|
Hello from Juneau! The second session of the 34th Alaska State Legislature convened on Tuesday, January 20th and work in the Senate is underway. Over the coming months, we will develop and debate the Fiscal Year 2027 budget, as well as various bills and resolutions.
I continue with the honor of serving as Senate President. Our 14 of 20 member Senate Majority Coalition is made up of diverse members of both parties from across the state. We have reaffirmed our mutual priorities and begin this year with a clear responsibility: passing a fiscally prudent, balanced budget that supports the needs of Alaskans. While our state continues to have even tighter revenues and increasing demands, our focus will remain on fiscal discipline, protecting essential services, and ensuring the state makes responsible decisions that Alaskans can afford now and in the future.
The Senate is already starting off strong on this process and looks forward to working with the Governor, the House, and other stakeholders to achieve these goals. We anticipate a productive and collaborative legislative session that encourages public participation and thorough debate. While the path forward may be challenging, it is imperative that we get it right.
This is my final year serving in the legislature. My term will be up in early January 2027. I want to thank you for your passion and willingness to share your comments, personal stories, and even criticism with me over the years as we worked together to improve Alaska’s future. I have tried my best to support all my constituents over the years whether you voted for me or not. I appreciate the great honor it has been.
Gasline
The Senate Majority is already conducting hearings and meetings with Glenfarne and other stakeholders regarding the proposed AK LNG gasline. Over the next several months, we will seek clarity on where the Alaska gasline project stands, what steps remain ahead, and its economic viability. Given the potential long-term implications for Alaska’s economy and fiscal future, it is critical that legislators and the public have accurate, transparent information as decisions move forward.
Education Funding
Education will continue to be a central priority this session. The Education Task Force began meeting this fall and will continue its work to find ways to improve our public education system. Alaskans expect stability and predictability in our education system, and the Senate is committed to examining how best to support students, educators, and school districts across the state.
It was unfortunate that we could not override the Governor’s veto of SB 113 E-Digital Business Corporate Income Tax which would have raised new revenue for Alaska Reading Act grants and career and technical education. The Governor has included language similar to SB 113 in his fiscal plan bill, SB 227, that was introduced this past week (more details in next section.)
New Revenue
Since The Governor’s budget proposal depends on drawing down about half of our remaining savings, it is crucial that any long-term fiscal plan clearly outlines how Alaska will stabilize its revenues and prevent depletion of our limited reserves.
The Institute of Social and Economic Research (ISER) provided a presentation to all legislators on January 29th regarding various fiscal plan options. The researchers noted how various budget decisions could impact wages, employment, and other outcomes in our state and shared differences between this year’s report compared to a similar one they did in 2016. Eventually, the presentation along with an interactive fiscal model (excel document) will be available on ISER’s website and we will share a link in a future Capitol Report newsletter.
You can view a summary of their reports here:
The Governor has introduced his fiscal plan bills this past week. The Governor’s Fiscal Plan includes:
SB 227:
- Statewide Sales tax: 4% April – September and 2% October – March; the tax goes to 0% in 2034, but the tax itself is not repealed on that date.
- Requires municipal sales taxes to be collected by the state, taking away the ability of municipalities to offer sales tax exemptions or “tax caps” not offered by the state. The bill would permanently prevent municipalities from exempting items like food and over the counter medicine from sales taxes, even when the state tax is set to zero in 2034.
- Adopts market-based sourcing for corporate income tax apportionment, similar to a portion of SB113 that the Governor vetoed last year. The tax would go to zero in Fiscal Year 2031, after which the state would lose $260 million in revenue.
-
Sets the corporate income tax rates at zero effective 2031.
-
Raises the minimum oil/gas production tax from 4% to 6%. (Lowers back to 4% in 2031.)
- Institutes a $0.15 per barrel oil tax to go into a fund which may be used for Dalton Highway maintenance. (This would be permanent.)
- The entire bill would be conditional on passing the Governor’s other fiscal plan bills listed below.
- SB 227 has been referred to the Senate Resources and Finance Committees.
HB 275 / SB 223 Reduces the cap on growth of government spending from 5% to 1%. These bills are referred to their respective finance committees.
HB 274 / SB 222 Regular sunset reviews of state agencies by Legislative Budget & Audit at least every six years. HB 274 has been referred to House Labor & Commerce and Finance committees. SB 222 has been referred to Senate Finance committee.
HJR 30 / SJR 23 Constitutional amendment resolution would allocate 50% of the annual POMV draw to PFDs and the other 50% to state services. The resolution would also merge the permanent fund principal with the Earnings Reserve Account into one single fund and cap the annual POMV draw to 5% of the fund’s value. If passed by the legislature, this would be placed before voters on the fall ballot. These resolutions are referred to their respective finance committees.
The Governors 10-year fiscal plan anticipates $1.6 billion in new revenue, however these bills only raises a maximum of $972 million. The Governor’s plan is based on the idea that a gas pipeline and increased oil production will provide enough revenue by 2031 that new revenues will not be necessary beyond that year.
The Senate will evaluate the Governor’s fiscal package and balance it with the needs of Alaskans. A sustainable path forward will require open communication and collaboration between both the administration and the Legislature. Any solution to our fiscal crisis must be practical and in the best interest of Alaskan families, and it will require all of us working together to achieve that.
