Alaska
Gov. Dunleavy promised a fiscal plan. Alaska lawmakers aren’t so sure.
JUNEAU — On what would have been the 121st day of the first regular session of Alaska’s 34th Legislature, the co-chair of the House Finance Committee was wearing a Hawaiian shirt and piling paperwork into boxes.
Lawmakers had successfully adjourned on Tuesday, a day ahead of the constitutional deadline for the end of the first regular session, surprising even themselves after last year’s session ended one hour after the constitutional deadline.
“Yesterday was odd because we adjourned at 2 in the afternoon, and people started celebrating, but it’s like — ‘Wow, it’s daylight,’” Rep. Andy Josephson, D-Anchorage, said from his office Wednesday.
Lawmakers attributed their efficient passage of the budget and the relatively peaceful end of the session in part to the fact that the House and Senate are led by ideologically aligned majorities — something that hasn’t happened since 2016.
“We meet regularly and pretty much are in agreement. So that’s been one of the greatest things this whole session, I think, is the closeness we‘ve had with the House majority,” said Senate President Gary Stevens.
The broad agreement between the House and Senate — which allowed legislators to pass a budget plan and adjourn around 1:30 p.m. Tuesday — stands in contrast to lawmakers’ deepening divisions with Gov. Mike Dunleavy.
Dunleavy’s discord with the Legislature was in stark relief when lawmakers overrode his veto of an education bill Tuesday morning, just hours before adjourning. It was the first time in more than 15 years that lawmakers had mustered the votes to override a governor’s veto.
The fissure between lawmakers and the executive extends beyond education policy, and it has increasingly been playing out openly in the halls of the Capitol, after several years in which Dunleavy repeatedly vetoed bipartisan bills and budget items and left lawmakers to debate contentious plans to address Alaska’s ongoing fiscal crisis without his involvement.
Now in his seventh and penultimate year as governor, Dunleavy is calling lawmakers to work with his administration on a fiscal plan based on a legislative package that he will introduce in the coming months.
“I’ve said to the Legislature, not just this year, but years past, let’s get together and put together a long-term, sustainable approach to fiscals, sideboards, growing the economy in Alaska, competing with other states for investments, and I’m going to actually put together a package for that in the coming year,” Dunleavy said in a press conference Monday.
Dunleavy did not immediately provide details on what elements his fiscal plan would include. The announcement was met with some skepticism by legislative leaders, who said they wanted assurances from the governor that he would be directly involved in the talks.
“The administration has failed to invest early on, politically and intellectually, in overall fiscal policy,” said Josephson. “As a consequence, we‘re just standing in place.”
Dunleavy has not agreed to an interview with the Daily News, despite dozens of requests, since 2022. He declined another request Wednesday.
Dunleavy’s new call for a fiscal working group comes after lawmakers convened one in 2021 that failed to yield significant legislative changes.
To pay for basic state services that Alaskans have come to expect — like schools, troopers, roads and prisons — and still pay an annual Permanent Fund dividend, would require hundreds of millions of dollars more in dependable annual revenue than the state is currently bringing in, lawmakers have said.
Sen. Lyman Hoffman, a Bethel Democrat who has served in the Legislature for more than 38 years, said in February that Alaska is “probably facing its largest fiscal problem in 30 years.”
In response, the Senate majority took the lead this year in advancing three revenue measures that they say will help begin to address the state‘s structural deficit — one to tax online enterprises, most of which are based outside the state; one to impose corporate income tax on privately held oil companies; and one to reduce the per-barrel oil tax credits. Only the first was adopted by the Legislature this year, while the other two are poised for consideration when lawmakers reconvene in January.
But Dunleavy has said he will oppose those stand-alone revenue measures, despite the fact that his own revenue commissioner told lawmakers in 2021 that he would support those measures as part of a broader fiscal plan. (The governor’s office has since disavowed the commissioner’s statements.)
Leaders in the House and Senate say they are open to hearing what the governor is proposing, but Dunleavy’s ideas — coming in the final year of his governorship — may be too little, too late for lawmakers who have for months been asking Dunleavy to be more involved in their fiscal negotiations.
