Senate Majority Presser, 4/29/26, 12:50pm

Good morning here. This today is the 100th day of the session, 21 days, 3 weeks left to go. And before we wrap everything up, Joining me today are Senators Giesel, Wilkowski, Stedman, Kiel, and myself, Stevens. So last week, Senate Finance Committee released its first version of the operating budget, and work is going on now into some of the finer details as they move forward toward final passage. The committee, Finance Committee, has met their goal of balancing The operating budget is $73 per barrel oil and reserving about $50 million, $50 million of supplemental spending needs for next year.

A truly responsible and forward-looking approach. Senator Sedman, can you walk us through the spending plan and highlights some of the key priorities you're facing? Well, thank you, Mr. President. I could, but I would ruin the show this afternoon. So this afternoon we're going to have some amendments on the operating budget, 130, some adjustments, fine-tuning, and then it'll be put on the table for overnight.

We are not too far apart, I don't think, from the House where we can get through conference and come to compromise. We have not changed our objectives of $73 a barrel, and we're holding, trying to hold everything within those bookends. Even though oil today is at $110 or some number north of that. We don't know what's coming this summer and into the fall. So this budget doesn't get enacted till July 1st.

So oil prices are quite a ways out that we have to guess. So we're going to be conservative. We should be done on time. And I think the public will like what they see this afternoon when we do a few tweaks to the budget. So if you want to know the finer details, tune in to—.

Stay tuned to the show, it's getting better. Good. Thank you, Senator Stevin. So yesterday, as you know, the Senate passed House Bill 78, which returns public employees to a defined benefit pension plan. Been a top priority of our caucus in the Senate.

And also the House majority for the past 4 years. Pretty difficult process, as you know, to reach this point, but the resulting bill is one many of us believe serves both the employees of the state of Alaska and their long-term health benefits. Senator Giesel, you and of course Representative Kopp had been right at the forefront of all of this for years. Could you walk us through the key components that, that you see in this new pension plan and what it means for public employees? Well, first of all, I'm smiling a lot because I just got texted that the House concurred.

So yay, it's done. We still have one more stop though. We have the big red pen potentially. So we'll see what happens. Yes, I cannot, I cannot agree Senator, with all due respect, that I haven't— that I've been at it for years.

I haven't been at it for years, certainly for the last 4 years. Senator Kiel has been at it for much longer than that. This was the 34th attempt over the last 20 years, and so we are pleased that it was successful, and it was designed to be very a modest and yet secure pension for retirement. And it got some adoption, it had some amendments made on the floor that kind of made it a little bit more moderated. Choice was put in for employers, which is a big deal.

So we'll look forward to seeing how the governor receives it and if we can move this ahead. Of course, the effective date has moved out now to July 1st. 2027, And that was in deference to the Division of Retirement and Benefits, who said they would need some time to write the regulations. So that's fine. Just hoping our public employees will patiently wait another year and 2 months.

Thank you, Senator Gießler. Senator Giel, you've been working on this as well. Any comments you have about the pension plan? Well, thank you, Mr. President. This is your 20, and so obviously I've been smiling ear to ear since yesterday's vote.

This afternoon in the House is great news. I think this is— this bill really moves the needle. There are no perfect solutions to any complicated problem, but this is a material difference. And as you noted, our caucus had a major goal to repair Alaska's retirement system. This probably isn't the only bill that's needed to really make it great.

But this will make it worlds better and it will genuinely help the public sector, both the state and the cities and the school districts deliver the services Alaskans need more efficiently, more effectively. So I'm very optimistic. I'm happy to loan the governor the blue pen, the black pen. I'm sure I could find a purple one, any color but red. Okay.

Thank you, Senator Kiehl. Well, great. So we reached the point now where I would like to take any questions, try to answer any questions you may have.

Noah. Will Courtney, Alaska's News Source. Senator Giesel, I know I ask you a lot about the LNG pipeline. We're approaching week 3, the end of week 3 of days and weeks of discussion. Tell me a little bit about now that we're ending this kind of discussion, where your version of the bill currently stands and what the next steps are as we really approach the end of session now.

Will, we are meeting with stakeholders. We, of course, we've had some public testimony from them, but we're meeting with them on specifics that they have concerns about. We are hearing those concerns and, where possible, making modifications on issues in the bill itself. And that will be ongoing this week. We do enjoy our meetings with our consultants.

I don't know if you saw yesterday's meeting, but Gaffney Klein presented. And one of the slides that they— that he presented on had to do with the corporate income tax, which we do have that in our bill, the S corp tax. And he opined that that corporate income tax, that by year 50 would be bringing in $80 million in corporate income tax. Well, we have some very sharp pencils on the committee, Senator Wilkowski being one of them, and he took the 70/30 equity 10% return on equity and, um, construed that that would be an $8 billion profit, uh, that year in 2050. So that really enlightened the committee.

Um, so we're, we're looking at that now. Interestingly, Mr. Fulford said, well, let me go back and recheck those numbers. I did this quickly and I may have had some errors. What that actually underscores, this whole topic, we've been given this and told to act quickly, and what we're concerned about is we don't want to make those kinds of math errors. We want to make sure that we're getting this as right as possible.

