Just ten days remain until the end of the regular session. Surprisingly, things seem to be moving along rather smoothly. The House failed to concur with the Senate’s changes to the operating budget, sending it to a conference committee. The House is scheduled to hear amendments to the capital budget tomorrow. The House also spent all day on Saturday (5/10/2025) hearing several bills, including the pension bill. A bill targeted at the Department of Revenue for not cooperating with the legislative auditor quickly passed the House and Senate. Governor Mike Dunleavy (R – Alaska) sent a bizarre letter to all the finance co-chairs asking to pull all his budget amendments as the session nears an end. And the race for governor in 2026 officially got underway this week. 

A friendly message and reminder to all our readers. The Landmine is made possible by myself and a team of awesome Alaskans. I have been covering the legislative session in Juneau for the last six years and am back now for my seventh session. If you enjoy the content we provide, please consider making a one time or recurring monthly donation. You can click here to donate. We have a system that makes it super easy. We would really appreciate it. And thanks to everyone who has been supportive.   

Budget headed to conference committee 

This week the Senate finished it’s work on the operating budget and sent the bill to the House for concurrence. The House rejected the Senate’s version, which triggers the conference committee process. Once the Senate fails to recede from their amendments, a conference committee will be appointed. It’s comprised of three members from each finance committee, two majority members and one minority 

Conference committees operate under a number of rules. The committee is generally limited to making changes based only on items in one of the bill versions, but the committee can eliminate an item even if it appears in both budgets at different funding levels. Traditionally, they land on a funding level between one budget or the other. Generally, without seeking approval from the full Legislature, they can’t add in new items not included in either budget.

The bottom-line difference between the two budgets is small, but on an agency by agency basis there are significant differences. The House chose to include many individual increases to agency budgets balanced by a single, large, unallocated reduction. The Senate eliminated most budget additions and only made a few budget additions over the House.

That difference in philosophy and specific reductions verses broad unallocated cuts is likely to be decided early in the conference committee’s deliberations. Given constitutional concerns expressed by the Legislature’s legal counsel regarding unallocated reductions, it seems likely the Senate’s approach will prevail, though the final budget could still include a smaller unallocated reduction.

On Tuesday (5/7/2025), Governor Dunleavy sent a letter to the finance co-chairs expressing concerns about the state’s fiscal situation, referring to the $70 million (1%) reduction in projected revenue released by the Department of Revenue two months ago. The letter expresses a desire to roll the budget back to the adjusted base level. The letter lacks many specifics. It seems more like a white flag after the Senate gutted many of his amendments anyway. 

Bills on the move before the end of session

On Saturday, the House passed Senate Bill 183 by a vote of 31-7. The bill aims to clarify the penalties for hindering the Legislative Budget and Audit Committee. This stems from the Department of Revenue refusing to cooperate with the legislative auditor since 2020 on an audit of tax assessments and settlements. Basically the Legislature has been unable to audit tax settlements, which could be in the tens or hundreds of millions of dollars over the last several years. Unbelievably, all of the information is confidential by law. So no one except a few people in the executive branch even know what’s going on.

The bill was introduced by the Senate Rules Committee on April 22 and after one rules committee hearing, passed the Senate 19-0. on May 5. After one rules hearing in the House, the bill easily passed the House. When the Legislature acts this quickly and decisively on something, you know there is a problem. After the House takes up reconsideration tomorrow, the bill will go to Governor Dunleavy. He will look really bad if he vetoes this one. 

Senate Bill 113 is Senate Rules Committee bill that aims to apply Alaska’s corporate tax to highly digitized businesses, like Amazon or Netflix. It passed the Senate by a vote of 16-4 on April 15 and was sent to the House. It passed the House on Wednesday (5/7/2025) by a vote of 26-14. The House did not amend the bill, meaning it is now awaiting transmittal to Governor Dunleavy. This is the bill that was required to pass to fund the reading grants included in House Bill 57, the education bill that was passed last week.

