.97 billion in unrestricted general fund spending (a 3.3 percent decline from fiscal 2024), $932.1 million in designated general fund spending (a 1.5 percent increase), $1.74 billion in other spending (a 1.7 percent decrease), and $3.55 billion in federal spending (a 7.5 percent decrease). The budget also calls for $3.6 billion in total capital appropriations. In signing the budget, the governor announced line-item vetoes reducing the operating budget by $105.7 million and the capital budget by $126.3 million. Additionally, the budget includes a Permanent Fund Dividend of approximately $1,718 for each eligible Alaskan. Total state revenue (including unrestricted general fund revenue, restricted revenue, and federal revenue) is estimated at $16.52 billion in fiscal 2025 (a 6.8 percent increase from fiscal 2024), while total unrestricted general fund revenue is estimated at $6.45 billion in fiscal 2025 (a 1.5 percent decrease).3
Key Revenue Sources After Federal Transfers:4
- Property Taxes ($2,325 per capita)
- Charges ($2,143 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).