SMAJ-20260408-1300

It is the 79th day of the legislative session,

and pleased to have with us today Senator Kiesel,

Senator Walachowski,

Senator Steadman, Senator Tobin, and myself,

Stevens.

We're entering now, of course, into the last third of this session, and things are beginning to come into pretty sharp focus.

Alaskans are watching closely what we're up to, major issues out there,

certainly the state budget, the elections issue,

the education reform,

and the future of gas line for Alaska.

So very,

very big questions,

big issues, and the Senate is taking them quite seriously. So one piece of legislation that's before us right now is the governor's gas line bill.

And that's Senate Bill 280.

Senator Giesel and her resources committee have been working and going through that thoroughly review and hearing directly from the project developers and working through the details of what this could mean for our future here in Alaska. So Senator Giesel, can you walk us through what the committee has heard,

where the bill stands,

and what can we expect to come out of the resources committee?

Sure. Thank you, Mr.

President.

The Resource Committee has been working on the bill next,

starting next week, next Monday.

We're actually going to be meeting every day of the week for the next projected three weeks working on that bill.

You know, there's a lot of media saying and letters to the editor saying that we should be enthusiastically supporting the gas pipeline,

and we are.

We have House Joint Resolution 18 before the Senate Resources Committee,

and today we'll be hearing it again and moving it out of committee.

It'll move then to the Senate floor through the Rules Committee.

We have been scouring the bill.

The mayors met with us and had concerns.

And we are very much respecting those concerns about how the impacts will be paid for as they as they come through their district.

You know, there's a very interesting part of the bill and it's in it's in Section.

It's in Section 6 on pages 5 and 6,

and it talks about the volumetric tax and the abatement of taxes during construction,

and the taxes that would be abated include any taxes on oil or gas production and pipeline property.

Also, gross or net income tax,

license,

excise, any fees,

charges, or other tax on or relating to the purchase,

use,

consumption,

or ownership of property or services.

So a question we have, which we're going to be exploring, of course, with the Department of Revenue when they come before us next week, is

How broadly does this apply?

Is it only in the area where the pipeline is going or does it apply statewide?

It's very unclear in the bill because potentially this could apply to things like wages.

If employees purchasing items at the store, maybe a package of cigarettes,

are they going to be issued a card that says I'm an employee and therefore I don't have to pay an income tax or excuse me, a sales tax or any kind of fee for this package of cigarettes?

These are some pretty serious questions and it goes on to say that this will this abatement will continue during construction operation or maintenance of the pipeline.

Well, maintenance and operation goes for a very long time. It does specify that when we hit a billion cubic feet,

that then a six cent tax would go into place. But a six cent tax is incredibly minimal.

Year one, it would be six cents per MCF.

Year two, with a one percent increase, it would be...

0.061 to 0.06 cents.

I mean that's it doesn't even account for inflation.

So while we're being encouraged to move quickly on this.

We are moving quickly with all due diligence, and we're asking a lot of questions, and we'll continue to do that. But I think I know that there were many House members who were not aware of all the taxes that would be set aside, and I think all of that needs to have due consideration. Thank you, Mr. President.

Thank you, Senator Kiesel, for approaching this very,

very carefully,

as we have to.

Let's turn to education then.

Senator Tovar has.

has been leading legislation that addresses the two very critical issues.

One would be correspondence programs.

The other would be inflation adjustment for the VSA, base student allocation.

And that's had a lot of conversation back and forth about that across the state.

And I know you've been listening to that very carefully, Senator.

So could you tell us, Senator Drobun,

Could you share with us what you've been hearing from Alaskans since you introduced the bill and give us a sense of what changes you're considering in the committee substitute?

Well, thank you, Mr.

President.

I do just want to invite folks to Friday Task Force on Education Funding. We'll be focusing on local contribution,

federal impact aid.

I cannot pass up an opportunity to invite more folks into the conversations that we're having about the long term reforms.

that are needed to stabilize our education services here in the state.

Senate Bill 277 has had significant input from stakeholders and a lot of robust discussions happening with many of our constituents and with folks who have significant concerns about the way that the bill is currently drafted. As we shared in the initial bill introduction,

the intent was to ensure that students who are participating in

in a public school option are able to have fair access to all before and after school programming while not impacting their education experience or eroding any of the purchasing ability that they have when it comes to being able to purchase supplemental curricula or any type of additional resource.

