Lawmakers leave fiscal plan, other issues for another year

Though legislators passed dozens of bills during the two-year legislative session that ended May 15, they left behind multiple big issues for future consideration.

Lawmakers were not able to finalize any part of a plan intended to bring the state’s revenue in line with expenses over the long term.

In 2022, a bicameral, bipartisan working group recommended changes to the Permanent Fund dividend formula, an effective state spending cap, new taxes and constitutional changes to guarantee the dividend and limit spending from the Permanent Fund.

While the state Senate passed a new formula for the Permanent Fund dividend in 2023, the House did not take up the Senate bill.

The Senate’s proposed formula would have split the annual transfer from the Permanent Fund to the state treasury 75%/25%, with the larger share paying for public services and 25% for dividends. The formula could have changed to a 50/50 split if lawmakers enacted substantial new taxes or other revenue measures.

While legislators approved a 75/25 split in 2023 and 2024, they did so as a budget item, which is good only for the one year, not as a new formula in law.

The House failed to pass a proposed constitutional amendment guaranteeing the Permanent Fund dividend, and no new major taxes or spending cap proposals received a final vote in the House or Senate.

The House and Senate also failed to pass a bill or constitutional amendment addressing the Alaska Permanent Fund Corp.’s concern that the fund may run out of spendable money within a few years, but the state budget contains a measure that reduces the amount of Permanent Fund earnings that will be transferred into a constitutionally protected account, effectively buying more time to address the issue.

Though the fund’s total value as of April 30 financials stood at $78.5 billion, about 87% of the money is counted as principal and cannot be spent without a constitutional amendment.

The state Senate voted to revive a pension program for state, municipal and school district employees, part of an effort to attract workers to vacant public service jobs, but the House declined to take up the bill.

Back in March, lawmakers passed a multipart education bill with bipartisan support, but Gov. Mike Dunleavy vetoed it and House Republicans declined to vote in favor of a veto override despite supporting the original bill.

The bill would have permanently increased the state’s per-student funding formula, among other components. A one-time increase in funding for K-12 education was included in the state budget.

Republican members of the House prioritized a bill that would have banned transgender girls from girls sports teams, but as expected, the Senate declined to take up the bill before the legislative session adjourned.

Elements of the bill, which limits membership on girls school sports teams to students who were female at birth, have already been passed into regulation by the state school board. The Alaska School Activities Association has been enforcing that regulation since last year.

There are no transgender girls openly competing in school sports within Alaska.

Six days before the Legislature adjourned, the House voted to cut the state’s tax on marijuana and switch it from a wholesale, per-ounce tax to a sales tax paid at the retail level.

Alaska’s marijuana tax, set during the 2014 ballot measure that legalized recreational marijuana in the state, is the highest in the nation, and industry officials have asked for tax relief, saying that current tax rates are driving growers out of business and contributing to the survival of black-market sellers.

After the Senate balked at the House’s original bill, House lawmakers added the marijuana tax changes to an anti-smoking, anti-vaping bill written by Senate President Gary Stevens. The Senate declined to take up the combined bill. Stevens said he killed the bill because the Senate hadn’t had the time to consider the marijuana tax issue.

After the state Senate passed a bill removing some public notices from Alaska newspapers’ print editions, the state House failed to take a final vote on the bill, causing it to fail.

Anchorage Rep. Stanley Wright proposed a bill restricting interest rates on payday loans, and while the bill passed the House, the Senate Finance Committee failed to hear it in committee, and it died when the Legislature adjourned.

Anchorage Sen. Forrest Dunbar had several bills die at adjournment, but “the one that really bothers me” was the failure of a bill that would have given more funding for the Alaska Legal Services Corp., which provides legal help to low-income Alaskans dealing with issues in civil court. The bill passed the Senate but not the House.

The Alaska Beacon is an independent, donor-funded news organization.


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