We are approaching day 100 of the legislative session, which means there is just over three weeks left in the regular session. The annual Legislative Skits was held last night in Juneau at Centennial Hall. Minus some AV and tech issues, it was a fun and packed event. The House and Senate finally transmitted the operating and capital budgets to one another. The Senate is continuing to cut spending to avoid a savings draw. In a joint session on Tuesday (4/22/2025), the Legislature failed to override Governor Mike Dunleavy’s (R – Alaska) veto of House Bill 69 – an education bill that would have raised the Base Student Allocation. The Senate responded by using a different House bill as a new vehicle for a second attempt at getting an education bill passed. 

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Senate continues to work on eliminating FY2026 budget deficit

The following is an excerpt from this week’s edition of the Alaska Political Report. You can click here for more information about the Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. Our coverage of the budget starts with the governor’s proposed budget, and we track everything in detail through the entire process. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

On Wednesday, April 23, the House and Senate exchanged the operating and capital budgets, a good sign that we may avoid the turducken budgets of the last several years and, like last year, see a more traditional budget package.

The House will now have their opportunity to make changes to the capital budget. The House Finance Committee has not yet put out a committee substitute of the bill but, based on available revenue, it seems unlikely they will add significant amounts to capital budget. The version that left the Senate was austere and only included minimal spending beyond required federal match. The appetite, and fiscal capacity, for district projects is at a historic low.

The Senate Finance Committee introduced a committee substitute of the operating budget on Thursday. Their version incorporated the recommendations of the Senate subcommittees and made several language changes. The Senate’s, pre-dividend, operating budget is about $100 million Unrestricted General Funds (UGF) larger than the Governor’s. However, once you consider that $179 million in the Senate budget is just to bring K-12 funding to the same per-student level as the previous year, the Senate budget represents a significant reduction in agency spending from the Governor’s proposal.

When you add in the reduced Permanent Fund Dividend (PFD) payment and capital budget, the Senate’s current budget has a deficit right around $100 million. That’s a roughly 94% reduction from the $1.7 billion deficit proposed by GOP Gov. Mike Dunleavy.

The biggest reductions in the new budget version come from reduced community support, both through a drop in community assistance and school bond debt reimbursement. For larger communities, the impact of the two reductions will be significant. For example, the Municipality of Anchorage stands to see about $6 million less in state support in FY26 under the Senate budget, the Mat-Su Borough (including cities) about $4.5 million, and the Fairbanks North Star Borough (including cities) a bit over $2 million.

If you would like to see the rest of this section, as well as our more detailed coverage of the legislative session, consider subscribing to the Alaska Political Report. Email jeff@akpoliticalreport.com for a copy of the latest special report. 

Groundhog Day with education bill

After the Legislature failed to override Governor Dunleavy’s vote of HB 69, the Senate got right to work with another education bill. The override vote was 33-27, a full seven votes shy of the 40 needed.

Last year, the Legislature failed by just one vote to override Dunleavy’s veto of Senate Bill 140. But in addition to some policy changes, that bill only increased the Base Student Allocation (BSA) by $680. HB 69 had no policy changes and raised the BSA by $1,000, making it unacceptable to many of the Republicans who voted to override the veto of SB 140 last year. Some felt $1,000 was too much of an increase and others wanted policy reforms as well. 

Days after the Legislature failed to override vote, the Senate Finance Committee moved a new version of House Bill 57 from the committee. The bill, sponsored by Representative Zack Fields (D – Anchorage), started as a policy bill to address use of cell phones in schools. It has now been expanded to add several new measures:

• A $700 increase to the Base Student Allocation, a cost of roughly $177 million UGF per year
• A 10% increase to pupil transportation, about $7 million UGF
• Language directing the Department of Education and the Department of Labor to track the success of graduating seniors
• An expansion in the ability for charter schools to apply for approval from local school boards
• Establishes a task force on school funding

The bill was read on the Senate floor on Friday (4/25/2025) and is scheduled for amendments tomorrow. The plan seems to be similar to what happened with HB 69, except this time with some policy changes. Because it’s a House bill, the House can opt to concur with the Senate changes when it is sent back. Then it would go to Governor Dunleavy. This is what happened with HB 69. 

But Dunleavy is demanding several changes in order for him to sign it. If HB 57 stays more or less as it is and Dunleavy decides to veto it, the override vote will be much closer, and could even happen. This is because the $700 BSA increase is more palatable to many than $1,000 and because the policy changes will make it harder for some moderate Republicans to vote not to override.  

What is noteworthy is the Legislature is clearly sending a message to Dunleavy. On Tuesday (4/22/2025), Dunleavy submitted a new education bill to the House and Senate. Both bills were referred to committees but have not yet had a hearing, and probably won’t. Legislative leadership seems to have basically given up negotiating with Dunleavy.

HB 57 looks like it’s going to pass the Senate this week. If this House concurs with the Senate changes, the bill will be in Dunleavy’s court. Unless he gets everything he wants, which is not going to happen, he will probably veto it. The question is will the Legislature be able to override the veto? It will be very close. 

Other Happenings 

Nice photo of the last five Speakers of the House taken this week. John Harris, pictured on the right, was speaker from 2005-2009. Mike Chenault, next to Harris, was speaker from 2009-2017. Representative Bryce Edgmon (I – Dillingham) was speaker from 2017-2021 and has been speaker again since January 2025. Representative Louise Stutes (R – Kodiak) was speaker from 2021-2023. And Representative Cathy Tilton (R – Wasilla) was speaker from 2023-2025. It would have been awesome if Pete Kott, who was speaker from 2003-2005, was there too! 

During a Legislative Budget and Audit Committee hearing this week on the gasline, Chenault, who is on the Alaska Gasline Development Corporation board, told the committee, “I believe if the Legislature gets involved, this project will go away.” He is absolutely correct. While oversight is a good thing, it’s clear that many of them want to just kill the project because they either don’t like Glenfarne or are mad their friends did not get a piece of the action. If we were serious about the project, the state would commit $5-10 billion from the Permanent Fund to show we have some skin in the game. Instead, most of our leaders just want someone else to pay for everything. This is one of Alaska’s biggest problems. 

This should be interesting. 

This Week’s Loose Unit 

There were definitely a lot of good candidates this week. But one really stood out. This week’s Loose Unit is the Legislative Council, specifically the chair, Representative Sara Hannan (D – Juneau). After their dumb decision to implement a metal detector and x-ray machine to access the Capitol because of Juneau’s vagrancy problem, the list of people with key job access keeps growing.

In addition to legislators, legislative staffers, family of legislators, and members of the media who pay for a press desk, the list of people who have been given key jobs keeps growing. Here are some examples: 

• commissioners
• deputy commissioners
• legislative liaisons
• Alaska Court System personnel
• Office of Management and Budget personnel
• University of Alaska personnel
• people from quasi-state entities like
  • the Alaska Gasline Development Corporation
  • the Alaska Railroad
  • the Alaska Permanent Fund Corporation
  • the Alaska Industrial Development and Export Authority

The list will keep growing. Very loose. Just remember one thing, it’s not about security, it’s about trying to stop vagrants from coming into the Capitol. It’s also security theater. People come in and out of the side door of the Capitol all the time. There is no security there. If someone really wanted to do something crazy, all they would have to do is wait by the side door and walk in when someone walks in or out. Does anyone really expect a twenty-something legislative staffer or intern to tell some psycho they can’t go in? 

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.