Midway through session, Alaska lawmakers looking for fiscal fix

JUNEAU — Alaska legislative leaders say they are committed to taking major steps to address the state’s multibillion-dollar budget deficit this year, even if that means working beyond 90 days.

House and Senate leaders say they would like to finish on time in April but are in Juneau to do a job.

“Honestly, if it takes going over a little bit in order to do the right thing for the future of Alaska, personally, I’m prepared to do it,” House Speaker Bryce Edgmon told reporters Tuesday, two days before the scheduled 90-day session reached its midway point.

Here are some things to watch for:

Permanent Fund

Many legislators and Gov. Bill Walker see a use of earnings from Alaska’s oil-wealth fund, the Alaska Permanent Fund, as unavoidable to help the state dig out of its hole. The mere suggestion of this would have been seen as political suicide not that long ago.

While fund earnings have long been available to lawmakers to spend, they have been reluctant to go there for fear of being accused of raiding the fund. The annual dividend Alaskans receive from the state’s oil wealth comes from fund earnings.

The state is in its fifth year of deficits, a problem exacerbated by chronically low oil prices, and Legislative Finance Division Director David Teal has said neither cuts nor taxes appear capable of filling the hole.

In a presentation to lawmakers, Teal called the use of earnings the most powerful tool available.

Differences

During a committee hearing on a permanent fund bill Tuesday, Sen. Mike Dunleavy, R-Wasilla, proposed calling for an advisory vote of the people on changing the dividend calculation and the amount available from earnings. That proposal failed.

Sen. Cathy Giessel, a fellow Republican who voted against it, said special election turnout can be unpredictable and said she wasn’t convinced people would understand the ramification of a yes or no vote.

All the permanent fund proposals currently in play would annually draw from fund earnings a percentage of the fund’s market value and change how dividends are calculated.

A bill from the Senate Finance Committee pairs that concept with a proposed new limit on future spending, a priority for the Senate’s GOP-led majority. A House Finance Committee permanent fund bill calls for reinstituting a personal state income tax.

Compromise?

The challenge will be avoiding a repeat of last year, when gridlock prevailed.

The Senate has said it hopes to lop $300 million off the budget for next year, and Senate Majority Leader Peter Micciche has said he’d like to see a focus on passing a permanent fund bill before delving into politically divisive topics, like taxes.

The House majority, composed largely of Democrats, is eyeing changes to oil tax and credit policy along with a broad-based tax and permanent fund bill as part of a comprehensive fiscal plan.

The House majority has faced criticism from minority House Republicans over its handling of the budget, which is still being worked on.

Edgmon said he has a good relationship with Senate President Pete Kelly.

“The important part, and the thing that heartens me, is, we have a very good dialogue going,” Edgmon said.

More in News

The Norwegian Bliss arrives in Juneau on Monday, April 14, 2025. (Jasz Garrett / Juneau Empire file photo)
Ships in port for the week of May 11

This information comes from the Cruise Line Agencies of Alaska’s 2024 schedule.… Continue reading

(Michael Penn / Juneau Empire file photo)
Police calls for Sunday, May 11, 2025

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Saturday, May 10, 2025

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Friday, May 9, 2025

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Thursday, May 8, 2025

This report contains public information from law enforcement and public safety agencies.

Republicans have toiled under House Speaker Mike Johnson to find $880 billion in savings over a decade and assemble a number of cuts large enough to meet that goal. (Tierney L. Cross / For The New York Times)
Republicans propose paring Medicaid coverage, but steer clear of deeper cuts

House panel’s plan would still leave millions without health coverage or facing higher costs.

Axel Baumann films and Max Osadchenko captures sounds of Juneau Alaska Music Matters students performing a “Gratitude” concert at the Sealaska Heritage Institute Clan House on Thursday, May 8, 2025. The event was a wrapup performance after the film crew followed JAMM participants for two weeks as part of a feature-length documentary. (Mark Sabbatini / Juneau Empire)
Filmmakers seek to share cultural lessons of Juneau Alaska Music Matters with a wider audience

Crew spends two weeks with students after following similar program in Texas for full-length documentary.

A Chinook salmon is seen in an undated photo. (Photo by Ryan Hagerty/USFWS)
Conservation group lawsuit seeks to speed listing of Alaska king salmon under Endangered Species Act

Lawsuit asks a judge to order national fisheries service to “promptly issue” decision on petition

State Sen. Forrest Dunbar (D-Anchorage) speaks during a candlelight vigil Wednesday at the Alaska State Capitol by participants calling upon federal lawmakers not to cut Medicaid funding (Mark Sabbatini / Juneau Empire)
Proposed Medicaid cuts in Alaska: A protest, a Senate resolution and where things currently stand

Some Republicans in D.C. balk at full $880B reduction; work requirements, other trims still in play.

Most Read