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State Senator District E

Senate Majority Leader

 

Senator Cathy Giessel Newsletter

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Issues affecting

your family, community and jobs.

 

 

February 13, 2025

 

 

Dear friends and neighbors,

 

My staff and I are all Alaskans who graduated from public school. Four of us graduated from Alaska public schools.

 

Education funding is still front and center. The House and Senate majorities agree on almost all points but are still working to find alignment with the Governor's office.

 

Don’t Let Partisan Politics Stop Us from Helping Children Excel in School. Governing

There’s no question that teachers have been underappreciated in their attempts to help kids rebound and accelerate their learning. We’ve supported improving teacher pay in our states, and Democrats and Republicans can both look for ways to support the heroes who lead our classrooms. We need to ensure they have strong professional development, the opportunity to advance in their careers, time to plan their lessons and work with kids individually, and the high-quality resources they need to do their jobs well.

 

Opinion: Alaskans need to decide what's more important - adequate school funding or a big PFD. Anchorage Daily News

 

Opinion: South Anchorage families, your schools need you now. Anchorage Daily News

 

Opinion: Why Alaska must invest in public education now. Anchorage Daily News

As parents, we chose to raise our families in Alaska because we believed in the promise of a strong public education system. We envisioned our children attending neighborhood schools, surrounded by a supportive community and dedicated teachers. But that promise is now in jeopardy. The continued underfunding of our schools is eroding the very foundation of our communities and jeopardizing our children’s future.

 

Opinion: Alaska public schools deserve our full support while we work to make them better. Anchorage Daily News

 

Opinion: We have to stabilize Alaska schools to ensure economic growth. Anchorage Daily News

 

 

Cook Inlet gas supply for lights and heat of 70% of Alaskans took an interesting turn in the last week, as Chugach decided to go out to the international market to purchase and import gas. They are partnering with Hilcorp who is allegedly lining up to purchase the Marathon export facility.

 

Hilcorp-linked company announces deal to build natural gas import facility on Kenai Peninsula. Alaska Beacon

 

Hilcorp affiliate and Chugach Electric announce proposal to convert facility in Nikiski for LNG imports. Anchorage Daily News

The imported gas could start being received at the Kenai Peninsula facility as early as 2026, with full-scale operation starting in 2028, according to Harvest Alaska. Chugach Electric Association — the state’s largest electric utility — said it is in talks for the potential purchase of imported gas from the plant.

 

The Alaska Gasline Development Corporation (AGDC) presented a study that states that gas from the North Slope, via an $11 billion gas pipeline would be a less expensive alternative. The project studied is a gas ONLY pipeline to supply Alaska demand. There were many costs that the study failed to take into account so there is a question regarding the validity of the conclusion.

At this point, we have invested over $1.1 billion in efforts to build a gas pipeline from the North Slope to Southcentral. So far, we have nothing to show for that expenditure. (I would add that the $1.1 billion doesn't include the wages paid to AGDC staff over the last 10 years.)

The President has indicated an agreement with Japan to purchase Alaska gas from a gas pipeline with an export facility. The cost to build that project is $44 billion, estimated about 8 years ago, so inflation has increased that.

This week the President has also announced a 25% tariff on imported steel, which increases the cost of a gas pipeline by 25% as well.

 

Trump says Japan will 'soon' begin importing LNG from Alaska. But gas exports couldn't happen until 2031, even in the best case. Anchorage Daily News

 

Trump announces Alaska LNG alliance with Japan. Alaska News Source

And that’s if the project can be built at all. Alaska politicians and the project owner, the Alaska Gasline Development Corp., praised the benefit of such a transaction on Friday. But an Alaska oil and gas analyst said the announcement doesn’t change anything for the state’s decades-long attempts to export natural gas from the North Slope to other countries.

 

Non-residents, working in our state, are increasing. Trends magazine (put out monthly by the Dept of Labor and featured every month in this newsletter) identified that the number of nonresident employees is at the highest since 1995 at 23%. We've had 12 years of losing population.

Why does this matter? Non-residents take their paychecks to their homes in other states, where their kids are in schools, they buy goods and food in stores, and support another state's economy. They likely pay an income tax in their home state.

Non-resident workforce:

·     Construction 24%

·     Oil/Gas 37%

·     Seafood 83%

·     Tourism 34%

·     Education 15%

·     State/Local government 9.3%

 

Nonresident hiring in Alaska hits new record, state analysis shows.

 

Items in this Newsletter:

·     Alaska budget challenges this year

·     Current Topics, Stuff I Found Interesting, Arctic Issues, Fisheries, Economy, Education, Politics, Healthcare

·     Resource Values, Permanent Fund

 

 

 

 

 

Budget Challenges This Year

 

The Permanent Fund Investments are now the main source of state funds.

 

Oil provides less than half as much revenue.

 

Why is this important?

The Permanent Fund is being well invested with earnings above benchmarks. However the Fund is complicated by the "side account" called the Earnings Reserve Account (ERA). The ERA was created to hold earnings from the Fund, that can be spent by the Legislature with a simple majority vote.

