Senate Majority Bipartisan Coalition Website

State Senator District E

Senate Majority Leader

 

Senator Cathy Giessel Newsletter

UPDATES



Issues affecting

your family, community and jobs.

April 3, 2025

Day 73 of the 121 day session

Dear friends and neighbors,

 

"All Public Policy is Math."

 

Oil execs vent on tariffs. Axios

'Drill, baby, drill' is ... a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal," said one exec who was quoted anonymously. "Uncertainty around tariffs and trade policy continues to negatively impact our business, both for mid- to long-term planning and near-term costs," said another.

(My Comment: Drill more but keep price at $50/barrel doesn't work economically. Another common populist statement - "grow the private sector" to solve our budget issues. I agree that growth in the private sector (non-government businesses, small businesses) drives our economy. But the private sector depends on a functional government! We work together to build our state...at least we should be working together. This means functional public education, effective transportation infrastructure, and well-staffed public safety.)

 

Key Economic Trends in 2025

Presentation in Senate Finance, April 2, 2025. You can find the recording here and the slides here.

Dan Robinson, Research Chief in Dept of Labor

·     Housing - Slide 6 (new homes often have material shortages delaying construction, as well as increased labor costs)

Slide 7 (earners required to afford home; interesting graph)

Slide 8 (Alaska rental prices are less than US average!)

·     Oil/Gas Slide 12 (interesting wages)

Slide 13 (Oil/Gas has 37.4% nonresident workers)

·     Seafood Slide 20 (falling number of jobs)

Slide 21 (82.8% seafood employees are nonresidents)

·     Tourism Slide 23 (booming cruise ship visitors)

Slide 25 (34% nonresident tourism workforce)

·     Mining Slide 27 (steady growth in this industry)

Slide 28 (41.6% nonresident workforce)

·     Construction Slide 30 (growth from Willow/Pikka oil fields)

Slide 31 (20.9% nonresident construction workforce)

·     Government Slide 33 (all segments have reduced)

Slide 34 (follows oil prices)

Slide 37 (Alaska GDP compared to US shows how volatile Alaska's economy is)

·     Negative Net Migration Slide 38 (higher outmigration; newcomers are staying less long than they used to; seniors beginning to leave in higher numbers than before; states with population gains: FL, TX, AZ, mountain west states - working age people moving to these states)



Resources Committee

We have been doing a deep dive into Alaska Fisheries and the decline in fish prices, crippling one of our large industries.

The Joint Legislative Task Force Evaluating Alaska Seafood Industry report is here. Out of that report recommendations comes two bills related to tax incentives and fish tax revenue sharing with municipalities.

 

The Legislature is reviewing a resolution supporting the alliance between Alaska and Canada, our shared values with our Arctic neighbor, and shared economy & resources. HJR 11 can be found here.

 

Food security is important! We realized, during COVID, that if our port in Anchorage shut down, we would not have food supplies lasting very long. A Department of Agriculture in state government could more effectively promote food production. SB 128 would do just that. We are debating what, besides actual farms, might fall under this department, for example mariculture.

 

The budget deficits that we are facing have reached the critical point. Its well past time to take action. Since 1980, when our personal income tax was repealed, corporations that form a "S-corporations, Limited Liability Corporations, and partnerships" have been outside our tax structure. That's because their taxes are paid by the owners of these small entities. Except that these "small entities" have grown to be very large. One or two of them are major oil & gas producing companies.

SB 92 would apply a corporate tax to this category of corporations that would be the same as is paid by "C-corporations" like Exxon, Conoco, and Santos.

Recent public polling found that nearly 78% of Alaskans support this update to our business tax structure. The Dept of Revenue estimates revenues of $185 million to $110 million annually in the first 5 years.

 

Letter: Lawmakers need to correct flaw in tax law. Anchorage Daily News

Hilcorp is an S corporation whereas the other primary producers are C corporations, and as such the latter pay corporate income taxes. This flaw must be corrected. Hilcorp should pay its fair share.

 

Personal Income Tax is a frequent question. No personal income tax bill is being offered at this time. Some facts about such a bill: 60 full time & part time employees would be needed; takes 2 years to fully implement; cost $7-8 Million/year to administer; revenue generated estimated at $320 Million/year; only about 50% of Alaskans would have a tax liability; about 86,000 non-Alaska residents work in Alaska and would pay the income tax as well (2022 data).

