A governor who spent two terms cutting state services to preserve Alaska's oil-funded annual checks is leaving office. Voters face a choice that could end the state's decades-long 'petrostate' model. Alaska's fiscal crisis stems from a 1968 oil discovery that created a sovereign wealth fund and abolished income tax, funding universal dividends and services.

But falling production and volatile prices now strain this system. Gov. Mike Dunleavy, who slashed budgets to protect the $1,370 average dividend, has one of the lowest approval ratings.

His exit coincides with a Senate race against former Rep. Mary Peltola, creating a pivotal political season. The state faces a $10-$12 million annual budget gap next year, with local governments 'semi-functioning' and reserves needed for Mendenhall Glacier flooding.

Dunleavy's successor must decide between preserving dividends or overhauling the oil-dependent structure.