Senate Majority Bipartisan Coalition Website

State Senator District E

Senate Majority Leader

 

Senator Cathy Giessel Newsletter

UPDATES



Issues affecting

your family, community and jobs.

February 20, 2025

Dear friends and neighbors,

 

Money Choices

What a title for this week’s newsletter! Not exactly an appealing opener.

But its reality.

 

The 60 people you have sent to Juneau are wrestling with “money choices”. If you think that’s easy, consider the differences of opinion you probably have in your family about “money choices”; its not easy. In fact, they say that a majority of divorces are due to money issues between couples.

 

Our “money choices” are the kind that have to choose between healthcare, education, child safety, road safety, fire response and more. The people affected number over 700,000 – all the residents of Alaska. We are trying to make the wisest decisions possible.

 

See the section below to see what I'm talking about.

 

District E Community Meeting coming up!

More info about time and place below.

 

Items in this Newsletter:

·     Money choices

·     Community meetings

·     Alaska budget challenges this year

·     Executive Order 136

·     Deadline for FY26 appropriations request extended

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

·     Resource Values, Permanent Fund

Money Choices

Pages from the Senate Finance meeting on Feb. 19

To listen/watch the entire meeting, Click Here.



Page 3  - POMV is the money we get from the Permanent Fund Earnings. “Traditional Revenue” is the taxes we receive, almost all of it from oil

The oil price drops in the future forecasts (line 4), and our production of oil eeks up a little. This means less money from oil taxes.

Page 22 - This year’s budget (FY25) deficit is about $140 Million (line 15). This is the budget that runs through June 30, 2025.

 

Next year’s budget (FY26) deficit is about $400 Million (line 15). This budget covers July 1, 2025 through June 31, 2026.

 

Together, funding the rest of this year (FY 25) and funding next year (FY26) has a total of about $540 Million deficit ($140+$400). The Legislature is required by the Alaska Constitution to fund the fully budget. We must find the money to pay for this.

 

These deficits in the budget do not include potential Federal funding suspensions. The new Federal Administration has talked about deleting the Dept of Education, defunding portions of Medicaid, and more. This creates uncertainty for our state fiscal stability.



Why this matters

Alaska needs a new source of revenue. Our traditional dependence on oil taxes to pay our bills doesn’t work anymore. Most of our funds come from the Permanent Fund earnings. Alaskans knew this would happen when they created the Permanent Fund in 1976.

 

“New Revenue” usually makes Alaskans think of personal income taxes. And that is in our future, without question.

 

In the meantime, we continue attempts to reduce spending. Inflation continues. Now the Federal Administration is reducing funding for Alaska, which provides a major chunk of our funds. Reality check: Budget reductions are simply not going to fill the deficits.

 

So how do we pay for education, healthcare, state troopers, forest fire fighters, snow plows, hiking trails?

 

We have an immediate option

By moving about $325 Million into the budget, we reduce the deficit to about $215 Million. That $325 Million could be moved from line 9, FY26 (the PFD spend) into line 1, FY26 (the available money to fund services).

 

Line 11 under FY26 could read: PFD of about $1000/person for all qualified Alaskans.

 

With this move, we could fund education, forest fire fighters, snow plowing, healthcare and all the services that Alaskans depend on.

 

There are 60 people here in Juneau, sent to make these decisions. But its really the people themselves that need to decide what they want to pay for and how.

We want to hear from you!

We will be in Girdwood later that same day!

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...

Governor Executive Order 136: Establishing the

Department of Agriculture

 

Alaska lawmakers scrutinize Dunleavy's plans for new Department of Agriculture. Alaska Public Media

Creating the 13 new Department of Agriculture positions would cost the state some $2.7 million, and the 37 positions slated to move out of DNR would cost another $7.2 million. Boyle said he is not planning to propose corresponding cuts to the existing DNR budget.

