The Alaska State Legislature's Senate Finance Committee met on March 19, 2025, to discuss significant budgetary concerns for the upcoming fiscal years. A primary focus of the meeting was the projected deficits facing the state, particularly in fiscal years 2026 and 2028.

The committee highlighted a substantial deficit of $504 million for FY 2026, which contributes to a total deficit of $677 million across FY 2025 and FY 2026. This financial shortfall is attributed to rising expenditures that are expected to match revenue growth closely. In FY 2027, while revenue is anticipated to increase, expenditures will also rise, leading to a slightly higher deficit.

Looking ahead to FY 2028, the committee projected an even larger deficit of $728 million. This increase is largely due to slower revenue growth and a forecasted decline in oil prices, which are expected to drop to $66 per barrel. The discussion also included the Alaska Marine Highway System, which is set to receive an additional $66.5 million in FY 2028, relying on federal funds that are set to expire after FY 2027. This funding will need to be replaced with unrestricted general funds (UGF) to maintain operations.

The committee's discussions underscore the urgent need for legislative action to address these growing deficits and ensure the state's financial stability in the coming years.