Alaska’s budget basics

According to the National Association of State Budget Officers (NASBO), Alaska’s total expenditures in fiscal year (FY) 2021 were $14.9 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Alaska’s combined state and local direct general expenditures were $12.9 billion in FY 2019 (the most recent year census data were available), or $17,596 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

Alaska’s largest spending areas per capita were public welfare ($3,798) and elementary and secondary education ($3,198). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices. Further, per capita spending is often relatively high in states such as Alaska that have low populations and lots of space. Delivering services over large areas can drive up costs, and low density prevents states from taking advantage of economies of scale.

Alaska’s combined state and local general revenues were $12.1 billion in FY 2019, or $16,503 per capita. National per capita general revenues were $10,563. Alaska does not levy a general sales tax or an individual income tax. However, some localities levy general sales taxes. After federal transfers, Alaska’s largest sources of per capita revenue were charges ($2,246), such as state university tuition and highway tolls, and property taxes ($2,215). Alaska also collects a relatively large amount of revenue from severance taxes, which are taxes on the extraction of natural resources such as oil and natural gas. Alaska’s per capita severance tax revenue was $1,213 in 2019. Severance tax revenue is extremely volatile and can quickly rise and fall with the price and production of natural resources.

Alaska’s politics

Governor Mike Dunleavy, a Republican, was elected in 2018 with 51 percent of the vote. The next gubernatorial election is in 2022.

Alaska has a divided government. Although Republicans hold a majority of the seats in the House of Representatives (21 Republicans to 15 Democrats, with 4 independents), the speaker is an elected Republican who represents a coalition of mostly Democratic and independent lawmakers. Republicans control the Senate (13 Republicans to 7 Democrats). All Alaska House seats are on the ballot in 2022 because representatives serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2022, and the other half will be up for election in 2024.

Alaska’s budget institutions, rules, and constraints

Alaska uses an annual budget. The legislature must pass and the governor must sign a balanced budget, and deficits cannot be carried into the following year. Alaska further limits spending growth according to population growth and inflation. The limit does not apply to the state’s Permanent Fund or capital projects. Otherwise, the state must amend its constitution to exceed the limitation. Alaska limits its total debt service (but not its total authorized debt).

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Alaska’s current budget

Governor Dunleavy released his FY 2023 budget proposal in December 2021 and gave his state of the state address in January 2022.

Alaska enacted its FY 2022 budget in July 2021. The enacted budget included $10.3 billion in total spending and $4.3 billion in general fund spending. According to the governor, compared to the previously enacted budget, total spending decreased 22.5 percent and general fund spending declined 5.6 percent.

Under the American Rescue Plan, Alaska will receive $1 billion in direct state fiscal aid and $195 million in local government aid from the federal government. As of January 2022, Alaska had spent part of its state ARP funds on revenue replacement, public health programs, and economic development.

According to NASBO, Alaska’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2021: $6.6 billion/$14.9 billion

• FY 2020: $5.7 billion/$11.9 billion

• FY 2019: $5.9 billion/$11.2 billion

For more on Alaska’s budget, see

• the Office of Management and Budget (Alaska Governor’s Office),
• the Alaska Department of Revenue,
• the Alaska Division of Legislative Finance, and
• the Alaska Legislative Research Services.

Alaska’s economic trends

Alaska’s per capita income (per the Bureau of Economic Analysis) was $67,138 in 2021, ranking 10th among the states. It was above the national average of $63,444, but below the Far West regional average of $73,053. The state’s median household income (five-year estimate) was $77,790 in 2020, ranking eighth among the states and above the national average of $64,994. Alaska’s poverty rate was 10.3 percent in 2020 (five-year estimate), below the national rate of 12.8 percent.

Although Alaska’s averages tell a story about the entire state, Alaska is composed of diverse localities. For example, the city of Wasilla’s median household income was $62,667, and its poverty rate was 13.3 percent; the city of Juneau’s median household income was $88,077, and its poverty rate was 6.9 percent.

Alaska’s unemployment rate has historically been above the national average, but it was below the national average following the Great Recession. In recent years, however, Alaska’s unemployment rate has been among the highest in the country. (See how COVID-19 is affecting state employment and earnings data.)

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Alaska, the average unemployment rate in 2021 was 4.9 percent for white residents and 7.5 percent for Hispanic or Latino residents. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)

The major industries that contributed the most to Alaska’s gross domestic product (GDP) in 2020 were government, finance, transportation, mining, and social services (i.e. health and education). Government, transportation, mining, and social services contributed more to Alaska’s GDP than they did to the nation’s and region’s GDP, while finance was less important to Alaska than it was to the nation and region in 2020.

Looking at more specific industries, among those that accounted for at least one percent of Alaska’s GDP in 2019, pipeline transportation produced far more for the state than for the nation, contributing 8.9 percent to Alaska’s GDP and 0.2 percent to the nation’s. Other industries that overperformed in Alaska relative to national averages in 2019 were oil and gas extraction, state and local government, the military, and mining.

Alaska’s demographics

As of July 2020, Alaska’s population was 731,158. That was up 2.4 percent from 2010. The state’s population growth rate was slower than than the nation’s 6.5 percent growth over the same period. The Urban Institute estimates the state’s population will increase 29 percent between 2010 and 2030, more than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.