 

02/12 - Senate Resources: Establishing a Department of Agriculture

02/13 - Senate Special Committee on Arctic Affairs: Farming in the North: Partnering Research and Industry for Alaska

Current Topics

Alaska child care advocates want subsidies and tax credits caught in legal limbo - and more. Anchorage Daily News

Child care providers and workers have long struggled with low wages, high turnover and meager benefits. Parents have complained of long waitlists and soaring costs at child care centers.

 

Long lines and canceled rentals: Firings bring chaos to national parks. Anchorage Daily News

President Donald Trump’s purge of federal employees is not only upending the lives of National Park Service workers, but is also threatening to harm the visitor experience at national parks across the country. The problems are expected to escalate during the summer season, when more than 100 million Americans and international tourists typically visit the 63 national parks in the United States.

 

Arctic Issues

To safeguard the Arctic, Trump should work with Denmark and Greenland. Atlantic Council

Today, Greenland operates as an autonomous entity within the Kingdom of Denmark, a complex relationship reflecting both shared heritage and evolving geopolitical dynamics. Approximately 17,000 Greenland-born people live in Denmark, while many thousands of Danish-born residents live in Greenland. This extensive personal and familial connection underscores the intertwined histories of the two nations, with centuries of interaction between Inuit and Danes shaping modern Greenlandic society.

 

Economy

Alaska House lawmakers begin hearings on high priority pension bill. Alaska Public Media

"This is structurally so different that it's barely recognizable," he told the House Finance Committee. "It’d be like comparing a rotten apple on an old tree to a robust pear on a living tree — they're both fruit, but it ends there."

(My comment: This proposed retirement program would actually save employers and the state money, as it retains skilled, experience employees.)

 

Alaska beer prices could go up, trade association president worries about aluminum, steel tariff hike. Alaska's News Source

 

'Catastrophic': federal disabilities act in jeopardy has Alaskans concerned. Alaska's News Source

 

Money becomes more precarious. Axios

Money is the bedrock of our capitalist system, but recent moves from the Trump administration have made that foundation feel a bit squishier. When the public loses faith in money objects, that unmoors us and can make things feel dangerously uncertain. Driving the news: When New York City Comptroller Brad Lander checked one of the city's 26 bank accounts on Wednesday, he noticed that $80.5 million had disappeared, clawed back by its sender, FEMA, seemingly on the orders of Elon Musk

 

Which states get more federal money than they send. Axios

Each state's balance of payments reflect how much federal money is distributed there (in the form of programs like Medicaid and SNAP, for example) versus how much money residents and businesses send to the federal government (via income or employment taxes, for instance).

 

Alaska Marine Highway System 'going the wrong direction' on staffing, director says. Anchorage Daily News

The state can’t compete with other employers’ compensation, meaning that many wheelhouse workers leave as soon as they are trained, he said. Pilot positions in Washington state’s ferry system pay 25% more than Alaska does. “We have a lot of employees that tell me, ‘I’m here because I’m tier one or tier two (of the state pension system). If I wasn’t, I wouldn’t be here,’” he said. “That benefit has been an anchor for a lot of our employees.”

 

How a risky state investment in seafood cost Alaskans millions and left a fishing town in crisis. Alaska Beacon

The trustees of Alaska’s Permanent Fund, an $80 billion savings account whose earnings provide residents with annual dividends and help pay for government services, decided to invest more money in companies with ties to Alaska. More than $29 million went to Peter Pan, according to figures provided by the Permanent Fund’s current board chair. The deal ended disastrously last year with the company’s liquidation, hundreds of unpaid creditors and a likely total loss for Alaskans on their investment.

 

Education

State spent $47M on correspondence allotments last year, new report shows. Anchorage Daily News

The state reported that students and their families used $47.2 million during the 2024 fiscal year. Some students are eligible to bank unused allotments for future school years until graduating. Other students use less than the total funding available to them — which ranges from $3,953 to $1,600 per year, depending on the program. Of the expenses aggregated by the state — $26 million, or 55% — were reported as falling into the category of “supplies, materials and media.” Further details on the kinds of supplies, materials and media purchased were not collected by the state.

