Alaska House lawmakers remain divided over whether to withdraw $500 million from the state’s savings account, known as the Budget Reserve Fund, to cover budget shortfalls and support state services, legislative leaders said Monday. The disagreement has stalled progress on the Legislature’s operating budget ahead of the scheduled session adjournment next month.
House Majority leaders are pushing to tap the savings to avoid deep cuts to education, public safety, and health services. They argue that the state has ample reserves and that withdrawing funds now would help stabilize finances without raising taxes or triggering program reductions.
However, a faction of Republican lawmakers is urging more caution, warning that depleting the reserve entirely could weaken Alaska’s financial security and expose the state to future economic instability, especially if energy prices remain volatile. Critics of the proposal also say lawmakers should tighten spending elsewhere before dipping into the savings.
Talks between the House majority and the fiscal conservatives have produced no compromise, leaving budget negotiators scrambling to find an alternative plan. As of Monday, the Legislature had not scheduled a vote on the proposal to withdraw the $500 million.
The Budget Reserve Fund, which was created to shield Alaska from economic downturns and revenue shortfalls, has swelled in recent years due to high energy revenues and fiscal discipline. Supporters of tapping the fund say its current balance can absorb the withdrawal, while opponents caution that future uncertainties merit preserving the cushion.
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Lawmakers plan to continue discussions this week as the session deadline nears. Failure to agree on the budget could lead to a special session or temporary spending measures to keep state government operating.
