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 $1,000 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 $1,000 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.
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 FY25 Supplemental and FY26 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.
Operating & mental health budgets:
The House Finance Committee closed out their subcommittees and held public testimony on the operating budget this month. The House will next consider amendments in both their Finance Committee and their House floor before sending the budget 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.
As we work toward 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. 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:
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.
SB 92 Corporate income tax – oil & gas entities:
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:
This bill 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:
This bill would reduce the maximum tax credits paid to oil companies from $8 down to $5 per barrel to create a more fair and sustainable tax structure for the state. 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.
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 Gov. Mike 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.
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.
HB 116/SB 115 Commercial fishing insurance co-op:
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:
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 Department of Revenue. The bill extends the sunset date to 2030.
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.
Other fishery bills
HB 117 Commercial fishing; set gillnet co-op:
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.
HB 111/SB 108 Finfish farms and products:
This governor’s bill would allow finfish farming in inland, closed system bodies of water. It would prohibit the cultivation of salmon. I am concerned what precedence this bill would set for future fish farming in our state. 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 ASMI board; meaning of seafood:
This governor’s bill would amend the duties of the ASMI board and the definition of “seafood” to include aquatic farm products.
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: [email protected]
Gary Stevens is the state senator representing Cordova in District C.
