Senate Majority Coalition Website

State Senator District E

Senate Majority Leader

Senator Cathy Giessel Newsletter

UPDATES

Issues affecting

your family, community and jobs.

January 25, 2024

Dear Friends and Neighbors,

Its snowing in Juneau. Wet, heavy, lots of feet of snow. Road clearing is an issue. Anchorage is familiar with this scenario!

The deadline to submit capital projects for consideration in CAPSIS (Capital Project Submission and Information System) is Friday, February 16 at 5:00 pm. To submit district spending requests for the FY25 capital budget, communities must have a CAPSIS account setup in the Legislative Finance Division's system. Please contact my staff, Julia O’Connor at 465-5078, to help you through the process.

Items in this Newsletter:

· Legislative Analyst's Overview of Gov.'s Budget

· Legislative Audit Released Reports

· DOT Snow Removal Information

· Alaska Upcoming Health Fairs

· Youth Employment in Parks 2024

· Senate Committee Meetings

· Current Topics: Education, Economy, Minerals,

Health Care, Politics

· Resource Values, Permanent Fund

· Alaska History

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Past Newsletters

Senate Finance Committee

Overview: FY25 Budget by Legislative Finance Division

Watch the meeting here, see the presentation slides here.

Slides to notice:

· Slide 6 - shows how the 5% Percent of Market Value calculation works to determine withdrawal from the Earnings Reserve Account (ERA).

· Slide 7 - shows the projection for the funds in the ERA and why it is at risk of "running out" of money

· Slide 14 - shows the breakeven point in oil price for current budget and how surplus in revenue might occur.

· Slide 16 - explains how the budget begins

· Slide 22 - chart showing current year budget (red) and the Governor's proposed budget in an easy to read graph.

· Slides 28, 29, 31, 32, 33 - all show different spending scenarios and what it will cost.

SB 88- Defined Benefit - A Hybrid System

In 2006 Alaska closed the Defined Benefit Pension. The actuary working for the State made a significant error in calculating the amount needed to be contributed to the Pension Fund. This error was discovered but repeated the following year. This, combined with rising healthcare costs, caused the otherwise well-funded Pension Fund to plummet.

(The State of Alaska sued the Actuary, Mercer, for damages, not only for the error but the fact that Mercer attempted to cover up the error. It was discovered when the State hired another actuary to audit the Pension Fund. The State recovered only $ from the Courts. The error cost the State $.)

The Defined Benefit Pension Fund feel from being over 100% funded to only 66% funded by 2005. The Legislature entertained the idea of converting to a Defined Contribution System (401K-like), rather than a pension. This would put each employee on their own to invest as they wished; all the risk of success or failure would be born by the employee.

There was much debate. Many legislators, like former Representative Mike Hawker (a CPA by profession) urged the Legislature to not panic and abandon the Pension. But, in a close vote, the Defined Benefit passed the Legislature and went into effect.

A few staff and at least one Senator was so confident that the 401-K idea was a good one that they pulled their value out of the Pension and put it into the Defined Contribution. They quickly came to regret that decision.

Today Alaska is unable to attract and keep long term public employees. While the public employee wages are low, there is no pension to make up for that. In the Defined Benefit system, an employee is vested at 5 years of service. That means that they can withdraw the money that they have contributed from each paycheck, and the money that their employer put into their account each paycheck. They not only removed their money from the 401-K, they leave public employment, taking their very costly training and experience with them.

This can be seen in data from the Alaska Retirement Management Board (ARMB). Their reports show that, on average, $12.4 Million per month is being withdrawn by employees leaving public service. Studies show that this money either leaves Alaska or is spent on mortgage payments, healthcare, children's needs, etc; its generally not saved for retirement.

We also know that for the past 11 years Alaska has lost population. That alone may not be striking but the majority of folks leaving are age 18-64 years old - working age. The Census data shows us that they are moving to Washington. Oregon, California, Arizona and Colorado. These states all have Defined Benefit Pensions.