So yes, it may seem like it's taking a long time. We're meeting every day, uh, we work on this bill every day. And so we're going to keep doing that. We're hoping to get it to Senate Finance soon. No specific date has been reached.

Thank you, Senator. Senator Vella Calcio. Just on my recollection was the property— the corporate income tax number for the developer was $800 million. Pardon me, did I say 8? Yeah, 80.

80. So pardon me. Yeah. So just when you extrapolate that, it came out to an $8 billion profit per year, which, you know, we've been told all along this project should have around a 10% return on equity. And when you again do the math and you figure out the equity portion is about $15 billion, 70-30 split, that equates to a rate of return on equity of over 50%.

And so, you know, when we're asking the people of Alaska to take, what could be a billion-dollar tax cut, we should be asking, you know, is a 50% return on equity maybe where the cut should be made instead? And also, when we're asking consumers to potentially— you know, one of the other things we heard yesterday was the ratepayers in South Central could potentially be paying $30 in MCF, depending on the scenario. So right now, they're paying about $10. So we've got to get this right, protect Alaska ratepayers, protect Alaska property taxpayers, protect the treasury. And so I think the hearings are very informative and want to move the bill.

We all want a pipeline, but we've got to get it right because this is huge, huge money at stake here for Alaskans. Thank you, Senator McCaskill. Senator Giesel. Could I just add something to that? Please.

You know, one of the other things that We are looking at the numbers that Senator Wielekowski and I just cited, that $800 million corporate income tax and so forth. Those numbers were calculated on an estimate of a dollar per MCF cost of gas. Well, on the North Slope, the Department of Natural Resources— excuse me, the Tax Division— actually looks at prevailing value of the sale of gas on the North Slope right now to each other as they use it for production, and today that's about $2.99. Cents or $3. So, and that's on the slope before it even gets into a pipeline.

So a lot of interesting numbers that aren't quite lining up. Thank you, Senator Giesel and Senator LaCassia. Well, we are facing a time issue. The clock is running out with only 3 weeks left. So we're doing the best we can to— the Senate resources thoroughly going over it, the all the questions that you're facing and trying to get answers.

And then from there it'll go to Senate Finance. Noah. This is Eric Stone with Alaska Public Media. I have a question about the Senate Committee Substitute for the mental health budget. Um, in the mental health budget, uh, there is a— the governor proposed this reduction of, uh, of funding for the Alaska Housing Finance Corporation's Homeless Assistance Program.

Uh, last year it got about $10.1 million in total funding. This year it's looking at about $5 million in funding. I've gotten some outreach about this, and I'm curious if you guys are looking at increasing that to match last year's, or if— I'm just sort of curious, like, what the status of that particular line item is. It's funded out of the Alaska Housing Finance Corporation dividend, uh, for the most part, and, uh, curious if you guys are open to putting that back in the budget. That'd be an increment from the governor's proposal.

Yeah, thank you. Mr. President, you are correct. The mental health submitted a 10— roughly a $10 million request. The governor reduced it to 5. We're taking a look at that, and I invite you to the Finance Committee here shortly to see us unfold some of our changes.

All will be revealed. All will be revealed. It does not go unnoticed. So We're going to go online to Becky Bohr with the Associated Press. Hi, Becky, can you hear us?

Yes, thank you. I have a two-part question. The first is, if the governor vetoes the elections bill, SB 64, how are you all interpreting convening immediately in joint session? Would you wait until the joint session to consider appointees? Be, or would it be before that?

The second part of my question is, are there any cabinet members that you have particular heartburn with and think could have a hard time being confirmed?

Well, maybe I'll take that second question to start with. On, on cabinet members, we have not had a caucus on the individuals confirmation. We've been talking about it, but no, I don't think there's any decisions. So, you know, people will vote their minds and vote the way they want, and we'll see how that turns out. Senator Likowski, on the elections, can you address that?

Thank you. You're asking about how quickly the legislature must act on a veto override, and the Constitution says immediately. And we've asked legislative legal about that, and they— not on this bill, but on other bills in the past, because this issue does come up occasionally. And I think there have been 19 occasions in the past where the legislature has not done it within a few days. And you could interpret immediately to be like that day or the next day.

I think, I think legislatures have pushed it out as far as a couple weeks. But I, you know, I can't speak on when exactly we would do it, but my hope or my expectation would be if, if it were to happen, it would be within A couple days, probably.

Yes, sir. Senator Keogh. Certainly, some of the governor's cabinet appointees have had confirmation hearings. Others have their hearings forthcoming. So members will hear from them and make up their minds.

There is some concern, I know, among a number of legislators about two departments that have had acting commissioners for quite some time. The entire session so far and really before that. And there are conversations about how to handle that, how to address that. It certainly would be my hope that the Governor would send us very promptly appointments to those offices so the Legislature can consider those. That's a constitutional duty we have.

And maybe just to add to that, we do have a legal opinion from our attorneys that if someone has been in an acting position for 7 months, if they have been acting as the commissioner, they're making decisions as commissioner, that they are in fact the commissioner. And so my intention is to put the 2 names of the acting commissioners on the floor in, in, in that meeting jointly with the House. And so I think we will consider them and we'll see what the governor has. Some options there. He has some concerns, of course, expressed to me yesterday.

