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Hello from Juneau! The legislative session is now at the halfway mark and the work in the Capitol continues at a busy pace. Along with the budget, the major items on the Senate’s agenda continue to be the gasline, education, retirement, and updating the election processes. And just a reminder: apply for your PFD by March 31!
Gasline
The Senate Resources committee introduced SB 275: Natural Gas Projects; Corp Income Tax to provide governance and transparency to the AK-LNG gasline project. This bill will provide legislative oversight of Alaska Gasline Development Corporation (AGDC) comparable to the oversight the legislators have of AIDEA and other corporations. Through AGDC, the state is a 25% partner in the project and will have the choice to invest further, up to 25%, in the project infrastructure. The bill also allows parties of existing AK-LNG agreements to waive confidentiality. This bill eliminates the ability of corporations to deduct gas lease expenditures from their oil production tax and applies a 9.4% corporate income tax to non-corporation entities shipping gas and providing other LNG-related activities. The bill establishes a 15c/mcf surcharge on large LNG processing plants, which could raise $150 million annually once the plants were at full capacity. The bill also creates transparency by requiring separate accounting of revenue derived from state / AGDC ownership shares and makes it available for appropriation. This bill has been referred to Senate Resources and Finance committees.
To date, the legislature has still not seen any binding gas sale documents or purchase agreements for the project. Nor is it clear who will pay for the estimated $44 billion cost. Glenfarne, the gasline developer, stated last year that an investment decision would be made at the end of 2025. They then moved that decision to the end of February. To date, a new timeline has not been shared. If only local utilities sign the long-term, binding contracts to buy gas, and international buyers do not follow through, Alaskans could be left covering the costs through higher gas prices.
The Governor reported last week that he would introduce bills that would reduce oil and gas property taxes for the state by 90% and also include Payment in Lieu of Taxes (PILT) legislation, a substitute for property taxes that are essential for municipalities. As I’ve stated before, PILT or a reduction in oil and gas property taxes can create a burden on the local municipalities. As workers and people move to Alaska as a result of the pipeline, municipalities may be unable to raise sufficient revenue to provide for the increased demand in services. Local governments are then forced to raise local and borough taxes or cut basic services. The Senate Majority is looking for more information on costs, permitting, and committed binding agreements to purchase the gas before we agree to the Governor’s proposed legislation to give away millions of dollars in local property taxes.
We all hope a pipeline can come about, but it must be done properly. The Senate Majority continues to hold hearings to ensure the state has the information it needs to understand potential long-term implications for Alaska’s economy and fiscal future.
Revenue
The Spring Revenue Forecast was released in mid-March. To quote the Dept. of Revenue’s (DOR) press release, “this forecast is being released during a period of high uncertainty given the conflict in Iran…” DOR’s forecast includes both an increase in production and oil price. The forecast includes a $9.77 per barrel increase for the current Fiscal Year (FY) 2026, resulting in an additional $545 million in revenue, and a $13.00 per barrel increase for FY27, resulting in an additional $510 million in revenue. While this is good news, DOR points out that the price per barrel could fluctuate from below $45 to above $130 per barrel due to volatility being at near-record levels. It is very uncertain if the price will remain high enough for long enough to reduce or eliminate the deficits in our current FY26 budget and next year’s FY27 budget.
Click here for the Department of Revenue’s Spring Revenue Forecast.
Click here for DOR’s presentation in Senate Finance Committee.
SB 274: Permanent Fund POMV Available for Appropriation was introduced by the Seante Finance Committee this month. This bill would maintain the purchasing power of the Permanent Fund by lowering the Percent of Market Value Draw (POMV) from 5% to 4.5% over a five-year period (the POMV would be reduced by 0.1% each year for 5 years starting in FY2029.) The annual POMV draw is used to fund state services and PFDs. As we saw last year when the Permanent Fund suffered a $2 billion loss due to the stock market crash, it is vital that we work to protect and grow our fund to withstand such market fluctuations. Reducing the POMV draw rate to 4.5% will safeguard the principal from inflation, and over time lead to a larger Permanent Fund balance. While this means less cash available early on, allowing the Permanent Fund balance to grow will eventually lead to more revenue available in the future.
FY 2027 Budget
The House Finance Committee closed out their subcommittees and held public testimony on the operating budget this month. Next, they will consider amendments before passing a new version of the operating budget out of their committee. From there it will go to their House Floor where further amendments will be considered before passing the budget over to the Senate. Thank you to everyone who called and emailed their public testimony. Your comments are crucial to helping create a balanced budget that provides services and infrastructure needed in our district and state.
The Senate unanimously passed HB 289 Governor’s Supplemental budget bill with changes as a result of a compromise with the Senate Minority. The final bill addressed current year funding needs, including $75 million for Disaster Relief, $98 million for Fire Suppression, $35 million as matching for the Halong Typhoon federal disaster funds, $70 million for Dept. of Transportation matching of federal funds, and $130 million to replace money in the Higher Education Investment Fund which is used to provide scholarships to Alaska high school students. The Senate also unanimously voted to utilize the Constitutional Budget Reserve (CBR) savings account to fund the supplemental bill. The items removed from this bill, including current year funding for senior benefits, public assistance, and Medicaid services, will be part of the end of session negotiations. The bill moved back to the House but unfortunately, as of this newsletter, they were not able to get the required ¾ vote to utilize the CBR to fund the bill items. Should the House be unable to pass the bill, these items will also be included in the end of session budgets.