Fifty percent (50% of people born here will be gone in 20 years (when they reach working age). One third (1/3) of high school graduates who leave Alaska, don't come back.

Many State employees do not participate in Social Security. (See next section for that history.) That means, when they retire with a Defined Contribution plan, and no social security, they have a very finite amount of money to live on. They will have to guess how long they will live, how much they need to spend each month, and try to make ends meet.

These folks are set up for retirement poverty.

SB 88 is not a return to the previous Defined Benefit System which was very generous, particularly in healthcare coverage.

SB 88 is a modest pension, covering all public employees and teachers, with no healthcare coverage until Medicare age. There is no Cost of Living Allowance (COLA); there is only a Post Retirement Pension Adjustment (PRPA) that increases pension payments in accordance with inflation. But only folks who stay in Alaska will get the full PRPA; if retirees move out of Alaska, they only receive 50% of the PRPA.

SB 88 requires the Defined Benefit Fund to remain 90% funded. If it falls below 90%, the employers, employees and retirees all will increase their contributions to the Fund to keep it solvent. The Alaska Retirement Management Board (ARMB) will oversee the Fund balances, as it does now. The ARMB employs an Actuary who reports every year, and every 3rd year a second Actuary reviews the first Actuary's work to be sure it is accurate.

Vesting in the Pension is 5 years, with the 5 highest salary years determining the final average salary calculation. It has the same disability and death benefits as presently.

Current employees will be able to choose to switch from the current Defined Contribution (401K-like) to the Defined Benefit. New employees would automatically be put in the Defined Benefit system.

SB 88 was heard in Senate Finance today and passed out of that committee. Next stop is the Senate floor for a vote.

SB140- Broadband Internet for Schools

Rep. Craig Johnson of Anchorage recently introduced a new version of Senate Bill 140, radically altering what had been a bipartisan bill to restore education funding and modernize broadband in schools.

The changes proposed by Rep. Johnson include:

• Slashing the already-inadequate BSA increase of $680 to $300 per student.

The $680 increase represented an annual investment of about $175 million. Johnson’s proposal cut this by 56% to about $77 million. The Alaska Association of School Boards has recently called for an increase of $1,413 per student.

• Allowing the Alaska Board of Education to bypass locally-elected school boards and approve de facto voucher programs whose lack of oversight could allow public money to be spent illegally on religious education.

This is just the latest attempt by some anti-public education ideologues to defund public education and illegally shift money into private religious schools in violation of the Alaska State Constitution.

In April 2023, the Anchorage School District revoked the charter of the Family Partnership Charter for, among other things, when “ASD learned that curriculum that was religious in nature was among the curriculum purchased with public dollars.”

Jodi Taylor, the wife of Alaska Attorney General Treg Taylor, stated: “There is an opportunity — which has been hiding from public view — for families to use their children’s education allotment funded through the state’s Base Student Allocation for classes at private schools, in addition to other educational options.” She went on to detail how she planned to use Anchorage School District’s Family Partnership to reimburse her children’s attendance at St.

Elizabeth Anne Seton, an Anchorage religious private school.

Because the Anchorage School District and the new Superintendent Jharett Bryantt had the courage to stop the unconstitutional diversion of public funds to private and religious schools, now Education Commissioner Deena Bishop and Rep.

Johnson are leading the charge to change state law and permanently disfigure the way we do public education in Alaska for their voucher scheme.

In her column, Ms. Taylor praised efforts to change state law to allow money to flow to private and religious institutions in 2014. Diverting public funds to private and religious schools is explicitly prohibited by the Alaska State Constitution. Yet that is precisely what Johnson’s Rules Committee bill would do.

Rather than try to undermine public schools with unconstitutional vouchers, the Legislature should get back on the bipartisan track it was on with SB 140.

Restoring education funding that has been cut over the last decade and modernizing school internet infrastructure is the right thing to do.