 

Opinion: The Anchorage school budget deficit is drowning opportunities for students. Anchorage Daily News

Students are the future of Alaska. If we want our state to progress, we need to fund the single most important thing that develops better citizens: education. Investing in our schools is investing in Alaska. It is unjust and illogical for our state to devalue education. These cuts lie in the responsibility of our representatives and legislation. Delving further, this matter ultimately lies in the responsibility of the voters: Alaskans.

 

Health Care

Sen. Stevens holds out hope to address ongoing issue of high rates of Alaska's vaping teens. KMXT

The Kodiak Island Borough School District’s superintendent Cyndy Mika said in an emailed statement of support that, “As educators, our top priority is the health and well-being of our students. Raising the legal age for purchasing and possessing e-cigarettes and cigarettes to 21 through Alaska SB 24 and HB 49 is a critical step in protecting young people from the dangers of nicotine addiction and lifelong health risks. These measures help keep harmful products out of the hands of our youth and reinforce the importance of making healthy choices.”

(My comment: I’m told that the Anchorage School District had to suspend a 1st grader for vaping at school. Folks, vaping is another addictive action that starts a young person down a destructive path. This bill passed last year and was vetoed by the Governor; hard to believe a governor could be so out of touch.)

 

Reducing federal dollars for Medicaid expansion could cut millions from the rolls. Alaska Beacon

One idea under consideration by the U.S. House Ways and Means Committee is to shrink the current 90% federal funding match for states that have expanded Medicaid under the Affordable Care Act. Under the proposal, Congress would reduce the federal match for the expansion population to the percentages states get for the traditional Medicaid population — 50% for the wealthiest states and 77% for the poorest ones.

 

DTap and Tdap Effectiveness in Children. SOA Epidemiology Bulletin

 

Vaccination proved an effective safeguard for kids during Alaska's pertussis spike, report says. Alaska Beacon

The full course of vaccination was about 93% effective in preventing the disease among young children during last years’ dramatic increase in cases, according to a bulletin released by the Alaska Division of Public Health’s epidemiology section. Children who were partially vaccinated had about an 85% protection rate.

 

9 states poised to end coverage for millions if Trump cuts Medicaid funding. Stateline

With Donald Trump’s return to the White House and Republicans taking full control of Congress in 2025, the Affordable Care Act’s Medicaid expansion is back on the chopping block. More than 3 million adults in nine states would be at immediate risk of losing their health coverage should the GOP reduce the extra federal Medicaid funding that’s enabled states to widen eligibility, according to KFF, a health information nonprofit that includes KFF Health News, and the Georgetown University Center for Children and Families. That’s because the states have trigger laws that would swiftly end their Medicaid expansions if federal funding falls.

 

Mapped: Medicaid coverage by state. Axios

About 1 in 5 Americans have Medicaid, ranging from about 11% of people in Utah to 34% in New Mexico, per a KFF analysis.

(My comment: In Alaska, 1 on every 3 people are covered by Medicaid.)

Alaska Oil Resource Values

 

Alaska North Slope crude oil price (2/19/25): $75.16

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 (2/18/25): 481,846 bpd

 

 

Hundreds of millions in funding for Alaska energy projects on hold after Trump executive order. Anchorage Daily News

Hundreds of millions of dollars for new energy projects across Alaska are on hold after an executive order from President Donald Trump froze spending tied to two major Biden-era bills, according to project representatives in the state. The freeze is also putting some people out of work, including dozens in Northwest Alaska where several projects designed to lower the high cost of rural energy have been delayed, they say.

(My comment: Alaskans depend on all forms of energy – hydro, wind, solar, diesel. The question is which is viable and affordable in a particular area of this massive state. Wind and hydro have made Kodiak nearly entirely renewable sources of energy. The same is true of Cordova. This EO from a government that is 4,000 miles away is just plain stupid.)

