Alaska Legislature passes budget, energy and education bills to end session

May 16—JUNEAU — The Alaska Legislature finished its regular session after midnight on Thursday, having passed an operating budget and several major policy items related to energy, crime, and education.

"This has been an extremely productive session," said Sen. Bill Wielechowski, D-Anchorage, shortly before adjournment.

"Normally we do like one big policy issue a year. And this year, we had several. And I'm kind of surprised we got them all across," Sen. Bert Stedman, R-Sitka, said after the session had ended.

However, the final days of the session were marked by tension between lawmakers, marathon floor sessions and prolonged debates that sparked heated anger from nonpartisan staff. On the penultimate day of the session, several House pages — responsible for passing notes among lawmakers and guarding the chamber doors during floor sessions — walked off the job, leaving legislative staffers to fill in. Senate clerks, who provide administrative support and ensure the Senate follows proper legislative procedure, complained about absurdly long hours they said were cruel to staff members.

Still, the long floor debates in the final days of the session were fruitful. As the midnight deadline loomed Wednesday, lawmakers adopted dozens of bills, including ones to expand child care subsidies, make Juneteenth a state holiday, and extend a benefits program for low-income seniors.

House Speaker Cathy Tilton, R-Wasilla, said it was "a great session" in which many policies had been "taken care of."

House Minority Leader Calvin Schrage, I-Anchorage, celebrated some legislative victories after the session concluded but also listed popular legislation that did not make the cut, including a permanent increase to education funding, overhauling the state retirement system, and improving the voting process.

"Did we have some wins? Absolutely. Is there a ton left on the table that Alaskans were begging us to take care of? Yes, that's true, too," said Schrage.

In a rush to pass as many bills as possible, House members blew an hour past the midnight deadline, concluding after 1 a.m. Thursday. The Senate completed its work shortly before midnight.

All legislation heads next to the desk of Gov. Mike Dunleavy. In a statement issued early Thursday morning, Dunleavy praised legislation to address energy issues and public safety.

"We are proud to have passed several bills this session that move Alaska forward," Dunleavy said.

The budget

The Senate passed the operating budget on a 17-3 vote just an hour from adjournment; the House passed the spending plan for the fiscal year that starts July 1 just a few minutes from midnight in a 22-18 split.

In recent years, disagreements over the budget have dominated legislative debates. This year, the budget advanced relatively smoothly amid heated policy fights. It includes a combined Permanent Fund dividend and energy relief check of roughly $1,650 per eligible Alaskan.

Rep. DeLena Johnson, R-Palmer, who oversaw the operating budget process in the House, said the final dividend amount "was the best we could achieve" and called the final amount "a healthy check."

"No budget is perfect, but this is a collaborative product," said Johnson, calling the dividend "balanced" and "responsible."

The budget also includes $175 million in one-time school funding on top of the normal school funding formula. Last year, legislators approved the same temporary school funding increase, which Dunleavy then vetoed down to $87.5 million. Citing inflationary pressures, Dunleavy said earlier in the month that he would support the $175 million in extra school funding set to be shared between Alaska's 53 school districts.

Education

A bill requiring that overdose reversal drugs be available in Alaska schools was amended by the Senate in the final hours of the session to include a measure meant to stabilize correspondence schools after a recent court ruling.

Anchorage Superior Court Judge Adolf Zeman ruled last month that two statutes governing Alaska's correspondence schools — which serve nearly 23,000 students — violated a state constitutional prohibition on spending public funds at private schools.

The correspondence legislation was originally authored by Rep. Justin Ruffridge, R-Soldotna, one of several lawmakers who enroll their children in correspondence programs. The measure would instruct the state board of education to write temporary regulations that would expire next year, leaving open the possibility for the now-unconstitutional statutes to be reinstated if a higher court overturns Zeman's ruling.

Sen. Löki Tobin, D-Anchorage and chair of the Senate Education Committee, said she would cautiously support the homeschool bill. She had previously proposed competing legislation that would have instructed the state board of education to write regulations with more guardrails on how annual allotments of up to $4,500 per student can be spent.

"I know that we need a permanent fix if the court determines that our current statutes are unconstitutional," Tobin said.

Under the measure, the state would be required to prepare an annual report that tracks how many students are enrolled in homeschool programs and how those allotments have been spent. The state does not currently track homeschool allotments.

Rep. Jamie Allard, R-Eagle River, who co-chairs the House Education Committee alongside Ruffridge, spoke in favor of the bill, which ultimately passed the House in a rare 40-0 vote.

"I'm proud of being on that education committee. A lot of ups and downs over the last two years but I will say ... with this passing out, I feel like we have accomplished enough," said Allard.

Allard and Ruffridge's work on the committee earlier in the year was marked by persistent disagreements that caused the committee to pause meetings for several weeks.

Ultimately, lawmakers failed to pass what many had said was their top education priority — a significant and permanent increase to the Base Student Allocation, the per-student education funding formula which has not changed markedly in more than seven years despite record inflation. Lawmakers had included that in an education bill adopted earlier in the session, which was vetoed by Dunleavy.