I am a 58-year resident of Alaska, a retired 28-year public school teacher, and I am hoping the full House of Representatives restores the intent of SB 140 to support Alaska public schools.

— Marilyn Pillifant

Alaska House unveils education package stacked with Republican priorities. ADN

House Republicans on Wednesday unveiled a package of education-related legislation that they framed as their response to growing calls to increase education funding. Educators say the proposal falls short of what is needed to account for inflation.

(My Comment: The additions tagged onto the broadband bill provide absurdly small increase funding for education and tacks on programs that have not been vetted for cost or effectiveness.)

Education bill passes House Rules Committee after 7-hour, highly-debated public hearing. Alaska's News Source

In what turned into a nearly seven hour debate, which included community educators, parents, and students from across Alaska making passionate pleas, the Alaska House Rules Committee unanimously passed a wide-sweeping education proposal to a full House floor vote, with much of the back-and-forth revolving around a proposal to overhaul how local school boards would make charter school decisions.

House Rules Committee loads up Senate school internet bill. Alaska Landmine

After accounting for the $20 million in broadband subsidies, this is roughly the same amount as the $174 million cost of the $680 BSA increase passed by the Legislature last year. So, rather than reduce the cost of the bill passed by the House Finance Committee, the rules committee instead has reprioritized that funding from public school districts to private schools through the correspondence program and lump sum bonuses paid directly to teachers.

Lawmakers start legislative session outlining education and energy priorities. Alaska's News Source

The bill is a funding source for internet services for school districts but contains a provision that would increase the BSA from $5,960 to $6,640, an increase of $680. Rules Committee Chair Rep. Craig Johnson said majority members are looking to amend the bill and lower the BSA increase to around $300.

Alaska House Republicans accused of rushing unvetted education bill. ADN

(My comment: The statement made at the end of the Saturday hearing was “Let the games begin.” This is not a game; the Senate is not playing games. Education is a serious responsibility contained in our Constitution.)

House committee advances education bill with only $300 BSA increase. Radia Kenai

Why do we have a better funding plan for Alaska's prisons than its schools? ADN

Alaska's priorities must change. ADN

Lawmakers at odds over wide-sweeping education package; House vote up next week. Alaska's News Source

Senate President Gary Stevens, R-Kodiak, said the Senate sent the proposed bill to the House last year. At the time, the bill’s scope was much more limited and centered on internet funding for Alaska’s schools. Senate President Gary Stevens, R-Kodiak, said the Senate sent the proposed bill to the House last year. At the time, the bill’s scope was much more limited and centered on internet funding for Alaska’s schools.

Wide-ranging Alaska House education bill would boost school funding but faces uncertain future. Alaska Public Media

Substantial increases to the base student allocation have eluded lawmakers in recent years. The 2022 Alaska Reads Act increased the base student allocation by $30, about half a percent. But aside from that, per-student funding has stayed flat since 2017. It’s now $5,960 per student.

Charter school teacher, lawmaker react to SB 140. Alaska's News Source

Alaska House and Senate sharply divided over school funding plans. ADN

AMHS Summer Ferry Schedule Now Available For Bookings

(JUNEAU, Alaska)—The AMHS 2024 summer Schedule is now available for reservations.

"We're pleased to announce the release of the 2024 summer schedule. Our focus remains on restoring service and reinvesting in the AMHS system and our hardworking employees," shared Ryan Anderson, Commissioner at DOT&PF. "Thank you for your feedback and ongoing support."

The summer schedule was designed to accommodate coastal communities’ special events to the greatest extent practicable. The department will also contract supplemental service if needed to cover service disruptions.

To review the updated AMHS summer schedule check here.

