Alaska
Alaska House Republicans criticize majority’s decision to temporarily set dividend at zero in budget draft
House minority Republicans are decrying a procedural decision to temporarily zero out the Permanent Fund dividend size in next year’s draft budget while conversations are underway on its ultimate amount.
Majority members on the House Finance Committee have repeatedly underscored their intention to include a dividend in this year’s final budget.
In a 6-5 vote on Wednesday, majority members set the annual payout to Alaskans at zero, with the promise that the dividend size will ultimately be determined later in the session.
The move was opposed by all committee Republicans, who said that despite the fact the move was temporary, it masked the state’s fiscal challenges.
Lawmakers have not followed the existing state statute for determining the annual Permanent Fund dividend for a decade, as lower oil revenue forced them to turn to the fund’s earnings to pay for an increasing share of government services.
But Gov. Mike Dunleavy again included the statutory dividend in this year’s budget draft, asking lawmakers to draw roughly $1.5 billion from the state’s savings to cover its cost.
Republicans in the House have conceded that Dunleavy’s request for a payment of roughly $3,800 is unreasonable, but they have yet to land on a dividend size that would appease their minority caucus.
Leaders of the bipartisan majorities in the House and Senate, meanwhile, have said they will seek to adopt a balanced budget and avoid significant draws from state savings. Last year, that strategy led to a dividend of $1,000 per eligible recipient.
“Do I think that there’s going to be a full statutory PFD? Do I think there’s even a possibility of that? No, I don’t think so,” House Minority Leader DeLena Johnson, a Palmer Republican, said on Thursday. “Do I think that it could be higher and better? Absolutely. And do I think it’s the closest thing that we have to a spending cap in this universe that we live in right now? Absolutely.”
With the dividend set at zero, the budget draft that lawmakers will use as their template as they build next year’s spending plan is starting with a revenue surplus of more than $800 million, compared with Dunleavy’s starting point of a $1.5 billion deficit.
Republicans said that artificially large surplus, which also doesn’t take into account other significant funding items like disaster response expenses, could lead to misperceptions about the state’s fiscal constraints.
Rep. Will Stapp, a Fairbanks Republican who serves on the Finance Committee, said he is concerned that House majority members will use that budget surplus as the basis for adding more spending on state services to the budget.
“When I hear the co-chair of Finance talking about all the things that he’s going to spend money on, and he deposits the entirety of the PFD into the general fund, that makes me think that we’re not taking this deficit very seriously at the moment,” said Stapp. “I’m not super optimistic at the moment that they’re going to have downward pressure on the budget.”
House Finance Committee Co-Chair Andy Josephson, an Anchorage Democrat, said that the advantage of beginning the budget-making process with a dividend set at zero is that “now we can hear from all 11 members of the Finance Committee at the end of March, by amendment, and have a debate about what that number should be.”
“What constrains us is public perception and desire for a dividend,” Josephson said. “But the prospect of paying a statutory dividend is so obliterated in our fiscal position that it doesn’t constrain us anymore.”
Ultimately, Josephson said that the dividend this year is likely to be between $800 and $1,400 per eligible Alaskan, depending in part on whether lawmakers approve a draw from savings as part of the budget-making process or stick to available revenue.
Concrete discussions on the size of the dividend likely won’t begin in earnest until mid-March, when the Department of Revenue will issue an updated revenue forecast. The size of the dividend will be shaped by ongoing policy questions, Josephson said, like whether to increase education funding and whether to adopt a new public pension system.
“Once those policy calls are made, then we can better see what remains,” said Josephson.
Rep. Calvin Schrage, an Anchorage independent, and Rep. Neal Foster, a Nome Democrat, co-chair the House Finance Committee alongside Josephson. They voiced support for the budget draft on Wednesday.
“Everybody knows that the PFD is not in this. That’s the biggest elephant in the room, and I think we all need to talk about that, and it’s going to be an ongoing conversation,” said Foster.
As lawmakers continue discussions on next year’s spending plan, next week they are also set to debate a request from Dunleavy to draw more than $400 million from savings to cover a deficit in the current year’s budget.
Alaska
State of Alaska Secures Win in Fight for Transparency Around Oil Development
(Bethel, AK) –Wednesday, the Ninth Circuit Court of Appeals issued a favorable opinion for the State of Alaska in ConocoPhillips Alaska v. Alaska Oil and Gas Conservation Commission (AOGCC), agreeing that State laws requiring disclosure of oil well data are not preempted by federal law.
“Alaska relies heavily on our resources and resource development,” said Acting Alaska Attorney General Cori Mills. “We are also stewards of those resources for the citizens of Alaska. Alaska’s law both allows resource development now, and encourages further development and exploration in the future. We’re pleased that the Ninth Circuit recognized that federal law has not overridden Alaska’s balanced approach.”
The Alaska Oil and Gas Conservation Commission regulates oil and gas operations throughout Alaska, including within the National Petroleum Reserve–Alaska (NPR–A). Under Alaska law, companies need permits from the AOGCC to drill and must submit well data. The AOGCC is required to keep well data confidential for 24 months.
ConocoPhillips drilled several wells on lease holdings within the NPR–A and submitted data to the AOGCC. When the 24-month period expired, the AOGCC notified ConocoPhillips of the upcoming well data disclosure. ConocoPhillips sued in federal court to stop the disclosure process claiming that the Naval Petroleum Reserves Production Act, the federal law allowing private exploration in the NPR–A, preempted Alaska’s 24-month disclosure law. The federal district court found Alaska law preempted, and the AOGCC sought appellate review by the Ninth Circuit Court of Appeals.
On appeal, the Ninth Circuit agreed with the AOGCC. The federal Production Act does not preempt state law. The Ninth Circuit therefore reversed the district court’s holding to the contrary.