 

See you on April 5 (this Saturday) at the very large Town Hall meeting. These town halls are listening sessions at which you can voice your opinions on the many topics we are deliberating.

 

District E Town Hall in May

Rep. Holland (District 9), Rep. Kopp (District 10) and I (Senate E) are putting together plans for another one of our own Town Hall meetings on May 3. More details to come!

Items in this Newsletter:

·     Budget Challenges

·     Wildfire Mitigation

·     Alaska Common Ground

·     Women's History Month

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

·     Resource Values, Permanent Fund

BUDGET CHALLENGES

 

There will be only a bare bones Capital Budget this year. The Senate is shaving off $251.5 million from the Governor's Capital Budget, reducing it to $2.8 billion.

 

There continues to be debate about the amount for education funding and the PFD.

 

History of PFD amounts.

The first PFD in 1982 was $1000. The second PFD was $386.15.

The PFD amount was not $1000 again until 1996 when it was $1130.68.

To see the variability in the PFD over the years check out this chart by the Dept. of Revenue. The total amount distributed over the years is roughly $31.3B.

 

Cut the Budget - adjusted for inflation

FY 2016 through FY 2026 (proposed budget) the total state spending has reduced 25%.

 

The spending on the PFD, however, has increased 42%.

 

"Fiscal Plan"

·     All budgets are required to be balanced.

·     There is very limited money to spend, most of it coming from the earning of the Permanent Fund.

·     Spending Limit is the Percent of Market Value that can be spent from the Permanent Fund Earnings.

·     There are no state taxes on personal income of Alaskans.

 

The chart below shows the amount of the dividend given each year in dollars of the day. Note the red bars are when the dollar amount is decreasing from the previous year.

Wildfire Mitigation

Alaska Common Ground

Takeaways from Protecting the Permanent Fund Event

On January 7, 2025, Alaska Common Ground with co-hosts Institute of the North and Commonwealth North held a free in-person and live streamed event at 49th State Brewing in Anchorage to highlight and discuss a proposed change to management of the Alaska Permanent Fund (APF). Our guest panelists included: Deven Mitchell, CEO and Executive Director of the APF Corporation; Steve Rieger, Former State Senator and former APF Corporation Trustee; Penny Gage, Alaskan Advocate; and Senator Cathy Giessel, State Senate Majority Leader.

Today, the State of Alaska receives much less revenue from oil and mineral development than in the past. The APF is now the primary source of funds for the operation of State government, capital projects, and the PFD. But the current structure of the APF creates a risk that insufficient funds will be available in any given year to pay for these things, which would result in an immediate fiscal crisis for the State and a host of negative repercussions for Alaskans.

For more than 20 years, the trustees of the APF Corporation have recommended making specific management changes to avoid this risk, and to modernize the APF into a “Rules-based Permanent Endowment.” The recommendation is to consolidate the APF’s two-account structure into one and to constitutionally limit the annual draw to five percent of market value (POMV) of the Fund. The trustees can recommend these changes, but it takes action by the Alaska Legislature to make them, and it takes a vote of the people to amend the state constitution.

Current update: Resolutions (HJR 10 / SJR 14) have recently been introduced in the current legislative session in both the House and Senate to change management of the APF as recommended by the APFC Trustees. This important issue deserves the time and attention of all Alaskans and we encourage you to watch our panel presentation to learn more. ACG is planning a follow-up session on this important topic later in the year.

Watch the discussion here.



Proposed Changes to Judicial Selection Process

Alaska Common Ground hosted Alaskans for Fair Courts back in September of 2024 for a discussion about Alaska’s robust judicial selection and retention system laid out in our Constitution and recognized as the gold standard around the country. They described the detailed process conducted by the Alaska Judicial Council, and how it aims to ensure quality judges are placed and retained based on their performance, ethics, and ability to follow the law - not on political grounds as is the case in many states. They also highlighted the importance of voters understanding this process and voting on the retention of judges, a section of the ballot that many of us leave blank.