To make reservations for travel on AMHS please call (800) 642-0066 or visit: https://bookamhs.alaska.gov/book/sailing-search/journeySearch/

For additional information about the Alaska Marine Highway System, please visit http://ferryalaska.com

The Alaska Department of Transportation and Public Facilities oversees 237 airports, 9 ferries serving 35 communities along 3,500 marine miles, over 5,600 miles of highway and 839 public facilities throughout the state of Alaska. The mission of the department is to “Keep Alaska Moving through service and infrastructure.”

The free clinics aim to serve 300+ patients per day and assist more than 1,200 Alaskans. They will be hosted by the Mountain View Lions Club, in partnership with internationally acclaimed nonprofit Remote Area Medical (RAM).

Healthcare volunteer opportunities are available for:

· Nurses

· Medical Techs

· Lab Techs

· Vision Techs

· Opticians

· Healthcare professionals

· Dental professionals

· Vision professionals

· Counseling professionals

· Mental health professionals

· Tertiary care resources

In addition, the clinics are seeking community members to assist with event set-up, teardown, volunteer food management and to greet/register patients. The more local members who help, the more care we can provide!

Volunteers are needed Friday from 10am-6pm, Saturday 5am-6pm, and Sunday 5am to 6pm each weekend. Clinicians can come at 6am to 3pm on Saturday and Sunday.

Meals will be provided, free volunteer t-shirts to keep, and we can provide certified volunteer hours to those who request it (military, nursing, clinicians, cadets, etc)!

Interested in volunteering? Sign up online today!

Questions? Contact Patrick Campaign, OD at 206-580-3307 or alaskahealthclinic@gmail.com.

Senate Committee Meetings

Week of January 18-24

Finance

Jan 18- Overview: Revenue Forecast by Alaska Department of Revenue

Jan 19- Overview: Savings, Reserves, & Investments by Department of Revenue

Jan 22- SB 186: APPROP: Operating Budget; Cap; Supp; AM, SB 187: Approp: Cap; Reapprop

Jan 23- SB 186: APPROP: Operating Budget; Cap; Supp; AM, SB 187: Approp: Cap; Reapprop

Jan 23- SB 88: Retirement Systems; Defined Benefit Opt.

Jan 24- Overview: FY25 Budget Overview by Legislative Finance Division

Jan 24- SB 127: Taxation: Vehicle Rentals, Subpoenas, Bills Previously Heard/ Scheduled

Community and Regional Affairs

Jan 25- Bills Previously Heard/ Scheduled

Education

Jan 22- Presentation: Alaska Read Act Update by Alaska Department of Education and Early Development

Jan 24- SB 192: Screening/ Reading Intervention K-3 Invited Testimony, Presentation: Alaska Native Language Literacy Update

Health and Social Services

Jan 18- Department of Health- Departmental Update

Jan 23- SB 115: Physician Assistant Scope of Practice- Invited and Public Testimony

Judiciary

Jan 19- HB 28: Access to Marijuana Conviction Records- Invited and Public Testimony

Jan 22- SB 60: Repeal Workers' Comp Appeals Commission- Invited and Public Testimony

Jan 24- SB 100: Access to Marijuana Conviction Records- Invited and Public Testimony

Labor and Commerce

Jan 22- SB 182: Extend Big Game Comm Services Board- Invited and Public Testimony

Jan 24- Presentation: UAA Workforce Solutions for Alaska, SB 173: Authorize Handguns School Employee/ Volunt.- Invited and Public Testimony

Resources

Jan 19- Presentation: Alaska Center for Energy and Power: Railbelt Decarbonization Project Results

Jan 22- SB 69: Geothermal Resources- Invited Testimony

Jan 24- HB 125: Trapping Cabins on State Land- Invited Testimony

State Affairs

Jan 23- Overview: State Affairs Expectation, SB 117: Regulation of Fireworks- Invited and Public Testimony

Transportation

Jan 23- SB 141: Naing Raymond & Esther Conquest Bridge- Invited Testimony, SB 129: Matt Glover Bike Path- Public Testimony

Current Topics

Alaska travelers encounter widespread flight cancellations; Alaska Airlines CEO says expect at least 110 each day. Alaska's News Source

Travelers can expect to see significantly fewer Alaska Airlines flight options while a significant chunk of the airline’s fleet remains grounded.