 

Another LNG proposal. Petroleum News

Harvest Alaska (which is Hilcorp) and Chugach Electric Association announced an agreement with Marathon Petroleum Corp. for Harvest to acquire Marathon's liquefied natural gas export facility near Nikiski on the Kenai Peninsula, to convert the terminal into an LNG import facility.

 

Hilcorp plans 3 wells to bring Sterling gas field back online. Petroleum News

Hilcorp Alaska has plans to bring a nonproducing Kenai Peninsula gas field back into production. The company has applied to the Alaska Oil and Gas Conservation Commission for spacing exceptions to allow it to drill three wells closer than 1,500 feet to a property line where ownership changes in the Sterling gas field east of Kenai.

 

Alaska's electricity supply arrangements, PART 1 OF 3. Petroleum News

There are three distinct situations for electricity supplies in the state: the Alaska Railbelt, Southeast Alaska and remote towns and villages in rural Alaska. In the Alaska Railbelt there are three tightly integrated regions: the Kenai Peninsula; the Anchorage and Matanuska and Susitna valleys; and the Fairbanks region. These regions are linked together by single, low capacity transmission lines.

 

Silver47 finds critical minerals in Alaska. North of 60 Mining News

Silver47 Exploration Corp. Feb. 12 reported that it has discovered a suite of critical minerals alongside the silver, gold, zinc, and copper in the Dry Creek and West Tundra Flat deposit on its Red Mountain project about 60 miles (100 kilometers) south of Fairbanks, Alaska. "The high antimony and gallium content within both existing resource zones shows that there is more value to unlock at Red Mountain as we continue drilling to grow the already impressive polymetallic resource," said Silver47 Vice President of Exploration Alex Walls.

 

Developers put brakes on multiple solar energy projects in Southcentral Alaska, citing cost and federal politics. Anchorage Daily News

Renewable IPP also says it can no longer afford to lead development of two other large solar projects it had been working on, an expansion at an existing farm in Houston, in the Mat-Su, and a new solar farm in Clear, in the Denali Borough.

 

Republican legislators pushing for possible nuclear energy comeback in Maine. Maine Morning Star

Though Maine decommissioned its only nuclear power plant at the turn of the century, Republicans seem to be laying the groundwork for the energy source to make a comeback. In arguments against solar tax credits and other forms of renewable energy, Republican leaders have said the state should be more open to considering nuclear energy as a low-emission power source.

(My Comment: Alaska needs “all of the above”! We need lower cost electrons, whether they come from renewable, hydro, or nuclear.) 

 

Precious Metal Prices

February 12, 2025

Gold - $2951.02

Silver - $32.89

Platinum - $984.72

Palladium - $1003.69

Rhodium - $4650.00

 

Alaska Permanent Fund

website

 

Fund value February 17, 2025 - $82,628,600,000

PFD payout from ERA, Fiscal years 1982-2024: $43.9 Billion

$100 Billion total earnings over lifetime of the Permanent Fund

Senate Committee Meetings

Week of February 17-21

 

Education

Feb 19- Joint Session with the House: Alaska Municipal Leaders Education Priorities

Alaska History

Michael A. Healy was the first person of African descent in the U.S. Coast Guard and the first to command a U.S. government ship. Born into slavery, Healy became a cabin boy, then a merchant seaman and eventually an officer. In 1865 he was commissioned as a third lieutenant by President Abraham Lincoln. Heal began his lengthy service in Alaska waters in 1875. In 1886, he became the commander of the cutter Bear. He earned his reputation as "Hell Roaring Mike" as a stern commander and alcohol user. He and the sailors of Bear rescued 160 sailors from various whaling vessels. At the peak of his career Healy knew Alaska's icy waters better than anyone. Captain Healy passed away on August 30, 1904. In 1999, ninety-five years after his death, the Coast Guard named an icebreaker after him, the USCG Healy.

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