Current update: Governor Dunleavy recently introduced legislation (HJR 12 / SJR 13) proposing amendments to Alaska’s Constitution relating to the appointment of state judges. The amendments would significantly alter the role of the Alaska Judicial Council in submitting nominations of those most qualified. If passed, the proposed amendments would be placed before Alaskan voters at the next general election. The Senate State Affairs committee held a hearing on the Governor’s proposal on March 20, 2025. We encourage you to learn about the Alaska Judicial Council and to watch our discussion with Alaskans for Fair Courts to better understand Alaska’s unique and rigorous system.

Watch the forum here.

Women's History Month - March

Below is my special order on Arliss Sturgulewski on March 31st.

Below is Senator Tobin's special order on Susan Butcher on March 31st.

Below is Senator Gray-Jackson's special order on Jasmin Smith on March 31st.

Current Topics

In effort to promote wildfire mitigation, Anchorage wood lots will be free for residents starting Saturday. Anchorage Daily News

The Municipality of Anchorage will begin offering free dropoff at city wood lots this spring in an effort to encourage wildfire mitigation efforts. Free dropoff starts Saturday at the Anchorage Municipal Wood Lot, operated at the Anchorage Regional Landfill, at 15500 E. Eagle River Loop Road. That wood lot will be open 8 a.m. to 5 p.m. Monday to Saturday.

 

DMV urges Alaskans to get Real ID by May deadline. Alaska Public Media

Starting on May 7, every air traveler age 18 and older will need a REAL ID to board a flight within the United States.

 

Resolution pending in Alaska Legislature urges more federal support for NOAA weather buoys. Alaska Beacon

There is particular concern about outages at a Prince William Sound site called Seal Rocks. The buoy there is supposed to be transmitting critical information about winds, wave heights and other conditions that affect the safety of oil tankers using the Trans Alaska Pipeline System terminal in Valdez. That Seal Rocks buoy, an important source of weather data for marine-safety studies, has had intermittent outages for several years and is currently out of service.

 

Visitors to Alaska State Capitol will be screened under newly awarded contract. Alaska Beacon

Visitors to the state Capitol in Juneau will have to go through a metal detector under a policy adopted on Monday.

 

Arctic Issues

Amid U.S. tariff announcements, Alaska-Canada relationship sparks discussion in capital. Alaska's News Source

“I think it represents the alignment of Arctic people, Canadian and U.S.,” Giessel said, “which, sometimes, is disconnected from the East Coast of our two countries.”



Economy

Alaska legislators look to savings account for deficit fix. Alaska Beacon

About half of the deficit in this year’s budget is attributable to lower-than-expected oil revenue. The other half is due to budget changes proposed by Gov. Mike Dunleavy, whom the Republican minority caucuses generally support. Among the budget additions: $10 million for the Alaska Seafood Marketing Institute, millions for wildfire firefighting, and $2.7 million to cover missed payments by the state to employees’ retirement accounts.

 

Trump's Social Security check change could affect half a million Americans. Axios

The Social Security Administration is simultaneously rushing to cut phone services at the White House's request. But over-the-phone help is exactly the kind of assistance many affected recipients may need before September's deadline.

 

With two months to go, state lawmakers' budget priorities are on a collision course. Alaska Public Media

We’re coming up on the end of March, which means the complicated, time-consuming budget-writing process is well underway. But, looming over all of it: lower oil prices that mean lawmakers are facing deficits. And unlike the U.S. Congress, the state Constitution requires the Legislature to balance the budget every year. Current estimates for a status quo budget put it hundreds of millions of dollars underwater. So that’s for basically the same education funding as last year, and a roughly $1,400 Permanent Fund dividend.

 

Opinion: Worried about Alaska's budget crisis? Fix this obvious tax loophole. Anchorage Daily News

 

Opinion: The time to protect the Alaska Permanent Fund is now. Anchorage Daily News

 

Stocks stank in Q1. Axios

The S&P 500 ended the first quarter down 4.6%, while the tech-heavy Nasdaq dropped 10.4% and the broad Russell 3000 fell 5%.

(My comment: This means 401(k) retirements lost money. A large pool, professionally managed defined benefit pension is the only secure retirement plan.)

 

Alaska budget progress stumbles in House Finance Committee. Anchorage Daily News

Currently, the House’s draft budget for the next fiscal year that starts July 1 is around $167 million in deficit, according to the nonpartisan Legislative Finance Division.

 

The ghosts of trade wars past. Axios

History, they say, may not repeat but it rhymes. America's periods of high tariffs dating back to the 1800s carry eerie similarities to today's trade war escalation.

