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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 education funding, addressing public employee and teacher retirement, updating election processes, and tackling Alaska’s ongoing energy issues to ensure long-term sustainability and affordability.
And just a reminder: apply for your PFD by March 31!
Education Funding
HB 69 BSA Increase
This bill passed the House this month and is now in Senate Education. When it left the House, the bill included the $1000 Base Student Allocation (BSA) increase but not the additional inflation increases in following years. It also included an open enrollment policy, charter school reforms, establishing an Education Task Force, Correspondence Study Program oversight, a $450 reading incentive grant per student to support the Alaska Reads Act, and a cell-phone policy for schools. If passed, a $1000 BSA increase would expand our budget by $275 million. The Senate Majority continues to work with the House and Governor to achieve our goal of providing a high-quality public education system for Alaska.
Senate Education held public testimony on this legislation last week. The committee will next consider amendments for the bill before moving it out to the Senate Finance Committee.
FY 2026 Budget
Revenue
The Spring Revenue Forecast was released in mid-March. Oil is expected to increase by 62 cents in our current Fiscal Year 2025, up to $74.48 per barrel. Unfortunately, oil is expected to decrease by $2 in Fiscal Year 2026, down to $68 per barrel. This equates to a $70 million reduction in FY26 revenue from the previous forecast. When these changes are incorporated into both the FY 25 Supplemental and FY 26 Operating Budgets, it equals a deficit of approximately $625 million. And that is before adding in additional expenses such as a BSA increase or other legislation passed during the session.
Click here for the Dept. of Revenue press release.
Click here for the 2025 Spring Revenue Forecast.
Click here for the forecast presentation in Senate Finance. (Click on “Documents” to view the power point presentations.)
Governor’s Amendments
The Governor provided his budget amendments earlier this month. Three amendments address newly negotiated union contracts. Others included $4.6 million for the Dept. of Corrections, including $2.5 million for inmate healthcare. An additional $2.7 million was added to repay public employees for lost investment earnings in their retirement accounts after the Dept. of Administration failed to make these contributions in a timely manner.
Operating & Mental Health Budgets
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 in their public testimony. Your comments are crucial to helping create a balanced budget that provides services and infrastructure needed in our district and state.
You can review the Governor’s proposed and amended budget here: omg.alaska.gov. The House and Senate Finance Committee and subcommittee reports are posted here when completed: legfin.akleg.gov.
As we work towards balancing our budget, tough decisions will need to be made. I am concerned with overdrawing our Constitutional Budget Reserve (CBR) savings account or making drastic cuts to services that have already experienced reductions over the last ten years. The Senate has begun discussions on various revenue bills in Senate committees. (See Legislation section below for more information.) What would you support? I welcome your thoughts on how to balance the budget and provide for improved education funding and other vital services.
New Revenue Legislation
SB 109 Permanent Fund – POMV Split
SB 109 is referred to Senate Finance.
This bill would rewrite the PFD formula to a 75/25 POMV split: 75% of the earnings reserve draw would go to state services, 25% of the draw would go towards PFDs. This bill would help stabilize the state’s revenue and budgeting. This bill has received bipartisan support from the sponsoring Senate Finance Committee members.
SB 92 Corporate Income Tax – Oil & Gas Entities
SB 92 is referred to Senate Resources and Senate Finance.
This bill restructures the state corporate income tax so that it is applied equally to all companies in Alaska including S corporations. The change could generate as much as $100-150 million in revenue per year.
SB 113 E-Digital Business Corporate Income Tax
SB 113 is referred to Senate Finance.
This bill seeks to modernize Alaska’s corporate income tax law to include online sales from outside corporations. It would impose our state corporate income tax on some out-of-state businesses that operate online inside Alaska. The bill could generate as much as $25-65 million in new revenue per year.
SB 112 Oil & Gas Production Tax
SB 112 is referred to Senate Resources and Senate Finance.
This bill reforms Alaska’s per-barrel oil tax credits to create a more fair and sustainable tax structure for the state. SB 21, passed in 2013, has cost Alaska $8 billion in lost revenue. In 2021, the Department of Revenue testified to the Joint Fiscal Policy Working Group that cutting the oil tax credits from $8 to $5 would have minimal impact on oil company investments in Alaska. Similar comments were provided by independent legislative consultants testifying to the working group. This bill, SB 112, would reduce the maximum tax credits paid to oil companies from $8 down to $5 per barrel. This bill could generate $400 million in new revenue per year.
