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Alaska Legislature starts budget process facing historically volatile oil prices

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Alaska Legislature starts budget process facing historically volatile oil prices


JUNEAU — The Alaska Legislature is beginning its annual budget-making course of throughout a interval of historic volatility in oil costs.

With oil income set to account for round a 3rd of the funds that can go towards funding state companies, capital initiatives and the annual Everlasting Fund dividend, Alaska Senate members charged with crafting the finances stated Friday that they might not financial institution on excessive oil costs when planning the finances for the fiscal 12 months that begins in July.

The value uncertainty started throughout the COVID-19 pandemic, in accordance with Dan Stickel, chief economist of the Division of Income, who spoke to the Senate Finance Committee. North Slope crude oil hit a file low of $16.55 per barrel in April of 2020. Two years later in June, the value of oil had risen nearly eight-fold to $127.77 per barrel — the very best it had been since 2012. The value per barrel has remained beneath $90 because the starting of December.

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The Division of Income has projected that the Alaska North Slope crude oil worth will common $88.45 cents over the fiscal 12 months that begins July 1, bringing in slightly below $3.4 billion. At that worth level, Stickler stated a $1 change up or down over the subsequent fiscal 12 months would equal roughly $70 million in gained or misplaced income. A now-annual draw of Everlasting Fund earnings is ready to contribute one other roughly $3.4 billion.

[The full list of 2023 Alaska House and Senate committee assignments]

Gov. Mike Dunleavy’s unseen carbon monetization plan has been flagged as probably a major supply of latest income, but it surely was not a part of the division’s presentation on Friday.

There are some causes for optimism for the state’s fiscal image coming from the oil patch. John Boyle, commissioner-designee of the Division of Pure Assets, advised the Senate Finance Committee on Wednesday that oil and gasoline producers have saved manufacturing ranges regular from growing older oil fields, which he referred to as a “main accomplishment.”

John Boyle, Juneau, legislature

Final 12 months, the state was awash with sudden oil income after Russia’s invasion of Ukraine despatched costs hovering, and there was additionally a flood of federal coronavirus reduction. This 12 months, Stickel stated the federal funding would make up an identical share of income to the state as oil and Everlasting Fund earnings.

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Sitka Republican Sen. Bert Stedman, who manages the working finances within the Senate, stated legislators wouldn’t be counting on an oil worth slightly below $90 a barrel to craft the finances. As an alternative, a yet-to-be-determined, however decrease oil worth determine, could be used to make sure the state doesn’t expertise a shortfall and have to rely closely on drawing from the $2.3-billion Constitutional Funds Reserve, the state’s foremost financial savings account.

Bert Stedman, Juneau, legislature

Stedman stated he needed to make plans for extra oil and gasoline income above a conservative oil-price determine whether it is realized. In 2022, the Legislature’s finances was written to fund faculties a 12 months forward of time and to make bigger deposits into state financial savings accounts with oil over $100 a barrel, however the worth of oil has since dropped to $82 per barrel as of Wednesday, ending these plans.

A place to begin for the Legislature would be the finances proposal Dunleavy unveiled in December. The governor’s finances successfully comprises a $300 million deficit, which Stedman expects to balloon to round $400 million when supplemental spending wants for the present fiscal 12 months are thought-about.

With college districts strained by years of just about flat funding, the Senate majority and the Home minority have stated rising training funding could be a high precedence this legislative session. Neither have agreed on a brand new greenback quantity for faculties, with the Senate Training Committee set to carry its first listening to Monday.

The brand new Republican-led Home majority caucus was extra ambivalent Thursday about rising the per pupil funding method referred to as the Base Pupil Allocation. Home Speaker Cathy Tilton, R-Wasilla, stated a dialog about that ought to happen, however that “there may very well be different choices and alternate options.”

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Palmer Republican Rep. DeLena Johnson, who will handle the working finances within the Home, harassed in an interview that lawmakers would want to make powerful selections with state income extra strained than it was firstly of final 12 months.

“If we wish to improve training — to no matter stage that is likely to be — then there could must be different issues that have to go,” she stated.

A complicating issue would be the dimension of the capital finances. Final 12 months, it was greater than $700 million, largely to pay for an expanded Port of Nome and to rebuild the crumbling Port of Alaska. Earlier than 2021, the capital finances had been nearer $100 million yearly for a number of years with strained state funds.

Alexei Painter, who heads the nonpartisan Legislative Finance Division, stated there could be dangers in stripping again capital finances spending to that $100-million determine. For Alaska to obtain funding from the trillion-dollar federal infrastructure invoice, there’ll have to be state contributions, he stated.

Reps. Neal Foster, a Nome Democrat, and Bryce Edgmon, a Dillingham impartial, are set to handle the capital finances within the Home as members of the Bush Caucus who joined the Republican-led majority. Foster stated as a rural lawmaker that priorities for him embrace bettering primary infrastructure like water and sewer.

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Bryce Edgmon, DeLena Johnson, Juneau, Neal Foster, legislature

The biggest single outlay in Dunleavy’s finances proposal is for a statutory Everlasting Fund dividend at a price of $2.5 billion. If authorised, eligible Alaskans would obtain a record-high PFD of roughly $3,900.