 

Consumers, business owners hold their breath waiting for the Trump tariffs. Alaska Beacon

Trump’s tariffs on products from Canada, China and Mexico could cost the typical American family at least an extra $1,200 annually in price increases, according to a report Lovely co-authored. The dollar amount increases when calculating for universal tariffs on all imported goods, and when accounting for retaliation from other countries.

 

"Liberation Day" is here. Brace yourself. Axios

"Needless to say, it would result in a significant recession," Mark Zandi, chief economist at Moody's, tells Axios in an email. The consumer impact could be substantial. The Yale Budget Lab has estimated that a 20% tariff, with retaliation, could reduce the average household's purchasing power by up to $4,200.

 

Projected change in disposable household income under 20% broad tariffs, by income quintile. Axios

Tariff pain is not shared equally: The less money you make, the more Trump's proposed higher taxes on imports will hurt. Tariffs are another blow to lower-income earners already struggling with higher prices.

 

Energy

Idaho National Laboratory unveils first-of-a-kind molten salt test loop. U.S. Dept of Energy

Idaho National Laboratory recently debuted a new molten salt test loop that will support the development of advanced reactors using molten salts.  It will also be used to help support the world’s first fast-spectrum, salt-fueled reactor experiment at the lab scheduled to begin in the 2030s.  

 

What's behind the push to revive nuclear power? Governing.com

Two identical reactors are up and running in Georgia, a turn of events that could make it easier to attract investment to the Virgil C. Summer plant. “If you turn the problem upside down,” Little says, “it’s a real opportunity.” But it’s an opportunity that still faces obstacles based on cost, safety and long delays in construction. Much is under consideration; not much is being built yet.

 

New wave of nuclear reactors sends states racing to the industry. AP News

With the promise of newer, cheaper nuclear power on the horizon, states are vying to position themselves to build and supply the industry’s next generation as policymakers consider expanding subsidies and paving over regulatory obstacles.

 

Opinion: Clean energy tax credits are working for Alaskans. Congress needs to continue the program. Anchorage Daily News

 

Village hopes to offset power costs with solar energy. Alaska's News Source

Although clean technologies can pay for themselves over time through utility bill savings, upfront costs remain a barrier. Rooftop solar can cost upwards of $20,000, a storage battery runs between $8,500 and $10,000, and highly efficient electric appliances such as heat pumps can be a few thousand dollars more than less efficient gas models. 

 

No, Glenfarne is not operating two LNG export projects. Reporting from Alaska

Glenfarne is not operating LNG export projects in Louisiana and Texas because they have not been built. They are in the works, but the company has yet to make a final investment decision to build either one. Duval said he hopes to make a final investment decision on building the Texas LNG project by the end of 2025. That would be the same time frame on which he hopes to make a final investment decision on building a 42-inch gasline from the North Slope to the Kenai Peninsula, costing more than $10 billion.

 

Education

Alaska Supreme Court asks lower court to weigh in on legality of using public funds to cover private school tuition. Anchorage Daily News

In an opinion issued Friday, the Alaska Supreme Court asked a lower court to consider “whether it is constitutional to use allotment funds to pay for private school tuition.” The question is at the center of an ongoing court case that seeks to determine whether Alaska’s public homeschooling programs can be used to subsidize private school tuition.

 

Anchorage's school language immersion programs - among the nation's most robust for a city its size - are at risk. Anchorage Daily News

Students, parents and administrators are holding out for Alaska lawmakers to change their fate: The school board’s budget cuts came with a promise of near-total reversal, should the Alaska Legislature substantially increase its per-student funding before May 15, the district’s deadline for issuing layoff notices. A reversal would save the immersion program from cuts, but also restore middle school sports and some high school sports, the gifted and talented program and other beloved school programs.

 

Alaska school officials say layoff notices are going out, budget uncertainty costing districts. Alaska Beacon

School districts across the state are starting to issue “pink slip” notices to teachers and staff that they may be laid off, in what has become a difficult spring tradition in Alaska, as legislators debate how much the state will allocate to education funding next school year. 