“The Alaska Oil and Gas Conservation Commission is pleased with the court’s decision upholding Alaska law,” said AOGCC Commissioner Jessie Chmielowski in a declaration filed in the litigation court. “Alaska’s balanced approach to well data confidentiality leads to increased exploration activity, not less. Alaska law allows for a two-year confidentiality period on exploration well data to leverage a company’s investment in drilling. Thereafter, making the data public has incentivized exploration on the North Slope. Placing well data in the public record allows competing companies to evaluate different exploration concepts or interpretations based on seismic data that, without well data, are just educated guesses.”
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Alaska
Opinion: A governor’s race for Alaska’s next generation
Alaska needs change. That’s why I’m running for governor: to bring new energy and a new generation of leadership to the governor’s office.
For 13 years in a row, more Alaskans have left our great state than have moved here. Prices are rising, schools are closing and Alaskans are getting left behind.
This year, those planning to leave Alaska include Ben and Catherine Walker, both recipients of Alaska’s Teacher of the Year Award. They can’t justify staying in the place they grew up in and love because of our failure to invest in the fundamentals, such as our schools.
The problem is personal. I’m 37. Many of those leaving Alaska are my age — debating whether there’s a future for us here or not. It’s a challenge we must solve.
I love challenges.
Back in 2012, I dropped out of college to challenge an entrenched Republican incumbent legislator who was running unopposed to represent my home region of Southeast Alaska. I launched a scrappy, grassroots campaign and focused on the kitchen table issues that matter to every Alaskan: good schools, getting our fair share of oil revenues, lowering costs, protecting our fisheries. I won — by 32 votes.
When I was sworn in, I was baby-faced and bushy-tailed, just 23 years old. It was the beginning of a decade-long tenure in the Legislature. A lot happened in those 10 years.
Among the most important: We formed the House Bipartisan Coalition in 2016. While I have a “D” next to my name, I believe strongly in working across party lines. That’s what the Bipartisan Coalition was, and is, all about: Democrats, moderate Republicans and independents, all working together to do what’s best for Alaska.
I want to bring that same bipartisan, vigorous problem-solving spirit to the governor’s office, where it has been nonexistent the last eight years.
As governor, I want to work hand in hand with the Legislature to deliver some desperately needed wins for Alaska that will make our lives better and get our state back on track:
• Reinvest in our public schools. Our school districts are in battlefield triage mode, but instead of amputating limbs, our school boards are forced to choose which sports to cut, which electives to discontinue and which neighborhood school to close. Enough already. Get school funding back up to par.
• Forward fund our schools. Our school districts shouldn’t have to guess how much education funding will end up being appropriated in end-of-session legislative haggling.
This circus forces school districts to prospectively fire teachers, then rehire them a month or two later, when they find out the final education funding number. It’s awful for all involved. We should fix it by forward funding.
• Close the Hilcorp corporate income tax loophole. Hilcorp should pay their fair share in taxes just as ConocoPhillips, and nearly every other major corporation in Alaska, already does.
• Lower the cost of energy. Chugach Electric Association, Golden Valley Electric Association, Homer Electric Association and Matanuska Electric Association operate about 1,700 megawatts in power generation capacity. Peak Railbelt winter demand is half that: about 850 megawatts. Guess who pays for the nearly gigawatt in underused and unused power plants? You, on your power bill. The governor should force the co-ops to work together, reduce redundancies and diversify energy sources, including renewables, in order to reduce the sky-high cost of energy for Alaskans.
• Lower the cost of childcare. Alaska has inadvertently created a system of childcare permitting and licensing that effectively amounts to death by a thousand pieces of paperwork. It’s creating scarcity and cost. We need to fix it.
• Lower the cost of housing. Cut red tape to make it easier and cheaper to build more homes of all kinds — from tiny homes and ADUs to manufactured and modular housing, to apartments and condos, to traditional single-family homes. More housing of all kinds, faster.
• Rein in bottom-trawl bycatch. I will nominate Alaskans to the North Pacific Fishery Management Council who will make sure that Alaska and Alaskans — not Seattle and Lower 48 industry interests — foremost benefit from our fisheries.
• Responsibly develop our resources. Support projects that have regional buy-in and support, such as Pikka on the North Slope, which just produced first oil this month, while saying “no” when the risks are too great and those in the region are opposed, as is the case with Pebble.
• Grow our tourism economy. And let’s crack the code on winter tourism while we’re at it. If Iceland can do it, we darn well can, too. Fairbanks is having burgeoning winter tourism success. Let’s follow their great lead.
• Make Alaska an awesome place to live. Let’s build dozens more public-use cabins. Let’s build an alpine hut-to-hut system like they have in New Zealand and the Alps. Let’s build the Alaska Long Trail. Let’s make Anchorage a world-class winter city.
Does this sound like the kind of Alaska you want to live in? Then I have great news: We are the governor campaign for you. And if what you just read gives you indigestion, you’ll be relieved to know you have 17 other options.
I have more great news: I can win.
After beating an entrenched Republican incumbent, I spent a decade representing a swingy district that voted for Donald Trump.
In those 10 years, I recorded some of the highest margins of crossover support from Trump voters of any Democrat in Alaska. I ran 12% ahead of Hillary Clinton in 2016 and 15% ahead of Joe Biden in 2020.
Here’s the simple truth: Whoever becomes our next governor will need to win with the support of significant numbers of independents and moderate Republicans, in addition to Democrats. I’ve done that. And I’ll do it again. Will you join me?
Former state Rep. Jonathan Kreiss-Tomkins of Sitka is a candidate for governor of Alaska.
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Alaska
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