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Budgets
The Senate and House were able to pass a balanced operating and capital budget on time. These balanced budgets are based on a revenue forecast of $75 per barrel of oil in Fiscal Year 2027 (FY27). We reduced spending by over $900 million and eliminated the $1 billion deficit from the Governor’s proposed budget. With volatile oil prices due to the war in Iran, our budget still includes funding for vital state services such as education, public safety, and health care; capital projects including schools, airports and AMHS; community assistance funding and provides for a $1000 PFD along with a $200 energy relief check.
FY27 Operating Budget
The Senate and House passed the FY27 operating budget totaling $5 billion Unrestricted General Funds (UGF). Both bodies worked diligently to find a balance while providing for essential services like education, AMHS, public safety, fisheries management and ensuring the PFD for future years.
Here are some items in the budget that District C constituents have commented on:
- $29 million in one-time energy relief funds for schools,
- If a surplus continues in our current FY26 budget cycle due to higher oil prices, up to $115 million in one-time K-12 funding will be distributed to school districts in addition to their statutory Base Student Allocation of $6,660,
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$3.8 million for Head Start programs to fund matching requirements for grant awards; $6.1 million for Pre-K programs; $19 million for Early Learning Coordination,
- $41.6 million to fully fund school bond debt,
- $1000 PFD and up to a $200 energy relief check if oil prices remain high in FY26,
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Up to $15 million to increase funding for the Bulk Fuel Loan Fund if oil prices remain high in FY26; note: HB 388 increases the loan cap under this program for small, rural communities coping with high fuel prices- the bill passed both bodies and is awaiting transmittal to the Governor,
- Community Assistance: added $20 million to the base payments for FY27, resulting in a $50 million distribution to communities this year; also added $30 million to the fund which will result in a $30 million distribution next year in FY28,
- Added $5.6 million to fully fund community jails (total $14.5 million),
- $11 million added to restore the heating assistance program,
- $8 million for SNAP food benefits,
- $6.4 million added for child care workforce recruitment and retention,
- $2.5 million added for Senior and Disabilities Services grants,
- $14.6 million for Medicare rate increases for health care workers,
- Fully funded the State Assistance to Retirement as recommended by the Alaska Retirement Management Board,
- Added $49.5 million to Alaska Marine Highway System (AMHS) as contingency in case federal grant funding is not available;
o Note: AMHS to receive $410 million in Federal grants over several years, however funding is delayed until Sept. Of this amount, AMHS is requesting $161.2 million in operating and over $200 million for capital projects over a 2 yr. period;
o AMHS Tustumena replacement vessel project is out for bid; bid deadline is May 28.
FY 27 Capital Budget
The Senate and House passed a FY27 Capital budget that totals $360 million UGF. Much of these funds are used as matching for over $1.8 billion in federal funding for our state. The increase in oil revenue allowed the legislature to focus more funding on deferred maintenance for our schools and university. While this provides some much-needed repairs, it does not significantly reduce the deferred maintenance backlog which was estimated at $2.4 billion two years ago. Unfortunately, there will be no funds available this year for community projects through the state CAPSIS grant program. If oil prices remain higher than budgeted, surplus funds will be diverted to a list of maintenance and construction projects statewide.
Here are some projects in the capital budget that are important for District C:
- $148.3 million for K-12 school construction and major maintenance covering 33 school projects; if oil prices remain high for the first half of FY27 an additional $10.7 million will be provided for school projects
- $24.3 million for deferred maintenance at Mt. Edgecumbe High School
- $32.5 million for University of Alaska maintenance
- $19.5 million for workforce training related to the AKLNG pipeline project
- $217,500 for libraries and online learning programs
- $14.6 million for Renewable Energy Fund projects
- $5 million for weatherization programs statewide
- $120,00 for Winter Trail Grooming – Snow Machine Registration Receipts
- $18 million for Village Safe Water & Wastewater Infrastructure projects to match $254 million in Federal funds
- $825,000 AK Marine Salmon Program
- $3.3 million Gulf of AK Chinook Salmon project
- $6.8 million Pacific Coastal Salmon Recovery Fund
- $27.5 million Marine Hwy fund for vessel shoreside facility maintenance
- $21 million Kodiak: Chiniak Hwy rehabilitation mile 15-31 for stage 1 & final design
- $925,000 Kodiak Short Trail
- $7.7 million Kodiak: Otmeloi Way Rehabilitation
- $375,000 Kodiak: Rezanof Drive Rehab mile 0-3.9
- $8.4 million Kodiak: Second St. Reconstruction
- $13.4 million Kodiak: Whitshed Road & Pedestrian Improvements final design
- $5.3 million Seward: AVTEC program expansion, equipment modernization, facilities upgrades
- $231,894 West Homer Elementary School - North wall improvement
- $703,125 Homer Airport Master Plan Update
- $2.79 million Homer All-Ages & Abilities Pedestrian Pathway
- $4 million Homer: Kachemak Bay Drive mile 0-3.5 Reconstruction
- $9.44 million Anchor Point – Homer: Sterling Highway mile 157-169 Reconstruction – Anchor Point to Baycrest Hill stage 1 & 2
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$6 million for Alaska Seafood Marketing Institute and the Alaska Travel Industry Association.