However,

we know that there is some reservation about the way that the bill is currently drafted,

so we have been working with stakeholders and

And I have been working with committee members to work on a committee substitute that hopefully will continue to meet the needs of our stakeholders as well as address the concerns that I've heard from.

Let's go with Alaska public media again.

I wanted to ask about the elections bill,

Senate Bill 64.

I see it has not been transmitted to the governor yet.

I'm curious,

I mean, time seems to be of the essence with this bill.

I'm curious why it hasn't been transmitted yet and when to expect that.

Thanks, Joel.

Senator Likowski.

Thank you.

My estimation is it'll be in the next few days. We just wanted to time it in a way so that

So if we didn't need to get back together as a legislature,

we would be here and there was we had the Easter break and then you have the supplemental on the floor this week.

So we just wanted to have timing and we're also still having discussions with people to ensure that we can get this all the way across the finish line.

Mari Kanegi with Anchorage Daily News. I have a question for Senator Tobin on the education bill.

You mentioned that the task force is meeting Friday about local contributions.

I'm wondering about a CS for that for Senate Bill 277. Is that something that you're expecting to have ready Friday as well? Or can you share more about the timeline for that?

Senator Tobin.

Thank you, Mr. President.

Thanks, Murray. That's a great question.

We are going to work as fast as our legislative legal drafters can work.

Unfortunately,

the drafter who works on education also works on the budget.

And so there's often a dynamic of where we might not be first top priority with other conversations that are happening in this legislature at this point in time.

I also want to note just because I have an opportunity here is next Wednesday,

the task force on education funding will be going over accountability and assessments.

and I am especially excited because we'll have an opportunity for lawmakers to take a mock AK-STAR assessment where we'll be able to show the public what it looks like to take these very well-structured evaluations of student proficiency.

I am looking forward to it. I hope we have lots of participation and I invite everyone to come and learn a little bit more about state assessments.

Are our scores protected?

You get immediate results.

You get immediate results.

You

Okay.

get to choose whether you share them or not.

Okay,

Okay, thank you.

Mark Sabatini, Juneau Independent. Question probably for Senator Giesel or Senator Steadman. I saw that HB 78 is in Senate Finance tomorrow and so I wanted to ask, What is the current status of public employee pensions in terms of some kind of bill that's ready to move, get through both chambers, and get signed? Where are things right now?

Who

Oops.

Who would care to take that? Or maybe I'll just— Go ahead.

W well, the bill is in Senate Finance.

Yes.

It's already passed the House, and so after it comes out of Senate Finance, it'll go to the Senate floor. So that's the status. Um

Thank you. Any comments?

Thank you.

Senator Stebman can tell you more.

We're looking at amendments tomorrow.

So we'll talk about amendments tomorrow and go from there. You know, we have lots of time to the end of the session, so we're just going through the process.

What are the amendments and concerns at this point still to be addressed?

I haven't looked at the amendments, so I couldn't tell you what my committee,

um other committee members' concerns are. Um I've got several concerns with the bill of course, but we'll deal with them tomorrow at at the finance table.

So, Mark, this is certainly an issue that is very important to our caucus,

the Senate majority caucus.

We're trying to find a way to resolve it, but we have to keep our eyes wide open and figure out what it's going to cost us and deal with all of the issues out there.

We can't put the state into debt.

We know that, but we also know that our retirement system is long overdue in this state. But what it's going to actually look like.

We're not quite there yet.

Jeff Lanfield for Senator Tobin. I'm sure you saw that the education levy in Anchorage is barely failing by a few hundred votes, but it's basically 50-50 out of, you know, many 40,000 plus votes.

What message do you think that sends? The biggest city in Anchorage is divided on this special education levy.

Senator Tobin?

Thank you, Mr. President.

Thanks,

Jeff. It's hard to guess or surmise what thousands of voters are thinking when they cast a vote for or against something like their schools. We know overwhelmingly Anchorage residents love their public education system,

participate in it,

want it to be safe and value its contributions. However,

I also know that costs are extremely high in Anchorage. I was there this weekend.

end and at five dollars uh a gallon it's hard to ask people to keep uh giving a little bit more and a little bit more. I think there's a a real conversation to continue to be had about education funding and who ultimately bears the responsibility to make sure that our kids are adequately educated.

