House Finance Subcommittee adopts FY27 Department of Revenue budget, limits funding for APFC’s second office

Juneau — The House Finance Subcommittee on Friday adopted the Department of Revenue’s fiscal year 2027 operating budget as reflected in the subcommittee’s budget action (BA) report and approved two member amendments that restrict funding for a second Alaska Permanent Fund Corporation (APFC) office.

Acting Chair Representative Josephson opened the meeting and said the committee would finish work on the department’s FY27 request and adopt the BA report. The committee adopted the BA sheet after staff presented the packet and members discussed specific line items and funding sources.

A staff presentation summarized the FY27 request as $485,581,000 in all funds, with designated funds of $3,495,700, other funds of $336,383,600 and federal funds of $110,464,100; unrestricted general fund (UGF) numbers cited in the transcript were unclear. The presentation identified several requested increases and decreases across pages of the BA report and noted the subcommittee’s recommendations match the governor’s amended request on the items shown.

Committee discussion flagged three structural requests that the subcommittee recommended rejecting: item 18 (consolidating juvenile office operations into a single APFC appropriation), item 25 (moving APFC investment and management fees into the single APFC line) and item 28 (moving IT and software licensing into the single APFC appropriation). A number of members said they support maintaining separate appropriations for transparency and legislative oversight.

"It creates the smallest bit of transparency that we are allowed as the legislature when it comes to how the corporation is spending the dollars in operations," Representative Vance said in support of keeping separate line items.

The staff presenter highlighted other line items: several small increments tied to an IT classification study affecting the department’s positions; a temporary $150,000 increase to hire outside counsel for investment due diligence; a roughly $611,000 increase to pay ongoing cloud hosting costs for the dividend application information system (implementation anticipated July 2026); a $490,000 reduction from deleting long-term vacant positions; and a $15.3 million increase in federal receipts to reflect higher voucher-program rents.

Representative Holland asked why funding for two economist positions was shifted to charitable gaming receipts rather than a plain general-fund appropriation. Fiscal analyst Connor Bell confirmed the source is excess charitable gaming receipts identified in the tax division; Acting Commissioner Janelle Earls said the department designated those excess receipts to expand economic-research capacity and modeling.

Member amendments focused on APFC’s second office. Representative Story moved Amendment 1 to authorize $1,000 to "decommission" the APFC second office, characterizing the amount as a budgetary placeholder that signals legislative intent not to fund a substantive Anchorage office. Representative Story said the second office adds costs and does not directly increase the fund’s earnings. Fiscal analyst Connor Bell explained the legislature previously used a nominal Anchorage Office Operations appropriation ($100 last year) as a way to make explicit that the legislature did not intend the executive branch to fund more than a token amount for that office.

"Every dollar of operations for the permanent fund corporation is a dollar that doesn't go into the earnings reserve account or count within the 5% of market value of the fund," Representative Story said.

After discussion and several members’ statements defending legislative prerogative, the chair removed his objection and Amendment 1 was adopted by voice vote with no objections recorded.

Representative Story then moved Amendment 2 to remove $34,000 budgeted for the second office lease. Members questioned potential contractual or legal obligations tied to lease terms and whether deleting the funding would create net savings if positions or functions were relocated to Juneau. Representative Vance withdrew his objection after asking the finance staff to review impacts; the committee adopted Amendment 2.

Representative Kerrick moved the FY27 Department of Revenue operating budget from subcommittee with subcommittee narrative and authorized the Legislative Finance Division to make necessary technical or conforming changes. The motion passed with no objections and the subcommittee adjourned at 1:00 p.m.

What’s next: The subcommittee’s report and narrative will be finalized by Legislative Finance staff and the budget proceeds in the committee process.