 

Cuts & displacement: A waiting game in Southcentral for education funding. Alaska's News Source

The Anchorage School District (ASD) announced on Monday that it could be seeing hundreds of positions displaced due to a lack of education funding. In a letter sent out to ASD families on Monday, the district wrote, “If we do not receive any additional funding by the end of the year, targeted layoffs for some job titles will likely be necessary.” Further north, the Matanuska-Susitna Borough School District (MSBSD) said it is also facing major cuts. “These cuts will be significant,” Mat-Su Superintendent Randy Trani said.

 

Politics

Alaska elections chief 'reviewing' Trump order that clashes with state voting deadlines. Anchorage Daily News

An executive order signed by President Donald Trump on Tuesday to change the way elections are administered clashes with several of Alaska’s voting laws. Trump’s order, which is likely to face legal challenges, aims to require votes to be “cast and received” by Election Day.

 

Kansas lawmakers override veto to shorten window for voting by mail. AP News

Republican legislators in Kansas on Tuesday shrunk what already was among the nation’s shortest windows for voting by mail, arguing that problems with the U.S. Postal Service’s handling of ballots required the move. Critics called it voter suppression. The GOP-supermajority Legislature overrode Democratic Gov. Laura Kelly’s veto of a bill eliminating an extra three days after Election Day for voters to return mail ballots that are postmarked by Election Day. The change will take effect in 2026.

(My comment: Yes, we depend on USPS to deliver mail ballots and the vote-in-person ballots from polling places around our state. This last November 2024 election, a contract air carrier actually dropped a bag of ballot materials on the side of the road. Mercifully there were no voted ballots in that bag (only unused materials) but nevertheless it demonstrates our reliance on multiple handlers of our ballots. To require shortened ballot delivery in Alaska is truly voter suppression. It is, in my opinion, unacceptable.)

 

Trump says he's considering ways to serve a third term as president. Anchorage Daily News

President Donald Trump said Sunday that “I’m not joking” about trying to serve a third term, the clearest indication he is considering ways to breach a constitutional barrier against continuing to lead the country after his second term ends at the beginning of 2029.

 

A tiny library straddling the border is caught up in U.S. - Canada tensions. Anchorage Daily News

With the frontier a flash point, Boudreau wondered what it might mean for the Haskell Free Library and Opera House, where she is president of the board of trustees. For 120 years, it has straddled the Quebec-Vermont border, with tattered black tape marking the line as it cuts across a children’s reading room. Its location was no accident. Its founders wanted the tiny library to be enjoyed by both Canadians and Americans, as a physical embodiment of the friendly coexistence of the two countries.

 

Health Care

Alaska House votes to increase oversight and limit time for foster youth in psychiatric facilities. Alaska Beacon

The bill would require foster youth hospitalized in psychiatric facilities to have a court hearing within seven days, a reduction from the current requirement of 30 days.

 

HHS turned upside down. Axios

Veterinarians, population researchers, records officers and neuroscientists were all swept up in a chaotic series of layoffs Tuesday that effectively ended the government's health establishment as we know it.

 

Alaska's public health programs lose millions in federal grand funding. Alaska Public Media

The federal government notified the state that Alaska’s division of public health won’t receive millions of dollars in public health grants it was expecting over the next two years. The state department of health, which oversees the division, did not agree to an interview for this story, but spokesperson Alex Huseman said by email that the grants were terminated March 24.

 

More than 5M could lose Medicaid coverage if feds impose work requirements. Stateline

Under an emerging Republican plan to require some Medicaid recipients to work, between 4.6 million and 5.2 million adults ages 19 to 55 could lose their health care coverage, according to a new analysis.  The study, conducted by Urban Institute researchers with support from the Robert Wood Johnson Foundation, calculated that up to 39% of the 13.3 million adults in that age group who became eligible for Medicaid when their states expanded the program under the Affordable Care Act would lose coverage if Congress required states to impose work rules.

Alaska Oil Resource Values

 

Alaska North Slope crude oil price (04/02/25): $76.26

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 (04/01/25): 478,404 bpd

 

 

Precious Metal Prices

April 02, 2025

Gold - $3157.96

Silver - $33.83

Platinum - $990.34

Palladium - $1000.57

Rhodium - $5700.00

 

Alaska Permanent Fund

website

 

Fund value April 01, 2025 - $81,707,700,000

PFD payout from ERA, Fiscal years 1982-2024: $31.3 billion

Over $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