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 the budgets, 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. Thank you for your continued efforts to provide public testimony on the bills and budgets. I appreciate hearing your comments and insights.
Education funding
HB 69 BSA Increase:
Gov. Mike Dunleavy vetoed HB 69 that passed both the Senate and House with a $1,000 Base Student Allocation (BSA). During a joint session on April 22 the legislature did not meet the 2/3 vote required for a veto override. The governor has introduced a new education bill that includes a $560 BSA increase along with policy changes for charter school reform, increasing funding for correspondence students, and reading incentive grants. As well, a $700 BSA increase was recently added to HB 57 in the Senate Finance Committee. Whether through this new legislation or another education bill, I look forward to working with legislators and the governor on finding a compromise that will benefit our schools, students, and communities.
Budgets
FY26 Capital Budget:
The Senate has passed the FY26 Capital Budget for a total $162 million Unrestricted General Funds (UGF). Much of these funds are used as matching for more than $2.3 billion in federal funding for our state. Low oil prices have dramatically cut our capital budget. The Senate used a balanced approach of prioritizing essential projects and critical infrastructure needs across the state while remaining within our fiscal means. Unfortunately, there will be no funds available this year for community projects through the state CAPSIS grant program.
Funding was included for statewide programs that benefit our district including Village Safe Water, Housing & Weatherization, and Code Blue match funds for our rural emergency medical programs.
Other statewide projects include deferred maintenance for K-12 schools and the University, funding for AMHS vessel maintenance, law enforcement equipment, and senior housing assistance including support for domestic violence victims. The Capital Budget is now in the House.
Here are some projects in the capital budget that are important for District C:
- DOT: Chenega – AMHS Ferry Terminal Reconstruction $328,000 federal;
- DOT: Cordova – Second Street Reconstruction $727,760 federal;
- DOT: Cordova – AMHS Ferry Terminal Rehabilitation $168,000 federal;
- DOT: Cordova – Replace Rotary Plow $855,000 federal;
- DOT: Karluk – Surface/Dust Maintenance $1.235 million federal;
- DOT: Karluk – Replace Grader $437,000 federal;
- DOT: Kodiak – Airport Drainage and Ramp Repave $25.939 million federal;
- DMVA: Kodiak – Armory Barracks Conversion $300,000 Other (AIDEA reserves) and $300,000 federal;
- DOT: Kodiak – Sargent Creek Bridge Replacement $513,980 federal;
- DOT: Kodiak – Rezanof Drive ADA Improvements $3.047 million Federa;
- DOT: Kodiak – Chiniak Hwy. Milepost 15-31 Rehabilitation Design / ROW Stage 1 $20.104 million federal;
- DOT: Kodiak – Rezanof Drive Resurfacing: West Marine Way to Airport $16.583 million federal;
- DOT: Homer – Sterling Hwy Milepost 157-169 Final Construction Stage 3 $44.4 million federal;
- DOT Homer – Kachemak Bay Drive Milepost 0-3.5 Reconstruction $600,000 federal;
- DOT: Homer – All Ages and Abilities Pedestrian Pathway $208,800 federal;
- DOT: Homer – Airport Master Plan Update $712,500 federal;
- DCCED: Homer area – Dixon Diversion – Bradley Lake Hydro Power $6 million UGF state (reduced from $6.5 million);
- DOT: Ouzinkie – Grader $437,000 federal;
- DOT: Seward – Airport Improvements $10.459 million federal;
- DOT: Seward – Snow Removal and Sand Storage Building $5.414 million federal;
- DOT: Tatitlek – AMHS Ferry Terminal Rehabilitation $328,000 federal.
FY26 Operating Budget
The House passed out their version of the FY26 Operating & Mental Health budgets. The operating budget totals $6.167 billion UGF and includes more than $950 million for roughly a $1,400 PFD. This version of the budget also includes a $79 million unallocated cut, which would allow the governor to choose where to make the reductions. I have several concerns with this unallocated cut, including the fact we would be abdicating our legislative duty as the appropriators of the budget. As well, I’m concerned that the governor could choose to take the full cut from one department such as education. The operating budget is now in the Senate. Our Senate Finance Subcommittees have so far reduced the operating budget by $100 million UGF.
Revenue & new revenue legislation
Oil prices continue to drop creating a difficult budget process. Even if we passed new revenue bills this session, it would take time to implement them. We need to look towards new revenue sources to help fund the services our state needs and deserves and address our energy needs. With new, less volatile revenue sources added to our revenue stream, we can have reasonable education funding and a reasonable PFD and not have to slash vital services. I encourage you to learn more about proposed revenue legislation and provide public testimony.
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 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 toward 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 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.
Seafood Task Force Legislation
I recently presented in person at ComFish in Kodiak and appreciated the discussions on how to address changes and make improvements to ensure the sustainability of our renown Alaskan fisheries. Below is an update on the legislation recommended by the Seafood Task Force that I chaired last year.
SB 156/HB 199 AK Commercial Fishing & Agriculture Bank/Loans:
This bill would allow the Alaska Commercial Fishing & Agriculture Bank to make loans to persons involved in the state’s commercial fishing industry.
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.
SB 181 Employment Information Disclosure:
This bill allows the Dept. of Labor and Workforce Development to share information with other state agencies and the University of Alaska to promote program evaluations and educational outreach, and improved policy research and decision making for the seafood industry.
Other fishery bills
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.
SB 158 Cook Inlet New Admin Area:
This bill would establish a new administrative area on the east side of Cook Inlet.
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. I do not foresee these bills moving from committee.
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.
Sincerely,
Sen. Gary Stevens, R-Kodiak
Stevens can be reached at [email protected], or by phone at: 907-465-4925 (Juneau), 800-821-4925 (toll free), 907-235-0690 (Homer), and 907-486-4925 (Kodiak).
