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State Senator District E

Senate Majority Leader

 

Senator Cathy Giessel Newsletter

UPDATES



Issues affecting

your family, community and jobs.

January 9, 2025

Dear friends and neighbors,

 

Photo: My fur children. The Mountain Dog loves the snow and cold. The smaller "Heinz 57" has much less fur; she prefers the hearth in front of the wood stove.

 

Inflation (and why it matters related to Permanent Fund)

My best friend (since we were 3 years old), Emily Melissa May and I would save our pennies and walk down to College Inn, in Fairbanks, to buy candy for a penny, or maybe 5 cents if its an expensive candy bar. My parents bought our 3 bedroom Fairbanks house in 1953 for $20,000.

These prices seem absurd today, when a very small candy bar is over $2, and average Anchorage house price is nearly $400,000, if you can find one!

What happened? - Inflation, the "thief in the night", as Elmer Rasmuson called it.

 

The Permanent Fund loses value because of inflation, just as our savings do unless we put them in some saving mechanism that earns interest that is high enough to make up for inflation losses each year. Therefore, in its present form, the Permanent Fund must have "inflation proofing" money added to the Principal every year.

 

A problem arises when the Legislature fails to put "inflation proofing" money into the Principal. That failure has happened 5 times in the last 10 years. In fact, there should be $1,805,800,000 more money in the Principal today. If money is tight, the Legislature has used the inflation proofing money for other things in the budget. The next section of this newsletter has a summary document; look at page 10 to see inflation proofing.

 

This is a problem that needs fixing to protect the Permanent Fund.

 

Solution: Combine the Earnings Reserve Account (ERA) with the Principal, into one Fund. The ERA is where the inflation proofing money comes from, by an action of the Legislature. Combined into one Fund, the inflation proofing money simply stays in the Fund, rather than having to be put into the Principal by the Legislature from funds in the ERA. This is referred to as "automatic inflation proofing".

 

The "One Fund" would not make any change in the dividend and paying for state services from the 5% POMV that is available for spending now. That process would be retained, just as it is now.

 

The "One Fund" policy is a savings policy that will allow the Fund to be invested to the maximum profit and allow the Fund to grow. As it grows the earnings available to fund dividends and state services will grow.

 

The "One Fund" policy is a spending limit, because Principal funds cannot be spent by the Legislature.

 

This action is being urged by the Permanent Fund Board of Trustees in Trustee Paper #10 that was in last week's newsletter. The next section of this newsletter has a summary document; look at page 10 to see inflation proofing.

 

 

Items in this Newsletter:

·     Permanent Fund Overview and Video

·     Free Legal Services on MLK Day

·     Alaska Economic Trends January 2025

·     ASD Budget Simulator

·     Child Care Funding Assistance Application Portal

·     Current Topics, Stuff I Found Interesting, National Security, Fisheries, Economy, Politics, Healthcare

·     Resource Values, Permanent Fund

Alaska Permanent Fund

An Overview

Click on image for powerpoint slides or here.

You can see that in Fiscal Years (FY) 15, 16, 17, 21, 22 the Legislature failed to appropriate the amount needed to inflation proof the Fund. The bottom right number is the shortfall of value put into the Fund to make up for inflation.

Free Legal Services for Low-Income Alaskans on MLK Day

Anchorage residents can access free legal assistance on Martin Luther King Jr. Day, January 20, 2025. The Alaska Bar Association and its partners will host the event at the Mountain View Girls and Boys Club from Noon to 4 PM.

 

Low-income individuals can receive advice on civil legal matters, including family law, housing, wills, and public benefits. Free shuttle service will be provided between the event and the 56th Avenue Shelter and Hope Center Downtown Soup Kitchen from 1 PM to 4 PM.