Thank you, Senator.

Well?

Will Courtney Alaska's new source Senator Giesel again on the gas line the you mentioned today that the joint resolution is going to be passing out of the Senate Resources Committee What are your thoughts on that joint resolution and is it going to be amended?

Well, it was um c committee substitute was offered last week.

Today's Wednesday, right? Yes, last week.

I've received no additional amendments, so that will be the version that we pass out, I assume. It will be before the committee to determine if it passes out or not.

Got time for one more.

Okay.

Okay.

Eric Stone with Alaska Public Media. With all the talk of the large PFD in the House, I'm curious if there's any update on what a reasonable PFD is to expect this year, if any of that might wind up as an energy relief payment. Senator Steadman talked a little bit about like, you know, fuel triggers for schools. But I'm curious if there's any update on what the dividend might be.

You know, we assumed right at the beginning it'd be around $1,000, maybe a little bit more, sooner step than any further observations you care to make?

I think that's pretty close,

around $1,000 I'd expect,

because there's a heavy concentration on deferred maintenance, and you'll see that with the capital budget rollout. We have schools that are falling apart,

literally falling apart.

And you have to ask yourself, do you want a school for the kids to go to or do you want to hand them large dividend checks?

And that is definitely in front of us. So if we increase the the dividend substantially or any other expenditures relative to deferred maintenance, the deferred maintenance will have to decrease because we have bookends on the budget that we have to meet.

There's only so much money to go around.

And in the event next winter that oil prices far exceed our expectations, we could come back and readdress that. But you don't want to do that and then hope in a prayer that everything comes together next winter or a year from now.

That's no way to run a state.

Thank you, Senator Giesel.

Well, I think the question begs to be asked as well, what are we doing about new revenue?

Nobody asked about that.

There's several proposals on the table.

the internet sales tax, which I think has a different name, but that's what I call it just because I don't know the complexity of that bill. But the other one is the S corporation tax,

which does not tax Alaskans. It taxes companies that are based outside the state for the most part that don't pay a corporate tax right now. We have budget needs, as Senator Stedman has outlined,

and Senator Tobin.

but there's more than that.

There's infant learning which is a preventative program for kids that need extra help from zero to three years old. We struggle to fund that. Behavioral health grants to the non-profits that provide behavioral health services have been reduced down, they've been reduced from a hundred percent down to 25 percent.

Now, we have child advocacy centers where children that have been physically abused can be properly cared for with trauma-informed care.

We struggle to meet the needs of those organizations as well.

So the fact is,

you know, people want a dividend.

A thousand dollars is what we've been able to afford in the past, but...

It still isn't enough. Our costs go up too.

The needs go up too.

And so at some point Alaskans have supported the two new revenue measures that I've mentioned,

the internet sales tax,

which again taxes companies outside the state,

and the S corporation tax,

which was actually expanded and is part of a bill that the Senate Finance Committee has right now.

I also proposed in that bill, I think it's 227.

and an education payroll tax.

Very small amount,

$100 per paycheck that people,

one paycheck out of the year, $100 deducted going into an education fund.

Senator Hoffman has proposed actually constitutionalizing an education fund in the Constitution that could have money set aside from perhaps an education payroll tax that would help fund some of the education needs. I mean, there's a lot of ideas that we put forward.

The problem is we have to have,

we have 60 people we have to convince,

right,

or at least 211.

and that final single person on the third floor.

So there are answers to these issues.

We just have to have the courage to go forward with them.

You know, we spend a lot of time talking about the dividend,

and I know it's really important to some people, everyone is important,

but there are some people that need it more than others. But, you know, I really respect what I heard from the board,

from the permanent fund board,

I met with them a couple weeks ago, and they said,

think of the dividend as not just the check you get once a year,

the dividend that we get in Alaska is for the services that are paid.

that are paid for from the money we take from the permanent fund and and so if we didn't have that that extra dividend paying for services we'd have to be facing it income tax or sales tax or something otherwise we couldn't fund the services we have so so please think about that dividend is more than just a check i think alaskans need to understand that all right i think we're all done thank you so much see you next week