I am currently participating on several Senate Finance Subcommittees to review the budgets and advocate for the services that are important for our district and the state. You can follow the committee schedules and public testimony opportunities on akleg.gov or contact your regional Legislative Information Office (LIO). You can review the Governor’s proposed and amended budget here: omb.alaska.gov. The House and Senate Finance Committee and subcommittee reports will be posted here once completed: legfin.akleg.gov.
Education
Our Senate Education and Finance committees both received presentations from the Dept. of Education and Early Development (DEED) regarding the school major maintenance and capital improvement list. After a decade of the school bond debt moratorium and vetoes of capital projects, many of our schools are needing millions of dollars in repairs. The Joint Education Task Force has also heard testimony from districts on the challenges to getting school projects on the maintenance list and is looking into reforms that could be introduced to improve this process. The Senate Finance committee has asked the DEED Commissioner to make her own list recommendations to the committee and also provide suggestions on how to improve the process overall.
I was pleased my bill, SB 23: Civics Education, passed the Senate this month and already had its first hearing in House 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.
SJR 29: Constitutional Amendment to create the Education Fund was introduced this month by the Senate Finance Committee. This resolution would create an Education Fund as a separate fund in the state treasury. The legislature could appropriate money to the fund and money in the fund would also be invested. The legislature could appropriate money from the Education Fund only for public education. If passed by the legislature, this resolution would appear on the fall’s general election ballot. This resolution is being heard in the Senate Finance Committee.
SJR 28: Supporting J-1 & H-1B Visa Programs was introduced by the Senate Education Committee. This resolution supports the vital role of workers serving in our state under the J-1 and H-1B programs for specialty occupations which support our state’s economy and many of our school districts, including Kodiak Island Borough. This resolution was referred to the Senate Labor & Commerce Committee.
SB 277: Education Omnibus bill was introduced by Senate Education. This bill would address several areas of policy reforms and funding measures to increase state support for all forms of public education while ensuring accountability. It will increase the Base Student Allocation by 1.9% to account for inflation as of 2025 (an increase of $126.54 per student) and increase pupil transportation by approximately 6.5%. It provides reading proficiency grants for school districts to support the Alaska Reads Act and increases support for homeschool students by funding them at the same level as students in brick-and-mortar schools. You can read the sponsor statement here. This bill has its first hearing in Senate Education this week.
SB 278: Local Contributions by School Districts was introduced by the Senate Education Committee. This bill would change the calculation for a municipalities Local Contribution amount. Currently the required local contribution of a city or borough school district is a 2.65 mill tax levy on the full and true value of the taxable real and personal property in the district, not to exceed 45% of the district’s basic need for the preceding fiscal year. This bill would include wordage stating that the local contribution also may not exceed the amount of the district’s required local contribution for the preceding fiscal year by more than 2%. This bill was referred to Senate Education and Finance committees.
Voter Data
I received many calls and emails from constituents regarding their concern that our voter data was released to the federal government back in December. This included date of birth, partial or full social security numbers or drivers license numbers, and other personal voter information. I share these concerns and am working with Senate Majority members to address them. Recently, the Senate held a joint hearing of the Senate Judiciary and State Affairs Committees to question the Division of Elections and Administration on the matter. The House also held a similar joint hearing and introduced HJR 43: Voter Privacy which expresses the concern regarding this confidential voter information disclosure and urges action to protect voters in our state. You can view the Senate Joint Hearing and Documents and the House Joint Hearing and Documents.
Other Legislation
SB 140: Fire Station Grant Program
This bill establishes the Fire Station Grant program. The fund will act as a matching grant program available for construction or renovation of an eligible fire station. This bill passed the Senate and is now in House Finance.
SB 64: Election Reform
This bill makes several changes to our elections to improve access for eligible voters while also protecting voter election data, improving voter list maintenance and ballot curing, and creating an online ballot tracking system. Click here for the sectional of Version B of this bill which outlines the changes adopted in the House Finance committee this week. The committee will be taking up amendments soon.
HB 78: Retirement Systems; Defined Benefit Option
This bill would bring back a defined benefit pension program for state employees to help with recruitment and retention of state employees in crucial positions such as public safety and teachers. Reports show that new employees are less likely to remain in Alaska and more are likely to leave for jobs in other states that provide better retirement programs. This bill passed the House and Senate Labor & Commerce. It is now in Senate Finance where it has received several hearings this past month. You can view the presentations here.
2026 PFD Applications
The March 31 deadline to apply for your PFD is fast approaching! 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.
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
View past newsletters and press releases: alaskasenate.org/stevens/
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