 

The cash in the ERA is what is used to pay for education, snow removal, state troopers, and all those business services the state provides. The PFD comes out of the ERA money also.

 

Problem: We are spending from the ERA faster than the realized earnings that are going into it.

(Realized earnings are actual cash; contasted with unrealized earnings that are the value of investments that have not been turned into cash by selling them.)

 

This has created a situation that, assuming markets and investments remain stable, the ERA will not have the funds in it by 2029 to pay for state services or fund a PFD.

 

Solution:

We need to merge the ERA into the main Permanent Fund and allow a Percent of Market Value (POMV) of the earnings to come out of the Fund consistently each year. This would provide stable funding for state services and the PFD.

 

Fiscal Plan:

This solution (securing the money in the Permanent Fund) creates:

·     Spending Limit (only the POMV would be available to spend each year)

·     Savings Plan (Permanent Fund will be secure from spending and automatically increased to cover inflation)

 

State lawmakers face tough budget choices as faltering oil revenue turns a surplus into a deficit. Alaska Public Media

Back in December, Gov. Mike Dunleavy proposed his version of the budget. It came with a full, statutory Permanent Fund dividend of about $3,800 per Alaskan. It also came with a $1.5 billion deficit — which, as it happens, is about half of the balance in the state’s primary savings account.

 

Alaska Senate leaders suggest new revenue measures to address looming budget deficit. Anchorage Daily News

 

Alaska legislators say state's fiscal picture is among the worst in decades. Alaska Beacon

“We haven’t addressed revenue for decades,” Sen. Lyman Hoffman, a Bethel Democrat, told reporters. “I think it’s high time the Legislature looks at raising new revenues if we want to accomplish the many things that we want to do. If not, I don’t see a clear path forward to balancing not only this year’s budget, but next year’s budget.”

 

 

The budget year CURRENTLY IN RED

The budget proposed by Governor NEXT YEAR IN BLUE

 

PFD is the first set of bars; Governor wants to double it next year.

Education is the second set of bars: Governor wants to reduce it next year.

Health is next and doesn't change much.

DOC is Dept of Corrections which needs more funding.

Etc...

 

 

Current Topics

Some species of baleen whales avoid attracting killer whales by singing too low to be heard. EurekAlert!

New research from the University of Washington finds some baleen whale species call at such deep frequencies that they’re completely undetectable by killer whales, which cannot hear sounds below 100 hertz. These tend to be the whale species that flee in the face of attack. These deep singers in the “flight” club include blue, fin, sei, Bryde’s and minke whales.

 

Alaska Legislature adopts resolution asking Trump to keep Denali as name of North America's tallest peak. Anchorage Daily News

 

Alaska Legislature formally opposes Trump's renaming of Denali as Mount McKinley. Alaska Public Media

 

Alaska Legislature asks Trump to retain Denali's name instead of change it to Mount McKinley. Associated Press



Alaska Legislature asks Trump and federal officials to keep Denali name. Alaska Beacon

 

Anchorage ordinance could make parents legally responsible if child brings deadly weapon to school. Alaska's News Source

 

Arctic Issues

Greenland caught in resource power struggles. North of 60 Mining News

Long enduring as a land of resilient communities and Arctic majesty, the island has become the focus of global powers vying for control over rare earths, graphite, and other minerals and metals essential to clean energy, defense, and industry. Spanning over 830 million square miles (2.1 million square kilometers), Greenland is the world's largest island, yet its population of roughly 57,000 makes it one of the most sparsely inhabited places on Earth.

 

Economy

Federal job cuts could have an enormous impact in Alaska. Alaska Public Media

“You know, The federal government is our No. 1 industry,” said Neal Fried, a retired state labor economist. “We should be watching this really closely. And it's kind of like, I suspect, the way people in Detroit watch what's happening in the auto industry.” University of Alaska Anchorage Economics Professor Kevin Berry said federal jobs pay well, about 28% more than the average Alaska wage and essentially inject money into Alaska’s economy.

 

Alaska could see outsized impacts from Trump's tariffs, if they all go into effect. Alaska Public Media

Senate Majority Leader Cathy Giessel, R-Anchorage, shares the concern, though there’s not a lot state lawmakers can do about tariffs proposed by the president. Even so, she is drafting a resolution to formally oppose the policy. She says the tariffs would increase prices on a range of goods and necessities — bad news in a state where the cost of living is already exorbitant.

Giessel also emphasized that the tariffs also threaten something else: Alaska’s long-standing relationship with its only neighbor, including as it relates to military defense. She said Canada supports the U.S. Air Force, Navy and Coast Guard when Russian or Chinese aircraft threaten U.S. borders. “These are significant partnerships that are being jeopardized by the proposal of these tariffs,” Giessel added.