 

Learn more and access this vital community resource: https://alaskabar.org/for-our-community/martin-luther-king-day/

Try the ASD Budget Simulator

 

Want to see how the Anchorage School District budget works? Use the ASD Budget Simulator to make your own choices about what to cut, what to add, and where to prioritize. It’s a great way to understand the challenges of balancing the budget.



The simulator is open until Friday, January 10th—don’t miss your chance to try it out.

Application Portal Open: Additional Funding for Child Care Providers

 

The Alaska Division of Public Assistance’s Child Care Program Office (CCPO) launched the application portal for licensed child care providers to apply for $7.5 million in funding on December 27th. The application process closes on January 17th.

 

To be eligible for this funding opportunity, child care providers must have a current child care license issued by the State of Alaska Child Care Program Office (CCPO) or Municipality of Anchorage Child Care Licensing Office. Funding will be determined based on the number of licensed providers who apply and number of enrolled and attending children. 



Applications can be found here or on the Child Care Program Office website under the For Providers link. Complete applications are due no later than 5:00 p.m. January 17, 2025.

Current Topics

2025's big climate reality check. Axios

 

Lead pollution likely caused widespread IQ declines in ancient Rome, new study finds. Science Daily

 

For the passengers of Alaska flight 1282, the terror of the cabin blowout is slow to fade. ADN

 

O-Negative blood critically needed by Blood Bank. Alaska's News Source

O-Positive is the most common blood type, according to the American Red Cross, but O-Negative is the most commonly used blood for transfusions, particularly when the patient’s blood type is not known, and is often used during emergency. “The blood that we collect in Alaska is used in Alaska, and when you donate a unit of blood, you are helping your fellow Alaskan and you are saving another Alaskan’s life,” Scanlon said.

 

 

Arctic Issues

Russia reasserts 'blood right interest' over unclaimed underwater Arctic ridge. Nunatsiaq News

Russia is claiming a “blood right interest” in an underwater ridge that extends from the northern tip of Greenland to Siberia, and is gathering evidence to claim sovereign rights over it at the United Nations.

 

 

National Security

U.S. Department of Defense sounds alarm bells about China's growing presence in Arctic. GCaptain

In the decade since gaining observer status on the Arctic Council in 2013 China has massively expanded its Arctic footprint and has begun to work closely with Russia in its attempt to be seen as an Arctic power. “The PRC’s expanding Arctic engagement has created new opportunities for engagement between the PRC and Russia and has resulted in unprecedented styles of collaboration,” the DoD concludes.

 

China's Arctic Presence Worries U.S. Ahead of Trump's Return. News Week

Diplomats have "strong concerns about PRC behavior in the Arctic, to include the PRC's scientific research in the region—research that could be used for future military operations," Naz Durakoğlu wrote to a bipartisan congressional committee that scrutinizes the activities of the Communist Party of China (CCP). There was "increasing frequency and complexity of PRC activity in the region," creating defense and security challenges for the U.S. as China made increased efforts to garner influence, Durakoğlu, an Assistant Secretary of State in the Bureau of Legislative Affairs, wrote.

(My comment: I have asked for and received authorization for a Special Senate Committee on Arctic Affairs. I intend to dig into this kind of issue, and more, in that committee.)

 

 

Economy

Where we're growing. Axios

 

As Anchorage population shrinks, planners consider scaled-down connector for Seward and Glenn highways. ADN

 

Updated estimate shows Alaska has more people than previously thought. Alaska Beacon

new state population estimate shows Alaska has 741,147 residents, an increase of more than 4,300 people from a figure published last year. While more people moved out of the state than moved into it for a 12th consecutive year, those losses were outweighed by new births within the state. In December, the U.S. Census Bureau published figures that sharply raised the number of estimated international immigrants coming into the United States, including Alaska. 

 

 

Politics

Opinion: Gov. Dunleavy has a choice - continue down his PFD path or work on a long-term solution. ADN

 

GOP dominates states. Axios

 

Dems keep control of Virginia statehouse. Axios

The results could limit Youngkin's conservative agenda for the state, requiring the governor to gain bipartisan support for his legislative vision.