“This is his legacy at stake,” said Sen. Bill Wielechowski, an Anchorage Democrat who has taken the lead in crafting some of the Senate‘s revenue proposals.
Dunleavy “is on the verge of being, categorically, without question, the worst governor in the history of our state,” Wielechowski added. “If he wants that to be his legacy, that’s his choice. If he wants his legacy to be that he ran on a full PFD and now the PFD is on the verge of disappearing, and he ran as the education governor and now our schools are in shambles, that will be his legacy. It is up to him how he wants to approach the upcoming vetoes and his last year in office.”
Dunleavy began his tenure as governor promising Alaskans that he would deliver statutory dividends by slashing funding for state services. Facing unprecedented pushback, Dunleavy changed tack, calling instead for a fiscal plan predicated on new revenue measures and sideboards on how that revenue could be used.
Dunleavy called several special sessions in 2021 that yielded minimal results. At the time, Dunleavy unveiled a new dividend formula, which he has since abandoned. In 2023, Dunleavy decided against calling lawmakers into a special session amid divisions between the House and Senate leadership.
During his tenure, Dunleavy repeatedly backed off the revenue measures he promised. A plan to create a statewide lottery was abandoned early in his tenure. A statewide sales tax was promised in 2023 but never materialized. A carbon sequestration measure was introduced in 2023, but has not yet yielded the billions of dollars in revenue that Dunleavy initially touted.
Dunleavy began this year by introducing a 10-year plan that projected $12 billion in new state debt by 2035, starting with a $1.5 billion deficit for the coming fiscal year. Asked in December about his vision for balancing the budget in the long term, Dunleavy made no indication that a fiscal plan would be introduced by his administration. Instead, he said he would look to the Legislature for ideas.
In the following months, Senate majority members doubled down on their efforts to both balance the coming year’s budget and to introduce revenue measures that they thought could be palatable to the governor.
“The Senate has been working quite a bit on revenue issues,” said Stevens. “The hope is that as time passes, there‘ll be support for additional revenue that solves a lot of the problems we are facing right now.”
The three revenue measures ultimately introduced in the Senate were taken from a list presented by Dunleavy’s former Revenue Commissioner Lucinda Mahoney in August 2021.
That list included reducing the per-barrel tax credit; requiring all oil and gas companies to pay corporate income tax (eliminating a loophole that exempts Hilcorp from the tax); implementing a statewide sales tax; establishing legalized gambling in Alaska; implementing a tax on businesses that operate online, also called the “internet tax bill”; monetizing carbon offsets; and increasing motor fuel taxes, among other ideas.
“If the Legislature supports these measures, these are revenue measures that the governor supports as well,” Mahoney told lawmakers in August 2021. She resigned a year later, and Dunleavy has since distanced himself from some of the proposals, including the sales tax idea.
Dunleavy spokesperson Jeff Turner said earlier this year in an email that Mahoney “misspoke when she said the governor is willing to introduce a tax credit bill. That was not the governor’s plan.”
That has left lawmakers with limited willingness to take on politically risky revenue proposals — knowing that their efforts could be thwarted by Dunleavy’s veto pen.
“Unless the governor personally gets involved, but more importantly, puts political capital into making some hard choice, the whole thing will be for naught,” House Speaker Bryce Edgmon said Tuesday, shortly after the House adjourned.
Dunleavy on Monday promised to heed lawmakers’ request that he be actively involved in fiscal plan negotiations, but he also made light of the idea that his presence was necessary.
“I’ll be in the room. I’m willing to come in with a package, but there‘s also got to be agreement on sideboards, which is difficult for some folks,” Dunleavy said. Then he added, “I’m not the 61st legislator — Big Daddy, or whatever they want to call somebody — I am an executive. I’ve got a state to run. It’s a big state, so I can’t be here all the time.”
No matter what kind of energy we produce — natural gas, hydro, wind, solar or other legacy fuels — it is only as useful as our ability to deliver it where it is needed. The electricity we consume relies on the substations and distribution lines in our neighborhoods which is in turn dependent on high-voltage transmission infrastructure — the backbone of every electric grid. Any path forward for Alaska’s energy future depends on strengthening this backbone.
