Facing ongoing fiscal pressure, Alaska lawmakers are poised to pass a capital budget that contains no new funding for individual legislators’ district projects — a stark reflection of the state’s constrained financial outlook.

The state’s 2025 capital budget, which funds infrastructure like schools, roads, and public facilities, is nearing final passage in the Legislature. But for the first time in recent memory, it includes no discretionary funding for district-level construction or renovation initiatives — a common feature in past budgets, especially during times of higher oil revenues or federal aid windfalls.

This year, however, that funding is absent.

“There’s no district money in the budget,” said Sen. Bert Stedman, co-chair of the Senate Finance Committee and a Republican from Sitka. “That’s because there’s no money.”

Alaska’s capital budget is separate from its operating budget, which pays for the day-to-day functioning of state government. The capital budget typically funds tangible projects like public safety buildings, schools, and transportation improvements. But this year, nearly all the available state funds were prioritized for major statewide needs, matching requirements for federal grants, and ongoing maintenance — leaving nothing for new local projects.

Lawmakers said the budget does include a limited number of large-scale, statewide infrastructure and deferred maintenance projects, along with matching funds to secure hundreds of millions in federal dollars from programs like the Bipartisan Infrastructure Law. Still, without flexible funds to allocate to community-level proposals, many districts will go without any capital investment this year.

In previous years, legislators could submit requests for specific local needs, such as a library renovation, road repaving, or school repairs. Those district earmarks were often used to show constituents tangible results. This year, legislators had to tell local officials not to expect any new money.

Sen. Stedman was blunt about the reasons behind the change. “There’s no district money in the budget,” he repeated. “That’s because there’s no money.”

The lack of discretionary funding comes as Alaska grapples with persistent structural deficits, diminished oil revenues, and the looming cost of maintaining essential infrastructure. Despite several years of increased federal funding, much of that money comes with strings attached, requiring state matches or being restricted to specific uses.

Some lawmakers expressed concern that communities will fall further behind on basic infrastructure needs without annual infusions of capital funding. Others warned that the lack of investment could slow economic development and job growth, particularly in rural areas already struggling with limited access to modern facilities.

Meanwhile, the state continues to spend millions annually on maintaining aging infrastructure rather than replacing or upgrading it. Deferred maintenance now accounts for a significant portion of the capital budget.

“There’s frustration, sure,” said one legislative aide. “But unless the revenue picture improves or we rethink how we allocate resources, we’re going to keep seeing tight budgets like this.”

With no new funding headed to communities across the state, local governments may need to lean more heavily on federal grants or raise their own revenues through taxes or bonds — both of which present political and logistical challenges.

For now, the message from the Legislature is clear: Alaska’s construction ambitions will have to wait.

Originally reported by James Brooks in Alaska Beacon.