Since it's late in his term with only 7 months or so to go, he's going to have some difficulty filling those positions. But we still have to protect the process, which is— it is our obligation to make sure that we take seriously this opportunity to decide whether we want to confirm or not. Next up is Mari Kanagi with the Anchorage Daily News.

Dropped off. Sorry. Next, Iris Samuels with the Anchorage Daily News.

Thank you. I have a question about the operating budget, and it's specifically— again, this is a two-part question. It's about the deficit or surplus in the supplemental— in the— sorry, 2025 budget. That was brought to the Senate Finance Committee attention a few days ago. I'm wondering how confident you are about that.

And then kind of the second part of the question is, how will that affect the, the potential energy payments and the potential funding for school districts if there is still some lingering uncertainty about whether there was that deficit or surplus? Senator Steadman, not that you are, of course, the capital budget, but I'm sure you can answer some of these questions on operating. Right, because operating budget And I know the fellow is not here, but as I recall on that issue, there is a disagreement amongst the budget folks, the auditors, Ledge Finance, and OMB. So I think we are okay on that. We will have to get— if you want more detail than that surface answer, we will have to get back to you.

But my expectation is, is we're fine on that. It's not going to be a problem. We haven't made any adjustments that I know of in the current budget process to deal with a potential problem. So I think it's just a disagreement to sort out on some of the exact account balances. Thank you, Senator Simpson.

Mark.

Go ahead. [Speaker:THE_PRESS] Will Courtney, Alaska's News Source. Last week the House Energy Committee was talking about the potential of a fuel crisis in particularly western Alaska this winter due to the war in Iran, rising fuel prices, and fuel shortage as well. I'm curious what the Senate majority is currently thinking of that crisis, or if it will be a crisis. Senator Steadman.

I invite you again to the Senate Finance Committee on, on availing of the amendments on the operating budget. We realize that that is a significant issue. As an example, a lot of the schools are having to buy their fuel now. They're worried about fuel availability, much less weather. So we've are going to try to address that in the budget process as much as we can.

It does not go unnoticed. And I would include schools across the state, not only the rural northern schools, but schools across the state. Thank you. Any further comments on the fuel crisis?

Eric Stone with Alaska Public Media. I want to ask about campaign finance contribution limits. There was a bill that passed the House last year that would impose limits following the Supreme Court ruling. And I'm curious if you guys are planning to act on that this term. It looks to be in the Senate Rules Committee, passed the House last year.

Is that something that you guys anticipate passing this year? There's also a voter initiative out there about it. Senator Wilkoski, rules, any comments? Yeah, it has been in rules. We had talked about that at the end of last year.

We have until the end of session to decide if If we do vote on it and it is ultimately approved by the governor, it would be taken off the ballot. My expectation is if it goes to the ballot, it will probably pass pretty overwhelmingly. That said, we— I don't know where the votes are. I don't know if there's support in the body to bring it to the floor. But that is something that I had been planning to ask and see where support is for bringing that bill to the floor.

So stay tuned on that. Thank you, Senator Wolkowski. So I see there are no questions out there, but another issue that we have been hearing rumors and talk about is the Defense Production Act and how that might affect the gas pipeline. I know you've had some hearings on it. Senator Giesel, can you shed any light on that?

Well, we certainly have talked about it. We reached out to a gentleman who has published on this topic. His name is Phil Rosenthal. Philip Rossetti. Uh, he is the senior fellow for energy and environment— environment, pardon me— uh, at R Street Institute.

He had written a paper on this about 2 years ago, and so we reached out to him. He'll actually be testifying tomorrow in Senate Resources. Uh, we did have a preliminary meeting with him, and he said that this law, uh, is actually pretty ill-defined. It hasn't been tested in court, what the limits of it are. We asked him if it looked like something that the national— that the federal government could use to nationalize the gas pipeline, and he said not based on how much money is in the fund at the moment.

No, they would not have $47 billion, and he saw that as really distant likelihood. When we had asked Nick Fulford from Gaffney Klein, Nick's only view on it, the only potential would be perhaps if the federal government were to commit to being the buyer of the gas, that would open up the private sector. Then now there's a confirmed buyer that is reliable, the federal government, and investors then would probably step up to help fund the project. But Mr. Rossetti felt that was exceedingly unlikely, that the federal government would become a marketer of natural gas to foreign markets. So again, not a lot of likelihood this would come into play, but we are going to have Mr. Rossetti on the record tomorrow in Resources.

Thank you, Senator Giesel. Seeing no further questions— I do have a question, okay. Please go ahead. Eric Stone with Alaska Public Media. With the confirmation votes coming up and a number of priority bills heading to the governor, I wonder if there is any possibility of a sort of exchange.

Governor signs a bill that you guys like in exchange for you guys approving an appointee that you otherwise may not. Wanted to see if there's any interest in doing that. Why or why not? We're always willing to negotiate. Anyone have any comments?

Okay, thank you all so much. We'll see you next week.