The operating and capital budgets are now being prepared for transmittal to the Governor’s office. Because we are in special session, once the Governor receives the budgets the Governor will have 15 days, not including Sundays, to make line item vetoes. The House and Senate reports and budgets are posted here: legfin.akleg.gov.
If you are interested in following our statewide budgets more closely, I would encourage you to sign up for the Legislative Finance Division Newsletter (click here to subscribe). Click here to view past and current newsletters.
Education
In addition to the above operating and capital budget funding, the following bills passed the legislature and are headed to the Governor’s office for approval or veto.
SB 23 Civics Education
My bill to add civics curriculum and assessment into public school statutes has been a top priority of mine for many years. I am pleased to report this year, the bill passed both the House and the Senate with overwhelming support. Status: will be sent to the Governor’s desk next.
HB 28 Education Omnibus Bill
The House and Senate passed this bill addressing a number of education priorities. The bill creates an incentive teacher student loan repayment pilot program, allows Alaska’s correspondence study programs to align with district-wide instructional material policies and allows students in a correspondence program to retain textbooks and materials purchased. It also includes school board reform and acknowledges the commitment of local municipalities by capping the annual increases on a district’s required local contribution by no more than 4% and allows districts to reopen schools after four years instead of seven, if determined by the community and local school board. It also creates a fund intended to reimburse districts for energy costs - electricity and heating fuel. Status: sent to the Governor’s desk next.
HJR 39 Waive Visa Fees for Teachers
This resolution requests support from federal officials for waiving visa fees for teachers. Status: Passed House and Senate; will be sent to the Governor’s desk next.
Education bills and resolutions that were introduced but did not pass the 34th Legislature:
SJR 29 Constitutional Amendment to create the Education Fund
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 it would have been passed by the legislature, this resolution would have appeared on the fall’s general election ballot. Status: Failed to be taken up from House Calendar 5/20.
SJR 28 Supporting J-1 & H-1B Visa Programs
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. Status: Passed the Senate, died in House Labor and Commerce.
Legislation
HB 239 Omnibus Crime Bill
This bill took parts of over a dozen separate crime-related bills and combined them into one bill commonly referred to as the omnibus crime bill. Provisions include creating stricter criminal penalties for AI-generated child sexual abuse material, hit-and-run incidents and sexual assault by a healthcare worker. It also raises the age of consent from 16 to 18 years old and restructures the Alaska Board of Parole, among other items. Status: Passed House and Senate, will be sent to the Governor’s desk next.
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. The bill passed both the Senate and House, but the Governor vetoed the bill on April 29th. The Legislature went into Joint Session on May 4th to consider an override of the Governor’s veto. I voted yes to override the veto, but the vote failed to achieve the override threshold of 40 votes, and the veto was sustained.
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. Status: Passed both the House and Senate; the Governor vetoed the bill on May 18th. The Legislature went into Joint Session on May 19th to consider an override of the Governor’s veto. I voted yes to override the veto, but the vote failed to achieve the override threshold of 40 votes, and the veto was sustained.
HB 48 Civil Legal Services Fund
This bill increases the amount of civil legal aid funding for vulnerable Alaskans by $400,000. Status: passed both House and Senate and became law without the Governor’s signature.
SB 272 Health Information Exchange
This bill updates the Alaska health information exchange to improve how medical records are shared securely across providers. Status: passed both Senate and House; awaiting transmittal to the Governor for his signature or veto.