The Railbelt electric transmission system stretches 700 miles from Homer to Fairbanks powering roughly 70 % of Alaskans. Built piecemeal over decades, it remains a patchwork of transmission lines operated by five separate utilities. The resulting system is akin to a string of extension cords — some sturdy, others worn — but inadequate for our current and future needs. This fragmentation drives up costs, reduces reliability, and keeps the lowest-cost power from reaching customers when it is needed most.
Case in point: The cheapest electric energy in the Railbelt is generated by the Bradley Lake Hydroelectric plant near Homer. However, because of transmission bottlenecks, that energy can’t always flow north when demand peaks, forcing utilities to use more expensive fuel. Removing these bottlenecks will give Railbelt consumers full access to Bradley Lake’s clean, low-cost power.
Alaska’s Railbelt utilities and the Alaska Energy Authority (AEA) have identified a coordinated, multi-year roadmap to build a reliable, efficient and lower-cost energy backbone for the Railbelt. This plan can be implemented in stages, tackling the most urgent constraints first to deliver savings quickly. Some of this work is already underway.
The Sterling-to-Quartz Creek transmission link on the Kenai Peninsula is undergoing a major upgrade financed through AEA bonds to improve the system’s overall capacity and reliability and reduce power losses. New battery storage projects are also strengthening the grid by providing emergency backup and frequency control. These projects will pay dividends for decades.
In addition, AEA secured $206.5 million from a Department of Energy grant for the next phase of Railbelt modernization. The project will install a high-voltage direct-current submarine cable across Cook Inlet, creating redundancy and increasing capacity so utilities can better access Bradley Lake power. While these federal funds were thought to be in jeopardy in early 2025, they remain available. However, they require a dollar-for-dollar match to move forward.
As steps are taken to allow full access to Bradley Lake’s low-cost power generation, planning is also underway to supply more water to the dam’s generators via the Dixon Diversion project, which will boost power output by up to 50%. Getting more electricity out of existing infrastructure makes sense — especially if we can move that power to end users when they need it. Success with these projects will benefit rural energy users: because the Power Cost Equalization (PCE) program is tied to Railbelt rates, lower cost power on the Railbelt reduces rates across Alaska.
A stronger transmission system will also provide a means for new power generation to supply the Railbelt electric market. Better transmission removes the hurdle of geography, making the entire system more efficient, flexible and affordable — for whatever new generation comes online.
Finally, stronger governance will matter as much as stronger wires. We must also continue the state and utility effort to write fair operating rules for the Railbelt’s shared transmission system to ensure that these investments deliver long-term reliability and affordability for everyone connected to the grid.
Transmission may not be flashy, but it is the foundation of everything else. If we want affordable, reliable power and a stronger economy, we must invest in the infrastructure that makes it possible. What’s needed now is clear state leadership, coordinated utility action, and the backing of Alaskans to move these projects forward.
Gene Therriault served in the Alaska state House of Representatives and Alaska Senate from 1993 to 2009, and is a senior adviser of New Energy Alaska. Subsequent roles include serving as senior energy adviser to Gov. Sean Parnell, vice president of Golden Valley Electric Association and deputy director for statewide energy policy development at the Alaska Energy Authority. He lives in Fairbanks.
Brian Hickey lives in Anchorage and has over 40 years of experience working in construction, engineering and operations in the Alaska Railbelt electric grid. Most recently, he was executive director of Railbelt Regional Coordination and led Railbelt’s joint effort to obtain the $206.5 million Department of Energy grant for AEA. He is also the general manager of Seward Electric Systems in Seward.