FY 2027 Budget
Committees in both legislative bodies have begun discussions on the FY 2027 budget. The starting point in the debate is the governor’s budget proposal which draws $1.8 billion from our state’s Constitutional Budget Reserve (CBR) savings account. I feel we need to grow our savings to be more financially secure for future generations, instead of tapping into it to fill the deficit. Our Senate majority will work to develop a budget that avoids depleting our savings while helping to address the critical infrastructure needs of our communities and state.
The Dept. of Revenue is again projecting declining oil prices over the next several years; a decrease of $181 million for the current year and a $119 million decrease for Fiscal Year 2027. Unfortunately, this means less money for our capital budget. The Governor’s proposed Fiscal Year 2027 Capital Budget does include over $150 million in matching funds for $1.7 billion in Federal project funding. It also includes $27.5 million for the Marine Highway Fund for vessel shoreside facility maintenance and $15 million from cruise ship head tax fees to support electrification of cruise ship terminals. There is no funding for school and university maintenance or other capital school district needs in the Governor’s budget, something which our Senate Finance members will work to correct.
The Governor proposed restoring $70 million in matching funds for the current year DOT projects that he vetoed last year. He proposes paying for it from the CBR savings account which requires a ¾ vote of legislators. Construction industry stakeholders have testified about their concerns at legislative committees this session, encouraging lawmakers to pass the funding by end of session in May verses waiting until July 1 as proposed by DOT. It is likely this will be part of our final budget passed at the end of session which includes compromises between all the caucuses to ensure enough votes.
The operating and capital budgets will be carefully vetted and will see changes as they go through the legislative process. We will not know what the final budget will look like until session’s end. I will update you on its development and public testimony opportunities in future editions of my Capitol Report. You can find out more about the governor’s budget proposal at omb.alaska.gov and on legfin.akleg.gov
Fisheries
Legislation from our 2025 Seafood Taskforce continues to move through the legislature. Last year, HB 116 Commercial Fishing Insurance Co-Op passed both bodies and was signed by the Governor. This bill allows the commercial fishing industry to establish an insurance pool, similar to the Purse Seine Vessel Owner’s Association that operates in Washington state.
Other bills are still working their way through the capitol, such as SB 135 Refund of Fish Business Tax to Municipalities. This bill increases a municipality’s share of fish tax revenue for ten years. It is the intent of this legislation that municipalities use the additional revenue to improve their harbor facilities.
In other good news, last December, the U.S. Federal Government awarded $13.7 million in seafood contracts which will include the purchase of Alaska Pollock and pink salmon.
2025 Legislation & Committee Assignments
Senate Bill 24: E-Cig/Tobacco
My bill to help address the increased vaping trend with Alaska’s youth will increase the minimum age to buy, sell, and possess tobacco and E-cigarettes from 19 to 21 years old, and places a point-of-sale (retail sales) tax on electronic smoking products (ESPs). Updating Alaska statutes to mirror the federal minimum age of sale and possession of these products will allow our state enforcement program to become more effective and our state will be eligible for federal grant funding to support smoking cessation and health education programs. This bill passed the Senate last year and is now in the House Finance committee.
Senate Bill 23: Civics Education
While most Americans agree on the importance of preparing young people for citizenship in a democracy, civics education has received diminishing attention in schools over the past couple of decades. My Civics Education bill will add civics curriculum and assessment into public school statutes. The bill is in the Senate Finance committee.
Committee Assignments
Besides leading the Senate and the variety of duties that entails, I will continue to serve as Vice Chair of Senate Education, Senate Rules, and the Special Committee on Arctic Affairs. I serve as Chair of the Senate Committee on Committees and the Senate’s Special Committee on World Trade. Additionally, I am Vice Chair on the Joint-Legislative Council, and I am a member of the Select Committee on Legislative Ethics and Senate Judiciary. As Senate President, I am also a member of the Leadership team which gives me the opportunity to ensure Senate District C is well-represented as major policy issues are discussed.
2026 PFD Applications
Applications for this year’s PFD can be submitted through March 31. You can apply through your My Alaska Account, pfd.alaska.gov, or fill out a paper application and mail in. Our LIOs have paper applications available and can help answer questions you may have. If you do apply by mail, please send your application by certified mail, and request a return receipt.
For Updates on Legislation & Budgets
Senate District C’s Legislative Information Offices (LIOs)
· Cordova LIO (907) 424-5461 LIO.Cordova@akleg.gov
· Homer LIO (907) 235-7878 LIO.Homer@akleg.gov
· Kenai LIO (907) 283-2030 LIO.Kenai@akleg.gov
· Kodiak LIO (907) 486-8116 LIO.Kodiak@akleg.gov
· Seward LIO (907) 224-5066 LIO.Seward@akleg.gov
Gavel Alaska: 360north.org
Live TV - AKleg: akleg.gov/LiveNow.
Bills & Laws: akleg.gov/basis/Home/BillsandLaws
Bill Tracking at akleg.gov/basis/btmf
Legislative Finance: legfin.akleg.gov.
The Senate District C Staff
Your District C’s Capitol office is staffed by hardworking individuals who are available to help you. Returning with me again this year are my experienced staff Katrina Matheny, Tim Lamkin, Jenny Martin, and Anne Rittgers.
Please keep in touch!
I appreciate hearing from you about legislation, budgets, and other state issues. Please do not hesitate to reach out to my office if we can be of assistance to you with state agency matters.
Phones:
907-465-4925 (Juneau)
800-821-4925 (toll free)
907-235-0690 (Homer)
907-486-4925 (Kodiak)
Email: Sen.Gary.Stevens@akleg.gov
Sincerely,
| 
