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Hello from Juneau!
Things are moving at a fast pace as we near the end of our session. The major items on the Senate’s agenda continue to be education funding, recruitment and retention of state employees, energy, and the budget. Thank you for your continued efforts to provide public testimony on the bills and budgets. I appreciate hearing your comments and insights.
Education
The legislature was able to pass and the Governor signed HB 193 Internet for Schools in time for schools to take advantage of the new 100 Mbps download speeds to improve broadband services for our schools who participate in the School Broadband Assistance Grant (BAG) program. This program is beneficial for many of our schools in District C.
The House has introduced HB 392 which is similar to the SB 140 Education omnibus bill that was vetoed by the Governor. Currently, HB 392 includes: a $680 BSA increase, giving the state board authority to authorize new charter schools, a charter school termination appeal process, a charter school coordinator to provide assistance with the application process, and increased funding for correspondence students and for reading improvement plans for students K-3. Teacher bonuses were removed from the bill. HB 392 is now in House Finance.
There are two areas of concern for our education system that the legislature will be working to address. One is the “Maintenance of Equity” rule. Last December the federal education department stated Alaska failed to meet certain requirements for school COVID funding and therefore owes $29 million to three schools districts, one being the Kenai Peninsula Borough School District. If the state does not develop a plan with the federal government, the state will need to fill this funding gap from our budget and Alaska could be designated “high risk” for future federal grant funding. The second concern is the recent court decision to invalidate the state’s correspondence program. Last week, the state superior court decision ruled that cash payments to home-study students for purchases of material and courses from private schools is unconstitutional. I anticipate the state will ask for a “stay”, which would postpone the enactment of the ruling until the school year is out so students can get through the school year. Our Senate Education committee is conducting hearings on each issue. I will be working with legislators to ensure our students and schools receive a quality education that is funded within the parameters of our state constitution and federal law.
FY25 Budgets
The Senate and House were able to meet our agreed schedule to trade budgets on April 12. Below is a summary from last week’s budget sessions. You can review the Governor’s proposed and amended budget here: omg.alaska.gov. The House and Senate budget changes can be viewed here: legfin.akleg.gov.
Operating & Mental Health Budgets
The House passed out their version of the FY25 Operating & Mental Health budgets. They added over $20 million to the $6 billion (UGF-unrestricted general funds) operating budget which also includes over $1 billion for a $2,270 PFD + Energy Relief Check. After accounting for outstanding issues such as wildfires, fiscal notes for legislation that will be passed such as $23 million for the Senior Benefits program and $40 million for school internet, and the potential need to cover the federal requirements for education funding due to the Maintenance of Equity issue with the Dept. of Education & Early Development, this budget could leave a $276 million deficit. The Senate will work to address this deficit to ensure vital services are met while providing for the largest PFD we can afford and not eliminating our savings.
Here are some items in the House version of the operating budget:
- $479,500 to support school lunch programs
- $8.9 million for K-3 AK Reads Act program
- $175 million one-time funding for education - equivalent to a $680 BSA increase
- $7.5 million for childcare grants to help with operating costs and employee salaries
- $5 million for Alaska Seafood Marketing Institute
- $5.2 million for Head Start
- $20 million for AMHS in case federal grants are lower than what the Governor budgeted (our Senate Finance committee anticipates the shortfall could be as high as $38 million.)
- $3.7 million for Alaska Council on Domestic Violence & Sexual Assault
- $20 million for Community Assistance Program; this will help ensure a $30 million payment in FY26 (similar to this year’s FY25 $30 million payment)
- $1.2 million for Public Radio targeted for rural stations which are important for emergency broadcasting
- $5 million for Tourism Marketing
- $2 million for Adult Day Services
The Operating and Mental Health Budgets are now in the Senate. Senate Finance Subcommittees have closed out and will present their recommendations to the full committee at upcoming hearings.
Capital Budget
The Senate has passed the FY25 Capital and FY24 Supplemental Budget for a combined total of $445 million UGF. Much of these funds are used as matching for over $3 billion in federal funding for our state. This capital budget is a balanced approach of prioritizing essential projects and critical infrastructure needs across the state while remaining within our fiscal means.