New programs aim to help more mentally ill Alaskans become competent to stand trial. Alaska Public Media

Alaska’s only state-run psychiatric hospital plans to launch two new programs this month for people without the mental capacity to stand trial. The programs are one-year pilots and will triple the Alaska Psychiatric Institute’s capacity to provide “restoration services” for people facing criminal charges.

Chugach Electric substation rebuild draws the ire of South Anchorage community members. Alaska's News Source

The rebuild of Chugach Electric’s aging southside substation would significantly change the views of a four-way stop in South Anchorage, according to residents of the Bayshore-Klatt Community Council.

Kroger/Albertsons merger would lead to Alaska store closures, reduced competition, higher prices. Dermot Cole Reporting from Alaska

Education

Education funding dominates first day of 2024 Alaska legislative session. Alaska Public Media

Debates over education funding dominated as lawmakers gathered in Juneau Tuesday for the start of this year’s legislative session. Senate President Gary Stevens (R-Kodiak) said a boost to the base per-student funding known as the base student allocation, or BSA, was the top priority for his caucus. “We took the lead on funding education and certainly support a BSA increase,” Stevens told reporters. “But right at this point, you know, we’re awaiting to hear from the House what their plans are.”

Alaska board of education lowers standard for student scores, citing nationally high bar. Alaska Beacon

The Alaska board of education approved lowering the test score standard for student proficiency, after school leaders cited the state’s nationally high bar.

Alaska board of education sends the plan for tribally run public schools to lawmakers. Alaska Beacon

A report detailing the framework for tribally run public schools will be sent to the legislators and the governor’s office. The intent is that it could become a bill that would create the first tribal compact public schools in the state.

We're counting on legislators to do right by Alaska's students. ADN

We adamantly oppose the new section giving the State Board of Education the ability to authorize charter schools within a district. This state overreach would undermine local control of school districts, a principle backed by state statute.

(My comment: Alaska Constitution, Article 10, section 2: “All local government powers shall be vested in boroughs and cities. The State may delegate taxing powers to organized boroughs and cities only.”

I suggest that this new power given to the State Board of Education violates this local control provision. )

Alaska charter school performance deserves serious study. Dermot Cole Reporting from Alaska

Most of the charter schools have a specific academic focus, which is critical to setting goals and expectations for the families, teachers and students.

(My comment: I’m a fan of charter schools, home schools, private schools, public schools. Education in Alaska has all these options. They all need to be

available. Our Constitution is very clear about the financial responsibility to

fund public education, available to everyone.)

ASD short 140 teachers, 400 staff altogether, according to district's HR department. Alaska's News Source

Economy

Alaska's working population loss casts long shadow over legislative session. Alaska Beacon

“If we have aspirations to build an in-state gas pipeline, to amp up and modernize our transmission lines, to improve our education outcomes, it means that we need to have qualified workforce here,” Giessel said. “These are the folks that are leaving, that are being recruited to other states.”

“ It’s just interesting this year how, regardless of whether it’s cost of living, energy costs, schools, everybody’s bringing up that population loss,” said Rep. Will Stapp, R-Fairbanks.

Women rule real estate. Axios

Alaska, North Dakota and South Dakota are the only states where single men own a larger share of homes than women.

Politics

Measure limiting Alaska campaign cash fails to get enough signatures for 2024 vote. Alaska Beacon

Backers of a new ballot measure proposing limits on donations to political candidates failed to make the cutoff for this year’s elections.

Lawmakers take a look at oil forecast and ranked choice voting in second day of session. Alaska's News Source

The Department of Natural Resources leaders delivered mixed news to members of the committee.