HB 195 Pharmacist Prescription Authority
This bill allows pharmacists to diagnose and treat simple illnesses that can be diagnosed with a test done in the pharmacy (such as strep throat, urinary tract infections, influenza, etc.) Status: passed both Senate and House; awaiting transmittal to the Governor for his signature or veto.
HB 133 Payment of Contracts
This bill requires the state to provide timely contract payments to nonprofits, municipalities and tribes within 30 days or late payment fees accrue. Status: passed both Senate and House; awaiting transmittal to the Governor for his signature or veto.
SB 143 School Board Terms / City Councils / Training
This bill decreases the minimum city council size to three members for second class cities with 1,000 or fewer residents. It also allows local governments to lengthen or shorten the terms of school board members (current state law requires school board members to serve three-year terms). The bill also requires mandatory school board training. Status: passed both Senate and House; awaiting transmittal to the Governor for his signature or veto.
Fishery and Seafood Task Force bills
HJR 29 Ban on Russian Seafood
Passed House and Senate with overwhelming support; Status: copies sent to the President and Vice President, AK Congressional delegation, leaders of the U.S. Congress and Senate, Secretary of Commerce, and the U.S. Trade Representative.
SB 135 Refund of Fish Business Tax to Municipalities
Increases a municipality’s share of fish tax revenue up to 75% for ten years. It is the intent of this legislation that municipalities use the additional revenue to improve their harbor facilities. Status: Did not pass, died in Senate Finance Committee.
SB 130 Fisheries Product Development Tax Credit
Amends the tax credit program qualifiers to include all species of fish and shellfish. Expands the range of technology that qualifies for credits; requires a quicker determination of credit eligibility from the Dept. of Revenue. Extends the sunset date to 2037. Status: passed Senate and House with overwhelming support; will be sent to Governor’s desk next.
SB 181 Inter-agency Data Sharing
This bill was a product of the Joint Legislative Task Force Evaluating Alaska’s Seafood Industry that I chaired. Action item 22(a) of the Task Force was to modernize digital infrastructure and data sharing across the University of Alaska, Department of Labor and Workforce Development, Alaska Department of Fish and Game, Commercial Fisheries Entry Commission and other data management divisions in the state, to improve such things as user accessibility, streamline permit processing, administrative cost reductions, labor statistics, and overall informed policy making decisions. Status: Passed Senate and House with overwhelming support, will be sent to the Governor’s desk next.
HB 117 Commercial Fishing – Set Gillnet Co-op
This bill would allow two or more salmon fishery set gillnet permit holders to enter into a multi-permit cooperative operation with a maximum of ten permit holders per cooperative. The salmon harvested by these co-ops would be exempted from individual delivery requirements and could be stored together, delivered under one fish ticket, and sold by one member of the co-op or transporter. Status: Passed House and Senate with overwhelming support; will be sent to Governor’s desk next.
HB 33 Conflict of Interest – Boards of Fish & Game
This bill allows Board of Fisheries and Board of Game members to deliberate, but not to vote, on subjects for which they have a declared personal or financial interest (previously, board members were prohibited from deliberating or voting). Status: passed both Senate and House; Governor signed into law.
Revenue Bills
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 of these products will allow our state enforcement program to become more effective and Alaska will be eligible for federal grant funding to support smoking cessation and health education programs. The heart of this effort is to deter young Alaskans from being exposed to addictive nicotine products. Status: passed the Senate and the House and will next head to the Governor’s desk.
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. Status: passed the Senate and was heard in House Finance Committee, but died in House Rules.
SB 227 Seasonal Sales Tax / Tax Compact
This bill was originally introduced by the Governor in late January as a part of a fiscal plan package, and was focused on a variable, seasonal sales tax. The proposed tax was 2% October through March and 4% April through September, and was estimated to bring in $730 million. The Senate Resources Committee heard the bill and added additional revenue measures including changes to Alaska’s oil and gas tax laws, an education head tax, and a per-barrel surcharge for maintenance and operations along the TAPS corridor. Status: Did not pass, died in Senate Finance
HB 280 Corporate Income Tax Modernization
This bill updates the state’s corporate income tax to capture more revenue from companies that sell to Alaskans over the internet. This proposal is expected to bring in $15 million a year, and is very similar to last year’s SB 113, which was vetoed by the Governor. Status: Passed the House and Senate, and will head next to the Governor’s desk.
For Updates on Legislation & Budgets
Senate District C’s Legislative Information Offices (LIOs)
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!
My term does not end until January 18, 2027. 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/
Sincerely,
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