Since 2017, the Legislature has not adopted the statutory method to calculate the scale of the Everlasting Fund dividend, with lawmakers as an alternative selecting the scale of the PFD as a part of the budget-making course of. The Senate and Home majority caucus leaders stated throughout the first week of the session that they didn’t have united positions on what dividend quantity they are going to help.

Dunleavy and legislators throughout the Capitol count on the $3,900-dividend determine to drop as different priorities are authorised. Juneau Democratic Sen. Jesse Kiehl, a member of the Senate Finance Committee, stated that with out new income sources, the one approach to stability the finances could be to cut back the dividend dimension.

“We are able to cross our fingers and pray for oil to go up and keep up, however that’s not a fiscal plan and it’s not a robust future for the state,” he stated.

The Republican-led Home majority coalition has stated that making certain the state’s “fiscal stability” might be a precedence this legislative session with few extra particulars, past eager to implement a tighter legislative spending cap. In 2021, a bicameral and bipartisan group of legislators agreed to a framework for a long-term fiscal plan, which included a brand new dividend method, requires a brand new spending cap and a whole lot of tens of millions of {dollars} in new income every year. However the framework was by no means applied.

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Johnson stated that framework may very well be a place to begin for caucus discussions with a caveat: “That was a unique caucus, that was a unique group of elected officers.”

Ketchikan impartial Rep. Dan Ortiz, who’s a returning member of the Home Finance Committee, stated the state’s fiscal image and the problem of find out how to prioritize spending might be acquainted for individuals who have served within the Legislature for the previous few years.

“It’s the identical primary points,” Ortiz stated. “You’ve acquired the needs of oldsters to proceed to see authorities companies adequately funded, in addition to having a really good PFD, and never having to pay for it with taxes.”

Anchorage Every day Information reporter Iris Samuels contributed to this story.





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Alaska

Western Alaska storm and southerly flow drives warmth back into the state

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Western Alaska storm and southerly flow drives warmth back into the state


ANCHORAGE, Alaska (KTUU) – Gusty winds and heavy snow has begun to spread into Western and Southwest Alaska, with a surge of warmer air. Temperatures in Southwest Alaska is already 10 to 35 degrees warmer than yesterday morning. This warmth will spread across the rest of the state through the weekend, with some of the most pronounced warmth along the Slope. We’ll see many areas this weekend into next week remaining well-above average.

SOUTHCENTRAL:

Temperatures are slowly warming across Southcentral, with many areas seeing cloud coverage increasing. While we could see some peeks of sunshine today, most locations will see mostly cloudy conditions. While we can’t rule out light flurries for inland locations, most of the precipitation today will occur near the coast. Snow looks to be the primary precipitation type, although later this evening a transition to rain or wintry mix will occur. This comes as temperatures quickly warm across Southcentral.

We’ll see highs today in the upper 20s and lower 30s for inland areas, while coastal regions warm into the 30s and 40s. The southerly flow aloft will remain with us for several days, pumping in the warmth and moisture. As a result, Kodiak could see over an inch of rain today, with gusty winds.

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While most of the precipitation this weekend remains near the coast, inland areas will see the best chance for wintry mix Sunday into Monday. Little to no accumulation is expected.

The key takeaways for this weekend, is snow transitioning to rain, with some gusty winds likely for parts of Southcentral this weekend.

SOUTHEAST:

Another fairly quiet day is expected across Southeast today, outside of some light snow near Yakutat. We’ll see a mix of sun and clouds with temperatures remaining on the cooler side. Parts of the Northern Panhandle may stay in the upper 20s today. The stretch of quiet weather will stay with us through the first half of Saturday, followed by an increase in precipitation and winds. This upcoming system may bring some heavy snowfall to Southeast, so be prepared for that potential this weekend. Temperatures warm into next week, back into the upper 30s and lower 40s for many areas.

INTERIOR:

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While temperatures this morning have bottomed out as low as -30 near Fort Yukon, temperatures will warm into the weekend. A wind advisory for the Alaska Range goes into effect at 9 Friday morning, where winds up to 60 mph will warm the Interior. Temperatures today for many locations will warm into the single digits, with some of the greatest warming arriving Saturday through next week. It’s likely we’ll spend most of next week with temperatures in the 20s and 30s, with the warmest locations near the Alaska Range. While we will largely stay dry, there is a chance for some light snow arriving Sunday night into Monday.

SLOPE/WESTERN ALASKA:

Temperatures will remain slightly above average for parts of the Slope today, with warming winds to build into the Slope this weekend. This comes as our area of low pressure in the Bering Sea continues to move farther north. Be prepared for gusty easterly winds along the Slope, leading to blowing snow and reduced visibility. We’ll see temperatures quickly warm well above average, with highs climbing into the 20s and 30s along the Slope into next week. While some snow is possible through the weekend, the heaviest activity will occur for the Brooks Range. We’ll see the potential for 4 to 12 inches of snowfall, with the highest amounts occurring along the southern slopes of the Brooks Range near Kobuk Valley. Winds could gusts as high as 45 mph, leading to greatly reduced visibility.