Here are some projects in the capital budget that are important for District C:
- Seldovia’s Raw Water Transmission Line Replacement $250,000
- Kodiak-St. Herman’s Harbor Infrastructure Replacement $1 million
- Quzinkie’s Phase 2 Alterative Energy project $50,000
- Cordova’s Rebuild of Eyak Skaters Cabin $212,000
- Homer’s Harbor Expansion General Investigation project $288,523
- UA Kodiak Campus Maintenance $955,000
- Kenai Peninsula Food Bank – Refrigeration and Freezer Upgrade $10,000
- Homer’s Kachemak Bay Drive Milepost 0-3.5 Reconstruction $300,000
- Seward Bear Creek Service Area Flood Mitigation $655,000
- Harbor Facility Grant Fund $7 million and Emergency Funds to address state owned harbor liability $1 million
- Kodiak Airport Drainage & Ramp Repave Stage 2 $31.8 million
- Homer Society of Natural History – Pratt Museum Roof System Replacement $250,000
- Kodiak’s Chiniak Hwy. Milepost 15-31 Rehabilitation $1.5 million
- Seward’s AK Sealife Center Roof Replacement $700,000
- Cordova’s Second St. Reconstruction $363,880
- Seward Hwy. Milepost 14 Railroad Crossing Reconstruction $18.3 million
- Homer All-Ages & Abilities Pedestrian Pathway (HAPP) project $208,800
- Kodiak’s Otmeloi Way Reconstruction $6 million
- Kalifornsky Beach Road Drainage Improvements $2.7 million
- M/V Tustumena Replacement Vessel $23 million (Toll Credits) and $92 million(Federal)
- Pavement & Bridge Preservation Program projects $121.5 Million
- AMHS: funds to support vessel overhauls, annual certification and shoreside facilities rehabilitation.
Funding was also included for statewide programs that benefit our district including Village Safe Water, Housing & Weatherization, Senior Housing, School & University Deferred and Major Maintenance, School Construction for the top two schools on the list, Code Blue match funds for our rural emergency medical programs, Food Security projects and grants, and Winter Trail Grooming Grants.
The Capital Budget is now in the House. I anticipate House Finance will have public testimony in the next several weeks. Our LIOs can help you keep track of these public testimony opportunities.
DOT STIP update
I’m glad to report that the Dept. of Transportation met the deadline to resubmit their application for the 2024-2027 State Transportation Improvement Program (STIP) and the majority of projects have been approved by the Federal government which means $5.6 billion in state transportation projects will move forward this year. The approved STIP projects were incorporated into the Capital Budget passed by the Senate. You can view the 2024-2027 STIP information here: https://publicinput.com/stip/.
I was also pleased to hear the Federal Highway Administration approved use of toll credits for the state match requirements for the Tustumena replacement. These toll credits can also be used as match for other federally funded projects approved in the STIP including improvements to the Kennicott emission and exhaust system, and other ferry terminal repairs and upgrades.
Energy
The Dept. of Natural Resources is predicting a Cook Inlet gas shortfall by 2027. Gas imports will likely not happen until 2030. Barge imports could happen sooner, but they would be more expensive. There are several energy bills in the legislature including ones to modernize the Railbelt electrical grid, boost Cook Inlet gas production, increase renewable energy, and regulate storage of natural gas to prevent price gouging. Any reduction to royalties to incentivize gas production in Cook Inlet would reduce our state revenue. The Senate, House and Governor are all working together to address our energy issues.
Fisheries & Seafood
I presented online at ComFish in Kodiak last weekend and appreciated the discussions on how to address changes and make improvements to ensure the sustainability of our renown Alaskan fisheries. I have been meeting with businesses and fishermen regarding the recent processing plant sales and closures and how this will affect the industry. The Dept. of Labor and Workforce Development’s TRENDS report highlights this topic in their April 2024 issue. Below are two resolutions we are working on in the Senate to address these matters.
SCR 10 Joint Legislative Seafood Industry Task Force was introduced last month and had several hearings in Senate Finance. The resolution was modified to create a 16-member task force to address elements of the Alaska seafood industry crisis that may be addressed through governmental policy and/or through action in the private sector. The resolution is being heard in the Senate Finance committee.
I have also cosponsored SJR 14 Support State Seafood Industry which calls on the U.S. Congress and all federal agencies to adopt policies and engage in efforts to improve the competitiveness and resiliency of Alaska’s seafood industry. The resolution passed the Senate unanimously and is now in House Rules.
For Updates on Legislation & Budgets
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.
Phone: 907-465-4925
Toll Free: 1-800-821-4925
Email: Sen.Gary.Stevens@akleg.gov
Sincerely,
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