• • •
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High School
Hockey
Tuesday
Monroe Catholic 8, Lathrop 3
West 3, Wasilla 1
South 2, Dimond 0
Wednesday
North Pole 9, West Valley 6
Delta 6, Monroe Catholic 5
West 1, Chugiak 0
Thursday
Palmer 5, Kenai Central 2
North Pole 8, Colony 2
Friday
Palmer 6, Soldotna 0
West Valley 7, Colony 2
Juneau-Douglas 4, Kenai Central 2
Kodiak 6, Service 3
Dimond 3, Eagle River 0
Saturday
Service 4, Kodiak 3
Juneau-Douglas 8, Kenai Central 2
Palmer 14, Homer 2
Wasilla 6, Chugiak 3
• • •
Volleyball
Thursday
Nelson Island 2, SISD 0 (25-20, 25-15)
Susitna Valley 3, Metlakatla 0 (25-16, 25-19, 25-14)
Martin L Olson 2, Nunamiut 1 (25-14, 23-25, 25-21)
Dillingham 3, Glennallen 1 (19-25, 25-18, 25-17, 25-23)
Shaktoolik 2, Gustavus 1 (25-12, 22-25, 25-15)
Sand Point 3, Tri-Valley 0 (25-17, 25-17, 25-13)
Aniak 2, Emmonak 0 (25-15, 25-11)
Tanalian 2, Nelson Island 0 (25-15, 25-18)
Unalaska 3, Wrangell 0 (25-13, 25-23, 25-20)
Martin L Olson 2, Scammon Bay 0 (25-13, 25-14)
Susitna Valley 3, Dillingham 1 (25-9, 23-25, 25-15, 25-21)
Shaktoolik 2, Anchor Lutheran 0 (25-9, 25-17)
Kisimgiugtuq 2, Aniak 0 (28-25, 25-20)
Unalaska 3, Sand Point 0 (25-16, 25-13, 25-23)
Friday
Scammon Bay 2, Gustavus 1 (20-25, 25-21, 25-17)
Nelson Island 2, Emmonak 0 (25-23, 25-18)
Metlakatla 3, Glennallen 0 (25-21, 25-21, 25-12)
Aniak 2, SISD 0 (25-16, 25-20)
Nunamiut 2, Anchor Lutheran 0 (25-13, 25-5)
Nunamiut 2, Aniak 0 (25-22, 25-16)
Nelson Island 2, Scammon Bay 1 (25-10, 23-25, 25-0)
Wrangell 3, Tri-Valley 1 (25-27, 25-23, 25-18, 25-10)
Tanalian 3, Martin L Olson 1 (25-13, 8-25, 25-22, 25-23)
Shaktoolik 3, Kisimgiugtuq 0 (25-14, 25-5, 25-15)
Sand Point 3, Metlakatla 0 (25-20, 25-20, 26-24)
Nelson Island 2, Kisimgiugtuq 0 (25-13, 25-10)
Martin L Olson 2, Nunamiut 1 (25-27, 25-16, 26-24)
Tanalian 3, Shaktoolik 1 (25-20, 17-25, 25-19, 25-23)
Unalaska 3, Susitna Valley 1 (23-25, 25-23, 25-22, 25-22)
Wrangell 3, Dillingham 2 (16-25, 25-21, 25-21, 20-25, 15-9)
Sand Point 3, Wrangell 0 (25-14, 25-21, 25-18)
Saturday
Martin L Olson 2, Nelson Island 0 (25-16, 25-21)
Martin L Olson 2, Shaktoolik 0 (25-22, 25-21)
Susitna Valley 3, Sand Point 1 (25-17, 17-25, 25-21, 25-17)
Tanalian 3, Martin L Olson 1 (27-25, 23-25, 25-22, 28-26)
Unalaska vs. Susitna Valley (Late)
• • •
Wrestling
Tuesday
Dimond 55, Bartlett 47
Boys – 145: Prince Bonilla (5-15), Dimond over Benjamin Fudge (13-14), Bartlett (F 3:48)
Boys – 135: Taven Carbaugh (12-13), Dimond over Aurelius Atwood (4-12), Bartlett (F 5:51)
Boys – 119: Yeng Lao (17-6), Bartlett over Joshawa McCorkle (3-22), Dimond (TF 19-3 (3:03)
Boys – 285: Denver Spencer (17-11), Bartlett over Juan Hernandez (0-0), Dimond (F 1:26)
Boys – 215: Jayce Casarez (10-4), Bartlett over Creed Cvancara (12-5), Dimond (F 3:30)
Boys – 189: Donald Goss (0-4), Bartlett over Tristan Mason (5-23), Dimond (F 4:21)
Boys – 171: Everett Monteil (6-7), Dimond over Alton Drones (4-6), Bartlett (TF 18-1 (4:33)
Boys – 160: Yaroslav Ustymenko (16-16), Dimond over Jonny Larsen (6-6), Bartlett (SV 7-4)
Boys – 152: Keller Jackson (18-6), Dimond over Isiah Anaruk (16-10), Bartlett (F 5:12)
Girls – 126: Nyah O`Neil (17-5), Dimond over Teresa Vicens (8-6), Bartlett (TF 17-2 (3:48)