(My comment: Public policy SHOULD have bipartisan, wide, diverse support. That’s what the “public” part means.)

 

 

Energy

A Fairbanks lab is testing a prototype of a new cold climate heat pump. Alaska Public Media

Upfront capital costs remain one of the bigger roadblocks for heat pumps, and after years of growth, global heat pump sales dropped by 3% in 2023.

 

Hilcorp wants to build a Kenai Peninsula natural gas storage facility as a 'buffer' against shortage. ADN

 

Unnamed energy company is negotiating takeover of proposed trans-Alaska gas pipeline. Alaska Beacon

 



Health Care

We're not heading in the right direction: A Q&A with Murkowski on health care. Northern Journal

 

After backlogs, federal judge orders Alaska to speed processing time for food assistance applications. ADN

As of November, there were more than 1,200 initial SNAP applications that had not been processed within 30 days as required, and the average application processing time stood at more than 60 days, according to information provided to the court.

 

Alaskans deserve plan to stem decline in state services. Reporting from Alaska

 

Opinion: The hospital staffing crisis and the importance of Alaska bedside nurses. ADN

Empirical research has shown that a primary driver for nurses leaving the bedside is inadequate staffing and unsafe patient assignments. Hospitals cannot retain nurses who must drown in tasks in order to provide safe care. Nurses cannot morally accept working for an institution that will undermine patient safety to protect its own bottom line.

 

Thousands of Alaskans to see a steep rise in health insurance costs for the third year in a row. Alaska Public Media

More than 20,000 Alaskans get their health insurance through the federal marketplace, and their plans are set to go up by about 17% this year. That follows two years of similar spikes in costs.

Alaska Oil Resource Values

 

Alaska North Slope crude oil price (1/8/25): $74.63

FY24 budget (beginning 7/1) is fully funded at a

forecast of $73/barrel of oil.

Price on 9/30/23: $87.99

Price on 9/30/22: $86.91

Price on 6/29/22: $116.84

Price on 3/08/22: $125.44

Price on 12/22/21: $75.55

ANS production (1/7/25): 494,149 bpd

 

UAF professor proves it was Denali's Fault. Mining News North

This arc-shaped continental-scale fault that can be seen from space stretches some 1,200 miles across Alaska and southern Yukon. On the north side of the fault lies the prolific Tintina Gold Belt; on the south side lies the Wrangellia and other mineral-rich geological terranes carried north by the Pacific Plate and piled upon Alaska millions of years ago.

 

Spot Henry Hub natural gas prices hit a historic low in 2024. EIA

The annual average Henry Hub natural gas spot price in 2024 decreased by 16% from its 2023 average and 68% from its 2022 average, the largest two-year decline on record.

(My comment: Is this the time that a company would invest $40+ Billion into an Alaska gas pipeline project? I’m guessing “no”.)

 

Precious Metal Prices

January 8, 2025

Gold - $2672.26

Silver - $30.34

Platinum - $967.89

Palladium - $962.72

Rhodium - $4725.00

 

Alaska Permanent Fund

website

 

Fund value January 6, 2025 - $81,189,600,000

PFD payout from ERA, Fiscal years 1980-2024: $43.9 Billion

$100 Billion total earnings over lifetime of the Permanent Fund

Feedback is always welcome.

Have a great week!

 

Cathy 

 

Personal Contact:

907.465.4843

sen.cathy.giessel@akleg.gov

 

Past Newsletters on my website



My Staff:

·     Chief of Staff: Jane Conway (from Soldotna)

·     Legislation Aide: Paige Brown (from Anchorage/Girdwood)

·     Resources Committee Staff: Inti Harbison (from Anchorage)

·     Office Manager: Jane Rohr (from Homer)

 

 

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Senator Cathy Giessel's Newsletter | 12701 Ridgewood Rd | Anchorage, AK 99516 US