The Alaska Senate on Wednesday approved a draft $12.25 billion state operating budget and in the process, finalized legislative plans to offer public schools a one-time, $175 million funding bonus.

The Senate’s proposed Permanent Fund dividend is about $1,580 per recipient, including an estimated $222 energy relief payment. That’s below the $2,270 figure included in a competing draft passed by the House, and the final figure will be subject to further debate. 

The smaller amount reduces the risk of the state spending down savings.

“We’re living within our means. This is what it looks like,” said Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee. 

Stedman said the budget balances if the state’s oil production hits estimates and if North Slope oil prices average $78 per barrel between July 1, 2024, and June 30, 2025.

Oil and other sources of revenue would be enough to pay for state operations, as well as new legislation and the state’s capital budget, which pays for construction and renovation projects statewide. 

Wednesday’s 17-3 vote, which follows the state House’s passage of its own draft operating budget, triggers the final phase of the Alaska Legislature’s annual budget process, where legislators negotiate a compromise between the two drafts.

In places where the drafts match, the relevant item is final, except that Gov. Mike Dunleavy has the ability to reduce or eliminate final items with his line-item veto power. He cannot increase them or add new ones.

On education, the Senate included a $680 one-time boost to the state’s Base Student Allocation, the core of Alaska’s per-student funding formula. 

That’s worth about $175 million statewide, and the same language is in the House’s draft budget, making the item final, except for the governor.

Last year, Dunleavy vetoed half of an identical one-time boost, but in a news conference with reporters on Wednesday, the governor signaled that he may not repeat his veto.

“I’ve told people I’m open to the increase,” Dunleavy said, “an increase in one-time funding, especially to help with the inflationary issues.”

The Senate budget also includes a House-adopted plan to spend $5.2 million more on reading programs for students in kindergarten through third grade.  

Senators included additional money for student transportation, something that will have to be negotiated with the House, which did not include it.

Also subject to further negotiation is $11.9 million in education money added after the federal Department of Education warned that the state underfunded some school districts during the COVID-19 pandemic.

The Senate is led by a supermajority of nine Democrats and eight Republicans, and Wednesday’s draft budget was crafted by that supermajority. 

Before the final vote, the three Republicans outside the majority offered 21 amendments containing a variety of priorities, but all failed.

The most contentious amendments dealt with the amount of this year’s Permanent Fund dividend, which Stedman labeled “the focal point of most budgets.”

Sen. Mike Shower, R-Wasilla, proposed taking extra money from the Alaska Permanent Fund to increase the Senate’s proposed dividend to a figure above the House’s amount, once the energy relief payment is included. 

While much of the fund is constitutionally protected, lawmakers need only a simple majority to break a law that limits spending from the fund’s earnings reserve, which contains money accumulated from the fund’s investments.

Shower said his proposed dividend is what was recommended by a bipartisan, bicameral working group and implied that passage could encourage work on a plan to bring the state’s long-term finances into balance.

He had support from Sen. Shelley Hughes, R-Palmer, who said, “If we were to pass this, we would start on the road toward a fiscal plan.”

But a majority of other senators opposed the idea. Stedman said he believed the amendment would instantly create a billion-dollar deficit.

“I don’t think this is a prudent amendment,” he said.

Sen. Forrest Dunbar, D-Anchorage, said he’d like to see larger dividends, but thus far, the Legislature hasn’t advanced other needed components of the financial plan, including new state revenue.

Shower’s amendment failed, 6-14. 

The House and Senate are expected to appoint lawmakers to a budgetary conference committee on Monday, starting work on a final budget draft.

The budget is typically the final item passed before the Legislature adjourns for the summer.

Updated: 48 minutes ago Published: 1 hour ago

The University of Alaska and the Alaska Graduate Workers Association have reached an agreement on a labor contract that would last from July through the end of 2026, the university said Tuesday.

The university described the pact as a “tentative initial agreement” that must go through more steps. The agreement must be approved by the university Board of Regents and the state Department of Administration, as well as be ratified by the union. The university plans to submit the request for the Legislature to fund it before the end of the legislative session, scheduled to happen by May 15.

UA President Pat Pitney said the university administration’s goal throughout negotiations was to support “fair compensation increases” for graduate students with a contract that was financially sustainable.