Heavy snow is impacting Western and Southwest Alaska this morning, with winds gusting up to 50 mph. Numerous winter weather alerts, as well as a coastal flood advisory is in effect. The heaviest snow will fall for the Seward Peninsula and east of Norton Sound, where up to a foot or more of snow is to be expected. The heaviest amounts will fall today, with the activity set to lighten up through Sunday. In addition to the snow, gusty winds will lead to areas of blowing snow. Visibility could be reduced down to less than half a mile at times. As southerly flow continues to pump in warmth, we’ll see a transition from snow to rain later today into Saturday for parts of Southwest Alaska.

ALEUTIANS:

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Gusty winds and heavy rain will fall through the Aleutians today, where up to .75″ of rain is possible. As the area of low pressure moves north, we’ll see a new low form just south of the Eastern Aleutians. This will lead to additional rain and winds into the weekend. Winds could gusts upwards of 50 mph through the Eastern Aleutians and through the Alaska Peninsula. With ridging to our east, more rain and winds remain with us into early next week. There is the potential that the Pribilof Islands see a return to snow Sunday, as colder air moves into the Bering Sea.

OUTLOOK AHEAD:

Well above average warmth will stay with us as we close out January. While one more short-lived cold snap is possible, we may have to wait until February before we tap into warmer conditions. Temperatures through the close of January will keep average monthly temperatures 5 to 12 degrees above average for much of the state. The overall trend still favors a wetter pattern, although with warmer weather the southern parts of the state will favor more rain or a mixed bag of precipitation.

Have a wonderful and safe holiday weekend.

See a spelling or grammar error? Report it to web@ktuu.com

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Alaska governor, ally of Trump, will keep flags at full-staff for Inauguration Day • Alaska Beacon

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Alaska governor, ally of Trump, will keep flags at full-staff for Inauguration Day • Alaska Beacon


Alaska will join several other Republican-led states by keeping flags at full-staff on Inauguration Day despite the national period of mourning following President Jimmy Carter’s death last month.

Gov. Mike Dunleavy announced his decision, which breaks prior precedent, in a statement on Thursday. It applies only to flags on state property. Flags on federal property are expected to remain at half-staff.

Flags on state property will be returned to half-staff after Inauguration Day for the remainder of the mourning period.

The governors of Indiana, Idaho, Iowa, Texas, Florida, Tennessee, Oklahoma, North Dakota, Nebraska, Montana and Alabama, among others, have announced similar moves. 

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U.S. Speaker of the House Mike Johnson, a Republican from Louisiana, said on Tuesday that flags at the U.S. Capitol would remain at full-staff on Inauguration Day. 

Their actions follow a statement from President-elect Donald Trump, who said in a Jan. 3 social media post that Democrats would be “giddy” to have flags lowered during his inauguration, adding, “Nobody wants to see this, and no American can be happy about it. Let’s see how it plays out.”

Dunleavy is seen as a friend of the incoming president and has met with him multiple times over the past year. Dunleavy and 21 other Republican governors visited Trump last week in Florida at an event that Trump described as “a love fest.”

Since 1954, flags have been lowered to half-staff during a federally prescribed 30-day mourning period following presidential deaths. In 1973, the second inauguration of President Richard Nixon took place during the mourning period that followed the death of President Harry Truman. 

Then-Gov. Bill Egan made no exceptions for Alaska, contemporary news accounts show, and no exception was made for Nixon’s inauguration in Washington, D.C., either. 

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A spokesperson for Dunleavy’s office said the new precedent is designed to be a balance between honoring the ongoing mourning period for former President Jimmy Carter and recognizing the importance of the peaceful transition of power during the presidential inauguration. 

“Temporarily raising the flags to full-staff for the inauguration underscores the significance of this democratic tradition, while returning them to half-staff afterward ensures continued respect for President Carter’s legacy,” the spokesperson said.

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Federal disaster declaration approved for Northwest Alaska flooding

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Federal disaster declaration approved for Northwest Alaska flooding


ANCHORAGE, Alaska (KTUU) – President Joe Biden announced the approval of federal disaster assistance on Thursday for recovery efforts in areas that sustained damage from flooding and storms in October 2024.

Those areas include the Bering Strait Regional Educational Attendance Area (REAA) and the Northwest Arctic Borough area where many structures were damaged by a severe storm from Oct. 20-23, 2024.

Jerry Jones and his two children were rescued Wednesday after being stranded overnight on the roof of their flooded cabin about 15 miles north of Kotzebue during a large storm impacting Western Alaska.(Courtesy of Jerry Jones)
Kotzebue Flooding
Kotzebue Flooding(Michelle Kubalack)

In a press release, FEMA announced that federal funding is available on a cost-sharing basis for emergency work to the state of Alaska, tribal and eligible local governments, and certain private nonprofit organizations.

The announcement comes just a few days after Biden released the major disaster declaration approval for the August Kwigillingok flooding.

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