 

State claims secrecy for state salary contract, hiding big policy change from legislators. Reporting from Alaska

A more egregious action took place last week when the Dunleavy administration refused to tell legislators and the public what data it asked the salary study contractor to provide last summer.

 

Alaska union sues over state's failure to disclose public employee salary study. Alaska Beacon

 

Union sues Dunleavy administration over delays in the release of a salary study. Anchorage Daily News

 

Dunleavy administration manipulated wage study to keep underpaying workers, lawsuit alleges. The Alaska Memo

 

Union seeks court order to release $1 million buried state salary study. Reporting from Alaska

The Dunleavy administration has so far released only redacted versions of the amendment to the public, obscuring the change from the 65th to the 50th percentile as the benchmark. The union included the unredacted version of the amendment in its court filing. It did not say how it obtained the document.

 

Trade escalation coming today. Axios

The largest sources of U.S. steel imports are Canada, Brazil and Mexico. Canada is the largest U.S. supplier of primary aluminum metal.

 

Alaska's US senators sign letter demanding faster implementation of Social Security benefits expansion. Anchorage Daily News

The bill rescinded two provisions — the Windfall Elimination Provision and the Government Pension Offset — that limit Social Security benefits for recipients who also collect retirement income from state or local government pensions.

 

State to compensate 32,000 public sector workers in Alaska whose retirement contributions were delayed. Anchorage Daily News

The contribution delays have affected thousands of public-sector workers in the state — including those working for school districts, cities and boroughs that rely on a state-run retirement system. It has not affected employees of the Municipality of Anchorage and direct employees of the state.

 

Education

Four Alaska school districts named in legal challenge over use of public funds to pay for private school tuition. Anchorage Daily News

A group of Alaska parents and teachers filed a complaint Thursday naming four school districts, including the state’s two largest, in a lawsuit alleging Alaska’s publicly funded homeschooling program is being used to cover the cost of private school tuition.

 

Alaska college scholarship program sees increased participation after major reforms. Anchorage Daily News

Recipients of the scholarship can use it at 24 institutions in Alaska, including at the University of Alaska, community colleges and technical training centers. The measure boosted each of the performance scholarship’s three award amounts by almost 50%. The top tier increased from $4,755 to $7,000 per year.

Health Care

Why is Alaska healthcare so expensive? Alaska Public Media

PODCAST with former State Medical Officer, Anne Zink, and healthcare economist, Jim Rebitzer.

 

Bills aim to address prescription drug costs, pharmacy closures by regulating PBMs. The Gazette

High prescription drug costs and pharmacies going out of business, especially in rural Iowa, have once again put pharmacy benefit managers — the companies that function as intermediaries between insurance providers and drug manufacturers — under the legislative microscope.

 

Understanding the sings and symptoms of Alzheimer Disease-related agitation. Consultant360

In this video, Kasia Rothenberg, MD, PhD, geriatric psychiatrist at the Cleveland Clinic Lou Ruvo Center for Brain Health, provides a robust overview of Alzheimer disease-related agitation, including detailing the difficulty in testing for Alzheimer disease-related agitation, the challenges caregivers and family members face when reporting symptoms to clinicians, the gaps in our knowledge that remain, and whether either the current FDA-approved treatment for Alzheimer disease-related agitation or other treatment options in the near future can curb the most prevalent symptoms of Alzheimer disease, particularly agitation.

 

 

Alaska Oil Resource Values

 

Alaska North Slope crude oil price (2/12/25): $74.32

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 (2/11/25): 475,000 bpd

 

Alaska mine value climbs to $4.8B in 2024. North of 60 Mining News

Thanks in large part to a surge in gold production value, the U.S. Geological Survey (USGS) calculates that the total value of non-fuel minerals produced in Alaska last year – gold, zinc, silver, lead, and sand and gravel products – at $4.7 billion.

 

Norway gets first ship to carry waste carbon to undersea storage. Energy Connects

The so-called Longship project is due to be the world’s first large-scale carbon capture and storage hub for industrial emissions. Countries across Europe — most notably Germany but also Nordic nations — are betting on CCS to clean up polluting sectors such as cement, fertilizers and steel. Yet the technology is complex and costly, and remains largely at the demonstration phase.

 

Trump says he will impose 25% steel and aluminum tariffs, and more import duties are coming. Anchorage Daily News

(My Comment: Bear in mind that Canada is the largest U.S. supplier of primary aluminum metal. How does this make sense?)

 

Gold makes some gaudy gains. Axios

Gold futures hit another record high this week, breaking $2,900 for the first time, as tariff fears fuel a flight to what Bloomberg calls "the everything hedge."

 

Precious Metal Prices

February 12, 2025

Gold - $2916.19

Silver - $32.42

Platinum - $1008.96

Palladium - $1010.11

Rhodium - $4625.00

 

Alaska Permanent Fund

website

 

Fund value February 03, 2025 - $79,621,800,000

PFD payout from ERA, Fiscal years 1982-2024: $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)

 

Copyright © 2025. All Rights Reserved.

 

 

 

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