Lawmakers return to the Alaska State Capitol on Tuesday and, as always, they’ve got a long agenda to tackle, from health care and energy to the state’s persistent budget struggles.
Alaska Public Media’s state government reporter, Eric Stone, will be tracking the session in Juneau. He joined Wesley Early on Alaska News Nightly to give a sense of what the session will bring.
The following transcript has been lightly edited for clarity.
Wesley Early: So, Eric — lots to do, only four months to do it. What are lawmakers prioritizing ahead of the session?
Eric Stone: Well, Wesley, as you said, there’s a lot to do. And there will always be some surprises. But what’s not a surprise is how difficult the budget will be this year. We heard a lot last year about how this might be a painful year.
Maybe this will set the tone — last year, we had a $1,000 Permanent Fund dividend, the smallest ever when you adjust for inflation. And this year, what I keep hearing is that even a $1,000 dividend will be a challenge. Here’s Fairbanks Republican Rep. Will Stapp — he sits on the House Finance Committee.
Rep. Will Stapp, R-Fairbanks: At the current level of spending and revenue, I don’t see how that’s possible without large savings draws, and I don’t know how people are going to feel about that.
ES: This has been an issue for years, of course. Lawmakers and the governor have worked to cut state spending in a variety of areas, though there’s some dispute about how much there is left to cut.
Stapp says he’d like lawmakers to take a closer look at department budgets with something known as zero-based budgeting. Basically, rather than starting from a baseline of “what did we spend last year,” this would be starting at zero and building the budget from scratch. Stapp included an amendment in last year’s budget asking the governor’s office to try that for one department of their choice, but he says as far as he can tell, that didn’t happen.
So he says he’s renewing his efforts this year.
Stapp: Because you don’t really want to tell people the state needs a lot more money in terms of taxes … when you can’t really articulate where the money goes initially and what the money does.
ES: Gov. Mike Dunleavy’s budget, as usual, contains what he calls a statutory PFD, $3,800 or so. But that, and the expenses they have to catch up on from this current year, mean that the governor’s budget would require spending more than half of what the state has in savings.
But it’s a bit incomplete. The governor has said he plans to introduce a fiscal plan. Last we heard, when he released his budget in December, it was still a work in progress. But the governor has his last State of the State speech this session — usually those come pretty early in the session, so a fiscal plan would be something to watch for there. Then again, a few years ago, Dunleavy said he was planning to introduce a sales tax and never did.
Democratic Anchorage Rep. Andrew Gray says he hopes Dunleavy does propose some kind of tax.
Rep. Andrew Gray, D-Anchorage: He’s not running for reelection, so he can afford to take that risk …. He could, going forward into the future, have established a reliable source of revenue to fund our state. I mean, there could be no more worthy legacy for him. It would be monumental.
ES: Gray says he’d prefer an income tax — he says that would be fairer to low-income Alaskans — but if the governor proposes a sales tax, Gray says he thinks lawmakers would have to find a way to get it passed. He says he thinks lawmakers on both sides would be willing to discuss just about any solution to secure the state’s financial future.
But it’s an election year, and a fiscal plan requires some hard votes, so it’ll take some gumption for lawmakers and the governor to actually come together rather than kick the can down the road yet again.
WE: Alright, so we have the perennial budget debate with a bit more urgency this year. That’ll be something to watch. What else is on your radar?
ES: This one came up recently — health care. You might have heard of this Rural Health Transformation Program. That’ll send more than a billion dollars to the state over the next five years to, essentially, improve health care. There are a bunch of restrictions on how it can be spent, and most of that decision-making will happen inside the executive branch in the Department of Health.
But Health Commissioner Heidi Hedberg said on a call with reporters recently that there is a role for the Legislature to play. To make Alaska’s grant application more competitive, the state said it would do a bunch of things by the end of 2027. Those include expanding what pharmacists are allowed to do, and joining a variety of “license compacts” for EMS workers, nurses and a few others. The deal is, if you’re licensed in some states, you can also practice in Alaska without a need for retraining.
That’s an issue the Legislature has not made a focus in past years, though there are some pending bills. And Gray says he could see those scrambling caucus lines.
Gray: In terms of where people land and what they support, I think that it’s not going to be clear-cut. It’s not going to be a majority-versus-minority. I think that that it’s going to be all over the place.
ES: But Gray, who is also a physician assistant, says he supports the policy changes.
Stapp, for his part, says he’s on board — he says he’s still reviewing what all is needed, but he says from what he’s seen so far, he doesn’t see why those policy changes will be a problem.
WE: Finally, Eric, what about the Alaska LNG project? Are you expecting movement on that front?
ES: That one is interesting. The gas pipeline developer, Glenfarne, has yet to announce what’s known as a final investment decision — a green light to move forward. Lawmakers heard last year from its consultants about a variety of changes they could make to ensure the project is profitable enough and stable enough to go forward. We could see some movement on that — for instance, Gov. Dunleavy says he’d like to see lawmakers offer some property tax relief to the gas line project to help it pencil out. And a lot of lawmakers say they support efforts to help the gas line move forward — but I think they’ll approach that question with some caution. They don’t want their home communities to get taken to the cleaners, so to speak.