Federal Actions
Last month, House Speaker Edgmon and I sent a joint letter to our Federal Congressional Delegation to oppose recent harmful federal actions. We urged our delegation to take immediate action against federal policies that potentially endanger the state’s economy and the well-being of Alaskans. The letter highlighted several recent federal decisions that could cost the state billions of dollars, jeopardize thousands of jobs, and destabilize essential services for low-income and rural Alaskans.
The concerns we outlined included: the recent termination of federal employees on probationary status, which could cost nearly 1,400 Alaskans their jobs, including 350 held by veterans; a federal budget proposal that risks significantly cutting Medicaid and Children’s Health Insurance Program (CHIP) coverage for 165,000 Alaskans; and a sweeping freeze on federal funding for Alaska infrastructure and rural energy projects.
New tariffs on a variety of products are also creating concern and uncertainty for various industries. Almost two-thirds of Alaska’s seafood is exported which makes our seafood industry vulnerable to both U.S. tariffs and consequential actions by trading partners. I’m grateful the Alaska Seafood Marketing Institutes (ASMI) and other fishing industry organizations are working to address these issues with our federal government.
Since Alaskans already have some of the highest costs of living in the nation, immediate federal intervention is essential to prevent further economic unrest in the state. The state cannot afford to absorb these cuts and Alaskans shouldn’t have to shoulder this burden. As the state legislature, we can do more and will work with our federal delegation and Governor Dunleavy and his administration to address this looming crisis. I appreciate how many of you have already reached out to our federal delegation and my office to share your concerns. We need a unified front and I hope you will continue reaching out on these matters. Click here for a copy of the letter.
Seafood Task Force Legislation
Several pieces of legislation have now been introduced based on recommendations from the Seafood Task Force that I chaired last year. Click here for a copy of the task force’s final report.
HB 116 / SB 115 Commercial Fishing Insurance Co-Op
HB 116 passed out of House Fisheries and is now in House Labor & Commerce.
SB 115 is referred to Senate Labor & Commerce and Finance.
This bill would allow the commercial fishing industry to establish an insurance pool, similar to the Purse Seine Vessel Owner’s Association that operates in Washington state.
SB 130 / HB 129 Fisheries Product Development Tax Credit
SB 130 is referred to Senate Resources and Senate Finance.
HB 129 is referred to House Fisheries and House Finance.
This bill amends the tax credit program qualifiers to include all species of fish and shellfish. It also adds new qualifiers for the credit and requires a quicker determination of credit eligibility from the Dept. of Revenue. The bill extends the sunset date to 2030.
SB 135 Refund of Fish Business Tax to Municipalities
SB 135 is referred to Senate Resources and Seante Finance.
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.
Other Fishery Bills
HB 117 Commercial Fishing; Set Gillnet Coop
HB 117 passed out of House Fisheries and is now in House Resources.
This bill would preserve the traditional model for salmon set-gillnet operations in our state by continuing to allow small groups to work within a cooperative, co-mingle their fish, and have one permit holder deliver the fish on behalf of the group. Newly applied interpretations of statute and regulations have threatened this traditional model. This bill would place this traditional model into statute and defers to the Board of Fisheries to establish in regulation how fish from cooperatives are accounted for.
HB 111 / SB 108 Finfish Farms and Products
HB 111 is referred to House Fisheries & House Resources.
SB 108 is referred to Senate Resources and Senate Finance.
This Governor’s bill would allow finfish farming in inland, closed system bodies of water. It would prohibit the cultivation of pink, chum, sockeye, coho, chinook, and Atlantic salmon. I am concerned what precedence this bill would set for future fish farming in our state. Opening the door to fish farming in Alaska is dangerous to our wild salmon. While I appreciate the Governor’s willingness to look for solutions for our struggling fishing industry, I do not feel fish farms are a viable option.
HB 135 / SB 131 Duties of Alaska Seafood Marketing Institute (ASMI) Board; Meaning of Seafood
HB 135 is referred to House Fisheries and House Resources.
SB 131 is referred to Senate Resources and Senate Finance.
This Governor’s bill would amend the duties of the ASMI board and the definition of “seafood” to include aquatic farm products. ASMI provided the Governor’s office supporting documentation for the bill.
Real ID
As of May 7, 2025, you will need a REAL ID or other federal ID such as a passport, military ID, or BIA card with photo, to fly on domestic flights, access certain federal facilities, and pass through certain TSA checkpoints. More information at dmv.alaska.gov
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.
2025 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.
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
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