“I’m incredibly grateful for the hard work put in over the last several days that allowed us to reach an agreement,” Pitney said in the prepared statement announcing the agreement. “We look forward to submitting it for legislative consideration this session.”

Union bargaining committee member Abigail Schiffmiller said Tuesday evening that the union aims to ratify the agreement within 24 hours to allow time for the Legislature to fund it.

Schiffmiller, a Ph.D. student and research assistant in biology at the University of Alaska Fairbanks, said the agreement addresses all of the critical issues raised by union members. They include increasing pay, allowing bargaining over health insurance in the future, and requiring that if employees lose their jobs, the university must prove there was a just cause. It also allows the union to file grievances over discrimination and sexual harassment. And she said it would help both the university — by allowing students who had been under financial pressure to focus on research — as well as the state, by making the university more competitive in attracting grad students to Alaska, who may stay after they graduate.

The graduate student workers voted to unionize in October and marched in protest Monday to increase pressure for a contract. On Friday, a Fairbanks Superior Court judge issued a temporary restraining sought by the university that blocked the students from striking.

The university said it took 96 days of negotiations to reach an agreement, in contrast with a national average of 465 days for a union’s first contract agreement.

The terms of the agreement include increasing minimum pay for master’s degree students by 14%, to $24.50 per hour, and by 17% for Ph.D. students, to $29 hourly, according to the university statement.

The terms include fee waivers for union members, and up to three weeks of unpaid family leave and 20 hours of scheduled leave per semester. The agreement also includes grievance procedures and continued health insurance coverage, as well as union input on future insurance changes. The cost of insurance is set to increase by $400,000, to be covered by the university, according to the statement.

The three universities in the statewide system have a total of 23 Ph.D. programs, more than 60 master’s programs, as well as graduate certificate programs.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.

The Biden-Harris Administration’s Department of Energy Tuesday announced it has awarded more than $20 million to Alaskan communities for rural and remote clean energy projects. The six projects selected as part of the Energy Improvement in Rural and Remote Areas (ERA) grant program aim to cut energy costs, enhance climate resiliency, and support local economic development: 

• Tanacross Solar PV and Tok Battery Energy Storace System (Native Villages of Tanacross and Tok, Alaska): $5 million grant to install 1.5MW of solar PV on the grid at the Alaska Power & Telephone power plant paired with a 1.5MHw battery energy storage system that is expected to displace more than 12,500 gallons of expensive diesel fuel each year.
• Big Battery as our Backbone (Kokhanok Village, Alaska): $5 million grant to upgrade the Kokhanok microgrid with a 943kWh battery energy storage system and solar, PV, wind turbine and electric thermal storage heating units, significantly increasing the microgrid’s reliability and resilience.
• New Stuyahok Solar-Battery (New Stuyahok, Alaska): $4.3 million grant to construct a 500kW solar PV array, a 540kWh battery energy storage system, and a microgrid controller – leveraging abundant summer daylight hours to displace nearly a quarter of fuel consumption for rural Yup’ik villages in the remote Dillingham region.
• Decarbonizing the Tongass with Tribally Owned Heat Pumps (Prince of Wales Island, Alaska): $2.5 million grant for a tribally owned project to install air-source heat pumps in up to 240 tribal buildings – powered by existing clean hydroelectric resources – to help reduce residents’ energy reliance on and emissions from fossil fuel use.
• High Penetration Solar-Battery Project (Ambler, Alaska): $2.1 million grant to upgrade an existing power plant to allow for a 400kW solar PV system and a 500kWh battery energy storage system to produce nearly a quarter of the community’s electricity and allowing the village’s diesel generators to be turned off for the first time in more than 40 years.
• Ouzinkie Independent Power Energy Improvement Project (Spruce Island, Alaska): $1.7 million grant to construct a 160kW solar PV and 210kWh battery energy storage system for a new microgrid offering back-up power during severe weather outages and reducing electricity costs by 10% for this community of 128 indigenous residents.

Nineteen projects across 12 states and 13 Tribal nations and communities were selected for this round of ERA grant funding. Further details on the $78 million awarded is in the press release below, and you can find specific project details on the OCED website. 

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