On June 10, 1986, Gov. Bill Sheffield vetoed multiple state and local projects, cutting an overall $45.2 million from the state’s budget. To keep cuts equal throughout each district of Alaska, Sheffield and staff designated a 20 percent cutting cap per district. Locally, $2.2 million was cut out of Juneau’s budget. Cuts did not include schools or high-priority items and projects.

Despite the slashes to Juneau’s budget, construction at the Juneau airport continued, providing 200 new parking spaces for travellers.

In an attempt to keep their Permanent Fund Dividend checks despite being locked up, five Lemon Creek Correctional Center inmates filed a class-action lawsuit against the Department of Revenue Investigation, the Department of Revenue Commission and the LCCC Superintendent. However, due to the various restrictions on the legal rights of prisoners, the lawsuit could not be considered by the Alaska court system.

While those incarcerated may not receive a PFD, those outside were told to expect an increase. The fund was expected to grow by $1.1 billion in July. Whether the surplus will be going to Alaskan citizens or to the state’s budget deficit had yet to be determined.