Girls – 100: Kaylee Kofford (22-6), Bartlett over Aoife Stout (13-7), Dimond (F 3:56)
Chugiak 62, Eagle River 46
Boys – 135: Lukas Nuxall (7-5), Chugiak over Izzak Alonzo (7-18), Eagle River (F 3:59)
Boys – 130: Jacob Driscoll (23-10), Eagle River over Briar Otts (4-8), Chugiak (F 0:56)
Boys – 119: Archer Hicks (17-12), Chugiak over Wyatt Zeiler (14-8), Eagle River (MD 9-1)
Boys – 112: Oliver Dunlavey (13-13), Chugiak over Aiden Smith (7-6), Eagle River (F 0:44)
Boys – 103: Tanner Bailey (16-11), Chugiak over Grant Brunner (14-12), Eagle River (Dec 11-4)
Boys – 215: Braden Ott (16-5), Eagle River over Oliver Stoltze (6-6), Chugiak (F 2:42)
Boys – 189: Bryson Diola (16-1), Eagle River over Morgan Robinson (4-3), Chugiak (F 5:02)
Boys – 171: Elias Rimbert (20-6), Chugiak over Gavin Wiess (27-10), Eagle River (MD 17-5)
Boys – 160: Richard Dunlavey (21-8), Chugiak over Vern Stott (5-11), Eagle River (F 2:34)
Boys – 152: Kamdon Marchant (13-8), Chugiak over Caleb Driscoll (24-15), Eagle River (Dec 9-5)
Boys – 145: Michael Roschi (16-0), Eagle River over Mason Scow (9-12), Chugiak (F 1:46)
Boys – 140: August Rogers (16-17), Eagle River over Brock Baker (2-9), Chugiak (F 4:46)
Girls – 126: Sabreena Otts (29-8), Chugiak over Cheyenne Bobo (0-0), Eagle River (F 2:36)
Girls – 114: Talia Jenkins (22-5), Chugiak over Lillian Dwyer (17-18), Eagle River (F 3:06)
Girls – 107: Rylee Ruggles (17-6), Chugiak over Violet Roschi (29-9), Eagle River (F 5:44)
Girls – 152: Lily Boze (13-10), Eagle River over Ereale Campbell (15-17), Chugiak (Dec 6-0)
South 122, Service 24
Boys – 189: Bohdan Porter (25-4), South over Lucas Witwer (13-17), Service (F 2:00)
Boys – 152: Shane Ostermiller (19-2), South over Lucas Gross (0-1), Service (F 1:25)
Boys – 140: Benson Mishler (21-2), South over Braiden Sanchez (15-9), Service (MD 19-6)
Boys – 135: Shaw Gerondale (20-4), South over Mason Childress (8-10), Service (F 1:36)
Boys – 130: Dylan Frawner (19-6), South over Urijah Eppelsheimer (10-6), Service (TF 16-0 (2:38)
Girls – 152: Savannah Stout (27-2), South over Julie Ishnook (17-13), Service (TF 20-3 (2:21)
Girls – 114: Julia Dunlap (32-6), South over Scarlett Easton (28-12), Service (Dec 8-5)
Girls – 100: Ava Rogers (11-9), South over Rebekah Ellsworth (5-11), Service (Dec 8-1)
West 75, Bettye Davis East 53
Boys – 285: Matt Manumalealii (0-0), West over Jerome Keil-Mano (5-2), East (F 3:29)
Boys – 215: Aiden Luzano (2-8), West over Scottie Saechao (1-0), East (F 0:58)
Boys – 189: Ezekiel Alabado (2-4), East over Declan Gee (7-12), West (Dec 6-4)
Boys – 171: Ryder Thomas (11-7), West over Kalek Donnelly (8-5), East (F 1:00)
Boys – 160: Lucas Starck (15-4), West over Julian Ferreira (7-8), East (F 2:00)
Boys – 152: Liam Ferreira (6-7), East over Chris Espina (4-12), West (Dec 11-8)
Boys – 145: Damien Ambrose (14-9), West over Levi Hanks (2-2), East (F 3:33)
Boys – 140: Ramon armenta (6-3), East over Gage Williams (3-9), West (F 3:56)
Boys – 135: Mason Rhude (7-12), West over Warren Smallwood (4-1), East (SV 13-10)
Boys – 119: Jerriel Medina-Salazar (3-3), West over Eranda Dissanayake (1-0), East (F 4:35)
Boys – 112: Colter Campbell (13-1), East over Juan Rojas Arismendy (11-3), West (TF 19-2 (2:13)