Alaska House committee advances legislation to repeal ranked choice voting. ADN

The committee voted to advance the bill in a 5-2 vote, with all five Republicans in favor and the committee’s two Democrats opposed. The measure heads next to the House Finance Committee.

Ranked choice foes are trying to blame other for their losses. ADN

Several campaign losers and their supporters blame their defeat on ranked choice voting, which took effect for the 2022 elections after the public voted in favor of the change in 2020.

Alaska lawmakers fail to override Gov. Dunleavy's education funding veto. ADN

The Alaska Legislature failed to muster enough support to override the governor’s veto of extra school funding approved by the Legislature last year.

(My Comment: This ADN article contains the tally of how each legislator voted.)

Gov. Dunleavy's veto of some education funds stands after joint session vote. Alaska's News Source

Gov. Mike Dunleavy’s veto of additional education funding last year will stand following a 33-26 vote during Thursday night’s joint session in the House chambers.

Alaska Legislature fails to override $87 million education funding veto. Alaska Beacon

The Alaska Legislature failed on Thursday to override Gov. Mike Dunleavy’s veto of $87 million in bonus public school funding last year and likely set a precedent for the way future legislatures consider veto overrides.

Lawmakers call for FDA overhaul on 'gas station heroin'. USA Today

Tianeptine is a supplement used in Europe to treat people who respond poorly to selective serotonin reuptake inhibitors or SSRIs, which are the most commonly prescribed medications for depression. SSRIs and include brands like Zoloft, Prozac, Celexa and Lexapro.

AG Taylor's family advertised plan to get $8,000 private school tuition subsidy; Deputy AG says it's unconstitutional to get state funds to cover most or all private tuition. Dermot Cole Reporting from Alaska

Health Care

Health Commissioner: Alaska on pace to eliminate SNAP backlog by end of February. Alaska's News Source

Alaska Department of Health’s top official on Thursday provided lawmakers with an update on her department’s effort to clear the SNAP application backlog.

Anchorage middle school cancels some activities due to suspected case of mumps. ADN

A suspected case of mumps caused an Anchorage middle school to cancel extracurricular activities for the day and to disinfect its facility and buses as “a necessary step of caution,” according to a message sent out to families Thursday morning.

(My comment: The complications of Mumps are particularly hard on adults. See more here: Mumps Complications | CDC Vaccination has made this highly contagious disease a rare occurrence.)

Alaska Oil Resource Values

Alaska North Slope crude oil price (1/24/24): $80.79

FY24 budget (beginning 7/1) is fully funded at forecast $73/barrel oil.

Price on 9/30/23: $87.99

Price on 9/30/22: $86.91

Price on 6/29/22: $116.84

Price on 3/8/22: $125.44

Price on 12/22/21: $75.55

ANS production (1/23/24): 475,688 bpd

State and federal agencies respond to spill of light oil on North Slope. ADN

Oil's furious stasis and more petro-notes. Axios

Countervailing forces are battling to a draw in oil markets. Since late 2023 and well into the new year, prices have traded within a rather narrow range, despite fluctuating risks of escalation of the Israel-Hamas war. Early Wednesday, Brent crude hovered around $76 per barrel.

Report: Alaska's Railbelt can shift to renewables, but that would require big capital investment. Alaska Beacon

“ Transmission is really a key enabler for all of these portfolios,” Stenclik told the committee. Battery storage is another “key enabler,” and something that would prevent interruptions or blackouts, he said.

(My comment: Transmission upgrade/modernization is key. Clean energy is the source we need to be looking to; that is far broader than just limited to “renewable” energy.)

Precious Metal Prices

Jan. 24, 2024

Gold - $2026.98

Silver - $22.89

Platinum - $917.79

Palladium - $1008.00

Alaska Permanent Fund

website

Fund value January 24 - $78,223,000,000

PFD payout from ERA, Fiscal years 1980-2024: $29.7 Billion

Cost of PFD in Oct. 2022: $2.2 B

Cost of PFD Oct. 6, 2023: $881.5 Million