The Senate Judiciary Committee on Friday, April 25, 2025, heard testimony on Senate Bill 36, an appropriation‑limit bill and companion constitutional resolution that would set new spending limits tied to private‑sector gross domestic product. Senator Kaufman, sponsor of SB 36, presented the measure and his staff, Dominic Hartnett, summarized the constitutional and statutory language the bill would change.

The bill would create a two‑tier cap: a proposed constitutional upper limit set at roughly 15 percent of a five‑of‑six‑year average of state private‑sector GDP and a statutory lower limit at about 12 percent of that same measure. Kaufman described the proposal as a smoothing mechanism to reduce “boom and bust” swings in state operating and capital spending and said it is intended as a moderating influence rather than a strict lid on spending. “The current spending cap . . . is so high that . . . it can’t be broken because we could just never reach it,” Kaufman said, arguing the new formula would let the state spread capital work across several years and retain workforce capacity during revenue downturns.

Dominic Hartnett, staff to Kaufman, told the committee the existing constitutional limit is found in Article IX, Section 16 of the Alaska Constitution and that the current baseline number in that provision ($2,500,000,000 in the original text) has grown under statutory indexing to a level now above current appropriations (Hartnett said the adjusted figure would be just over $11 billion for FY 2026 under the current formula). Hartnett also said the bill would base the statutory cap on a five‑year trailing average of private‑sector GDP to reduce volatility.

Under the sponsor’s draft, the limit would apply to unrestricted general fund operating and capital expenditures. Exemptions discussed in the hearing include Permanent Fund dividend payments, appropriations to statutory or constitutional savings accounts (CBR, SBR), capitalization of state retirement accounts, disaster declarations and bond proceeds approved by a public vote; Hartnett also noted prior court decisions have treated school bond debt reimbursement as an exemption in the existing framework.

Committee members asked detailed questions about the bill’s design. Senator Keel questioned whether measuring only private‑sector GDP prioritizes the private sector over public obligations and services; Kaufman replied that the proposal seeks to focus policy on growing underlying private‑sector activity because that is the primary source of state revenues. Senator Myers and others pressed on technical choices — for example, why the draft excludes government spending from the GDP measure and why the constitutional percentage is 15 percent (the statutory lower limit is 12 percent in the draft). Kaufman and staff said the numeric parameters are negotiable and that the five‑of‑six‑year averaging and the choice of private‑sector GDP were intended to produce stability and to steer policy choices toward investment that grows the economy.

Other technical points raised included how the proposal treats appropriations “in a fiscal year” versus “for a fiscal year” (a wording difference that affects how supplementals are counted), and whether principal and interest on revenue bonds were properly exempted; committee members asked staff to provide legal memos and drafting clarifications on those items.

No final vote was taken. The committee chair said the panel would “hold this bill and this resolution for further review.” The committee scheduled its next meeting for Monday, April 28, 2025, at 1:30 p.m.

Why it matters: SB 36 would change how Alaska measures an upper bound for appropriations and could affect how the Legislature prioritizes operating programs versus capital projects if state revenues rise. The proposal’s exemptions (including Permanent Fund dividends and voter‑approved bond proceeds) and its use of private‑sector GDP were the central technical and policy issues discussed during the hearing.