The governor will spend his final year on a fiscal plan and stabilizing state revenue, not education reform
- Jasz Garrett
- 16 hours ago
- 5 min read
Dunleavy looks forward to pipeline projects, criticizes the Legislature’s recent focus on school funding rather than policy
By Jasz Garrett
Juneau Independent
Gov. Mike Dunleavy is focused on leaving a fiscal plan in place – something lawmakers have discussed for decades — and largely leaving education by the wayside for the remainder of his tenure.
Dunleavy looked at his goals for the year ahead as he spoke with reporters on Tuesday afternoon at the governor’s mansion before hosting the annual holiday open house. He is set to release a budget draft this week as he enters his final year as Alaska’s governor.
“Fiscal plan, pipeline, definitive pipeline project that actually has pipe on the ground here by August is the hope and the game plan,” he said. “A lot of good work with the federal government on things like Ambler Road, West Su (Susitna) access road, the people in King Cove are finally going to get a road. I think you’re going to see a lot of work on mining, rare earths, minerals. We’ve got at least seven or eight icebreakers earmarked in the big bill.”
Alaska is facing a dire financial situation, largely due to sharply declining oil prices over the past couple of years, lending greater urgency to years of talk by lawmakers about a stable, long-term financial plan for the state that’s not based on oil production. Among the many ideas proposed are expanding other industries, implementing income and/or sales taxes, and accelerating the growth of the Alaska Permanent Fund to maximize its earnings. Dunleavy acknowledged that helping solve the long-standing budget-balancing issue will require methods beyond relying “on the backs of the PFD or CBR.”
The most recent oil price as of Monday is $63.74 per barrel, according to the Alaska Department of Revenue, well below the $68 per barrel on which the current year’s budget is based. The U.S. Energy Information Administration recently announced that Alaska will increase oil production by 13% in 2026, a figure the governor cited.
Dunleavy has generally rejected new or increased taxes and, in recent years, has proposed budgets with huge deficits that would have drained a sizable percentage from a roughly $3 billion budget reserve fund used to cover shortfalls. The deficits are mostly due to proposing “full” Permanent Fund Dividends of a few thousand dollars per resident, which most legislators say the state can no longer afford.
When asked on Tuesday if he believes a full PFD is still realistic and if he will consider a sales tax as part of his proposed budget, the governor declined to give a specific answer.
“I think we have a tough couple years,” he said. “Next three, four, five years are going to be tough. We're going to have to make some tough decisions, and that's why we will roll out a fiscal plan solution for the next five years.”
Dunleavy said he expects expanded oil and other natural resource production — much of it enabled by President Donald Trump's regulatory easing — will provide sustainable, long-term revenue for the state beyond the challenging few years ahead.
“I really do believe that Alaska is poised for the next several decades, I think, to really have some good things happen up here,” Dunleavy said. “So I'm excited about that. So we’re going to try and set things up for the next governor that comes in and the legislature so that we don't leave them with a lot of problems, but hopefully a number of solutions.”
The Republican governor also said education was no longer a priority for him in the upcoming legislative session, after suffering defeats at the hands of bipartisan majorities in the House and Senate during the past session.
“The Legislature made a decision, in my opinion, that they’re OK with the performance of our schools, which I think is unfortunate. We have the best charter schools in the nation. We have a great, robust homeschool approach,” Dunleavy said.
He said his administration will focus on passing the tribal compacting bill, but in terms of major reform, Dunleavy said the Alaska Legislature made clear in the last session that it is not interested. Lawmakers overrode his veto of raising the Base Student Allocation by $700 in May and again in August, and the governor said he sees little chance his policy reform goals will be addressed now that education funding has been increased.
“But I’ve always said this for year after year after year, that once the issue of money is settled, nobody wants to talk about policy,” Dunleavy said on Tuesday. “So unfortunately for us, I think we're going to skip over that this year – not from my perspective – but I don’t think enough of the people in the Legislature really have a desire to fix the outcomes.”
Dunleavy’s stated goals have been to improve student test scores and educational opportunities for rural and Alaska Native students. Another idea strongly supported by the governor is open enrollment — allowing a student to move between different schools and school districts, regardless of where they live.
Leaving the governor's mansion with a plate of cookies for his daughter, Sen. Jess Kiehl, D-Juneau, was asked if the Legislature is no longer interested in education reform.
“So first of all, we have an Education Funding Task Force, and we’ve been meeting, and we've been working,” Kiehl said. “We continue to work. But also, I just talked to the commissioner of education over there, right? And no – all ideas considered, all work engaged. It would be a mistake to think that we weren’t going to try and do better by any issue that comes to us, including education.”
The Task Force on Education Funding was established by law through House Bill 57 in May, and members had their first meeting in August. The most recent meeting was Nov. 10.
Some of the governor’s policy goals have been discussed by the task force, which will continue to meet throughout this legislative session. Kiehl said he sees opportunities for the tribal compacting bill introduced last session.
Dunleavy’s other future goals included initiatives in daycare, housing, data farms, and AI – even proposing Alaska could become a Data Transportation Center.
When asked about the highs and lows during his time as governor, Dunleavy said a low was 73 declared disasters under his tenure, and summarized how residents and assisting agencies have responded and continue to do so, namely in western Alaska. He also said a positive for the state is its general avoidance of political violence, lootings, burnings and riots, noting he felt safe having community members come walk through the mansion in a celebration of Christmas.
“When you look at the turmoil across the country, and you look at the turmoil across the world, I think Alaska is in pretty good shape,” Dunleavy said. “I think we have a lot to look forward to. We have a lot of resources here and I think we got a lot of great people.”
• Contact Jasz Garrett at jasz@juneauindependent.com or (907) 723-9356.