Girls – 165: Kenya-Marie Bruno (17-2), East over Laura Souza (1-4), West (F 0:49)
Girls – 145: Bridey Lee Piscoya (6-10), West over Victoria Orozco (6-4), East (F 3:36)
Girls – 132: Lily Oldham (18-7), West over Aniyah Smalley (5-5), East (F 1:51)
Girls – 120: Ivy Shanklin (3-9), West over Molly Antijunti (0-1), East (F 5:13)
• • •
College
Volleyball
Thursday
UAF 3, UAA 0 (25-21, 25-18, 25-15)
Friday
Point Loma 3, UAF 1 (25-22, 25-20, 20-25, 25-18)
• • •
Women’s basketball
Thursday
Western Oregon 82, UAF 24
Saint Martin’s 69, UAA 60
Saturday
Saint Martin’s 74, UAF 37
Western Oregon 77, UAA 69
• • •
Men’s basketball
Thursday
Saint Martin’s 78, UAA 63
UAF 80, Western Oregon 70
Saturday
Saint Martin’s 66, UAF 56
UAA 64, Western Oregon 56
• • •
Hockey
Friday
Stonehill 3, UAA 2
Saturday
UAA vs. Stonehill (Late)
UAF vs. Grand Canyon (Late)
PALMER — High winds knocked out power for thousands in Mat-Su on Saturday morning with gusts forecast up to 80 mph in places before the weekend ends.
As of 9 a.m., there were nearly 17,000 members without power, according to Matanuska Electric Association. Major outages included Knik-Goose Bay and Fairview Loop roads. Another large outage knocked out more than 2,000 members from Palmer to Hatcher Pass.
There were reports of trees down on some side roads and damaged railroad crossing gates, as well as at least one small brush fire sparked by a downed power line.
By 10 a.m., the Palmer Airport had recorded a gust of 84 mph while the Wasilla Airport and the Glenn Highway near the Parks Highway had seen gusts of between 70 and 74 mph, according to weather station observations.
A high wind warning from the National Weather Service is in place until 11 p.m. Sunday for the Matanuska Valley including Wasilla, Sutton, Big Lake, Chickaloon and Palmer. The warning calls for northeast winds of 30 to 40 mph with possible gusts up to 80 mph. Wind chill could drop to between minus 10 and minus 20 degrees by Sunday evening, the agency said.
Power outages began early Saturday morning.
“We have multiple crews out in the field and are calling in more as they become available. Winds are not expected to die down today and will last into at least tomorrow evening,” Matanuska Electric Association said in a Facebook post, encouraging people to avoid downed power lines. “Please stay safe – there is a lot of debris scattered outside.”
Wasilla police warned that numerous traffic signals were dark Saturday morning due to power outages. The Matanuska-Susitna Borough announced the central landfill near Palmer is closed Saturday due to high winds.Palmer airport officials on Friday urged pilots to secure all aircraft.
A high wind advisory for the Anchorage area and the northwest Kenai Peninsula — including Nikiski, Kenai, Soldotna and Sterling — remains in effect until 11 p.m. Sunday. Forecasters expected north winds of 20 to 30 mph and gusts up to 50, and wind chill dropping to between minus 5 and minus 15 by Sunday night. Knik Arm, West Anchorage and areas along the coast of northern Cook Inlet were likely to experience the strongest winds, according to the advisory.
This is a developing story. Check back for updates.
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