Every December, the governor of Alaska is required to release a budget proposal for the upcoming fiscal year. In this upcoming legislative session (in 2022), policymakers will be enacting the FY 2023 state budget.
Released on December 15th 2021, the Governor’s FY 2023 budget proposal comes in at a total of $10.88 billion, with $6.3 billion of that coming from state funds. In comparison, the FY 2019 enacted budget plus supplemental spending was $10.9 billion (inflation-adjusted to 2021), with $6.8 coming from state funds.
In APF’s opinion, it’s most useful to compare the FY 2023 budget to FY 2019 spending rather than FY 2022 because the federal and state response to the COVID-19 pandemic and the resulting economic fallout in FY 2020-2022 required very irregular spending. While state expenditures have decreased between FY 2019 and FY 2023, federal funds have increased.
We are encouraged by the decrease between FY 2019 and FY 2023. However, current revenue forecasts are looking up and we caution policymakers to be responsible as they will be tempted to spend the additional estimated revenue in the coming year. A repeat of the massive budget bills in the early 2010s would be harmful to the state. Additionally, it is critical to spend new federal funds thoughtfully, on one-time expenditures rather than ongoing programs that will require state funds in the future after federal funds expire.