There were some concerns that the language in the bill may unintentionally impact businesses, like banks. Several lobbyists tried to get the bill amended to clarify the language, but were unsuccessful. The Department of Revenue was unresponsive to the Legislature and lobbyists who tried to have them assist with the fix.

In a meeting Thursday (5/8/2025) morning with Alaska superintendents, Governor Dunleavy said the bill has constitutional issues and that he does not want reading grants tied to it. If he vetoes the bill, the override threshold is three-fourths, or 45 votes, as it is a revenue bill. Due to the timing of the end of session, the constitutional clock for him to act (15 days during session, Sundays not included) will expire after the session is over. So if he vetoes it after adjournment, which is likely, the Legislature won’t be able to consider a veto override until next January, unless they come back for a special session, which at this point is not likely. 

House Bill 78 is a House Finance Committee bill that aims to bring back a defined benefit pension for state employees. Since February, the bill has been heard ten times by the finance committee. After hearing several amendments, it was passed out of the committee on Wednesday. The House heard amendments to bill on Saturday. It’s in third reading on tomorrow’s calendar. The House will likely pass the bill tomorrow and send it to the Senate. With limited time left in this session, the Senate won’t take the bill up until next year’s session. 

House Bill 57, the education bill that passed last week by the House and Senate, is still on Governor Dunleavy’s desk. It passed the House 31-8 and the Senate 17-3. The bill was transmitted to Dunleavy on May 2. He has until May 19 to act. He can either sign the bill, veto the bill, or let it go into law without signature. He will likely veto the bill as it does not include the education reforms he has been demanding.

The last day of the regular session is May 21, meaning even if Dunleavy vetoes the bill on May 19, the Legislature will still have two days to hold an override vote. At this point the 40 votes required for an override are there, with even some to spare. However, things could change as political pressure is put on Republicans who plan on voting to override. 

Other Happenings 

The 2026 governor’s race is underway. Because Governor Dunleavy is termed out, it will be an open seat. This is the first time this has happened since 2002 when former Governor Tony Knowles was termed out. Former Republican Senator Click Bishop and Lieutenant Governor Nancy Dahlstrom (R – Alaska) both filed letters of intent this week. Bishop served in the State Senate from 2013-2025. He did not seek re-election last year as it was widely thought he planned to run for governor. Dahlstrom served in the State House from 2003-2010 and has served as lieutenant governor since 2022.  

Bernadette Wilson, a Republican activist, also filed a letter of intent this week but she did not indicate an office. There’s been some chatter that she may run for governor, but I think it’s more of a publicity stunt. Because of our new voting system, each candidate has to pick a running mate. But the deadline to choose someone is not until the filing deadline, June 1, 2026.  

The end of session party for the legislative bowling league was pretty fun! 

This is one of the stranger emails I have seen. Governor Dunleavy introduced a bill but the Department of Law said the Legislature needs to figure it out.  

This Week’s Loose Unit

This week’s Loose Unit is Governor Dunleavy. Big Mike has been busy this week. First, his legislative director, Jordan Shilling, sent a letter to commissioners informing them all high level executive branch officials need to stay out of the Capitol until the end of session unless they get permission from the chief of staff. It’s not uncommon for people to avoid the Capitol at the end of session, but this email is rather loose. The Senate Finance Committee was not happy this week when Lacey Sanders, the head of the Office of Management and Budget, did not show up for a hearing on union contracts. Very loose. 

Then, Dunleavy sent out this letter to the heads of the finance committees saying that due to the fiscal situation, he’s pulling all of his budget amendments. The loose part about this is the process is basically done. The Senate already pulled out the majority of his amendments, so it looks like he is just trying to save face. With session ending soon, this letter demonstrates classic Loose Unit behavior.  

Finally, he announced a hiring and travel freeze. This seems nice but Dunleavy, several commissioners, and heads of other state agencies are in D.C. this week at an investment conference. The trip was probably booked weeks or months ago, but shows this administrative order is probably not that serious. It’s also loose that this came out at the end of session, two months after the Spring Revenue Forecast came out showing lower projected revenues. 

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.