Capitol Report April 18, 2025

April 18, 2025

Senate Passes Capital Budget, Operating Budget Passes House

The 2025 legislative session is quickly approaching the 90th day, which means legislators have about a month remaining to finish their work on the FY26 budgets and advance any policy priorities before the regular session ends on May 21. 

House members spent much of the week in lengthy floor sessions debating amendments to the operating budget before passing the bill in a 21-19 vote. Senators unanimously passed the lean FY26 capital budget on Tuesday. The budgets will now be exchanged, giving House members a chance to consider the Senate’s capital budget, while the Senate reviews the House operating budget. 

Budget Highlights

For the House operating budget, there were a few amendments proposed on the floor that would have impacted the èßäÊÓƵ, but none were adopted. As a result, the final budget approved by House members retains all of the UA items included in the governor’s proposed amended budget, as well as those added during the House Finance Committee (*) process. This includes:

  • $22.4 million for employee compensation increases
  • $3.9 million for systemwide fixed cost increases
  • $2 million for UAA athletics (for FY26 and FY27) *
  • $2 million for UAF athletics (for FY26 and FY27) *
  • $5 million to assist UAF in achieving R1 research status (for FY26 and FY27) *
  • $2.5 million to bolster recruitment, retention, and graduation efforts *
  • $500k for UA student mental health services *
  • $2 million per year over three years ($6 million total) for UAF’s ACUASI drone program *
  • $1 million per year over three years ($3 million total) for UAF’s agriculture program *

The capital budget approved by the Senate was noticeably smaller compared to previous years due to the strained fiscal environment. The following èßäÊÓƵ items were included in the bill:

  • $5 million for UA deferred maintenance
  • $2 million for the UAS mariculture program
  • $1.25 million for the UAA Leaders Archives 

UA Senate Subcommittee Closes Out

On Tuesday, the University of èßäÊÓƵ Senate Finance Subcommittee closed out its work on the UA operating budget for FY26. Unlike the finance subcommittee actions seen in the House this year, the Senate subcommittees for the various state agencies made reductions to the budgets under their purview in an effort to rightsize the unbalanced operating budget. The èßäÊÓƵ was not immune to those budget reductions. The recommendations put forth by the UA subcommittee did not include any additions to the governor’s proposed budget, but did make the following reductions: 

  • $5.4 million cut to the employee compensation request
  • $82k cut to the Board of Regents travel, catering, and support staff budget
  • $238k cut associated with vacant personnel positions 

The subcommittee recommendations will be taken into consideration as Senator Hoffman, operating budget co-chair, develops the Senate Finance Committee’s version of the budget in collaboration with other members of the committee. There are still many steps left in the budget process before the final product takes shape, so things will continue to change as negotiations take place throughout the final month of the legislative session. 

K-12 Education Funding Update

The bill to increase the K-12 education base funding formula by $1,000 was vetoed by the governor yesterday, and lawmakers are now scheduled to hold a joint session on Tuesday to attempt a veto override vote. However, a similar override vote failed last year after falling one vote short of the 40 needed to successfully override the governor’s veto. There does not seem to be much confidence in the Capitol in lawmakers’ ability to reach the 40-vote threshold this time around, either.

The governor intends to introduce a new omnibus education bill with a $560 increase to the base student allocation, in addition to a number of policy priorities. The governor has said those policy priorities are a must in order for him to approve any proposed increase to K-12 education funding. 

What We’re Watching

Tuesday, April 22

  • 1:30 p.m. - House Finance: : Appropriations: Capital/Supplemental/Funds

Wednesday, April 23

  • 1:30 p.m. - House Finance: : Appropriations: Capital/Supplemental/Funds

Thursday, April 24

  • 1:30 p.m. - House Finance: : èßäÊÓƵ Innovation Council
  • 3:15 p.m. - House State Affairs: : Education Tax