Energy

In the final hours of the session, legislators passed several bills intended to address a looming shortfall of Cook Inlet gas, and to boost renewable energy along the Railbelt electric grid between Homer and Fairbanks.

"We actually did accomplish a huge amount, very diverse things in the energy realm," said Sen. Cathy Giessel, R-Anchorage.

The House and Senate broadly passed House Bill 50, which was proposed by Dunleavy. It would set up a statutory framework for the state to lease depleted gas wells to store carbon dioxide deep underground. Supporters say Alaska should participate in the fast-growing global carbon sequestration market.

Other key provisions in the bill would allow the state to regulate natural gas storage, with the intention of preventing price gouging, and for a state-owned investment bank to issue loans to producers based on their gas reserves.

"It could end up — quite frankly — being one of the most important things that we have done this year. It really could potentially unlock huge fields," Wielechowski said.

Another measure that broadly passed the Legislature would establish an integrated Railbelt electric transmission organization. House Bill 307 is intended to enable the lowest-cost power to be delivered across the Railbelt grid, and to integrate more renewable energy into the system.

Under the bill, renewable power producers would be exempt from municipal property and sales taxes on new projects. The measure would also phase out wheeling rates, which are fees charged by utilities to transmit power across their section of the grid. Both changes are expected to reduce power costs for ratepayers in the long-term.

Sen. Click Bishop, R-Fairbanks, called the bill "historic" after several prior attempts to establish a Railbelt transmission organization failed over the past 50 years.

Several lawmakers from the Kenai Peninsula voted against the transmission bill, citing concerns that constraints in the electric grid would mean their constituents would not see a drop in their power bills. Homer Electric Association asked to join the transmission organization after the grid is upgraded.

"I think it's a good start, but it needs some more work," said Nikiski Republican Sen. Jesse Bjorkman, who opposed the bill.

Two other renewable energy bills passed on the final day of the session, with the intention of diversifying Southcentral Alaska's energy supply. One would establish a state green bank at the Alaska Housing Finance Corp., intended to capture federal clean energy funding and to offer loans for renewable energy projects.

"The Railbelt is going green, and I think that's out of necessity," Wielechowski said.

A priority for the House Republican-led majority was to reduce state royalties paid by oil and gas producers as a way to incentivize more Cook Inlet gas production. But the proposal was opposed by key senators, who said there was not enough evidence presented that forgoing state revenue would see substantially more natural gas produced.

Undeterred, Tilton said that work would continue in the interim on a royalty reduction proposal.

Crime

The Legislature passed a wide-ranging and tough-on-crime bill on Wednesday. House Bill 66 imposes tougher penalties for drug offenses, which is intended to tackle Alaska's fentanyl crisis, and a provision to allow law enforcement officers who investigate a crime to present evidence at grand juries to secure an indictment — among a suite of other changes.

"These are all positive steps to improve public safety and make wise use of our public safety resources," said Sen. Matt Claman, D-Anchorage, before the Senate's vote.

The crime bill has attracted opposition from the ACLU of Alaska with concerns that extending involuntary commitment periods at the Alaska Psychiatric Institute could violate constitutional due process rights. The civil rights law firm also suggested that longer sentences for drug offenses would not act as an effective deterrent against trafficking.

Anchorage GOP Rep. Craig Johnson said the Legislature had previously considered bills that were about "basically coddling criminals."

"This is the first bill I've seen in my tenure that actually protects victims," said Johnson.

Elections

A last-ditch effort to advance election reform failed dramatically as the clock ticked past midnight.

The Senate adopted an elections omnibus bill in a 14-6 vote early Wednesday, but Rep. Sarah Vance, R-Homer, said she opposed it after the Senate amended her bill to include several provisions, including a framework for voters to correct errors in absentee ballots once they are submitted, and a removal of the current requirement to have a witness signature on absentee ballots.

Vance's original bill focused on policies to cull inactive voters from Alaska's voter rolls.

Rep. Zack Fields, D-Anchorage, said the lack of ballot curing and the current requirement for a witness signature on absentee ballots "represents de facto racial discrimination against Alaska Natives" and those who speak English as a second language.

Schrage, the minority leader, made a motion for the bill to be voted on by the House at 11:30 p.m. — half an hour before the end-of-session deadline. The motion failed in a 20-20 vote. Later, Schrage sought to add the election bill to a list of bills voted on by the House after the midnight deadline, over Vance's objection.

The elections bill became the center of a standoff between the House majority and minority, with Rep. Jesse Sumner, R-Wasilla, joining the minority in supporting the effort to stall adjournment.

"Any piece of legislation that is taken up and considered after midnight of the 121st day of this session is ripe for litigation, especially when it comes to elections," Vance warned lawmakers around 12:30 a.m.

Alaska's constitution explicitly requires lawmakers to adjourn at the end of the 121st day of the session. Several lawmakers, including Rep. Dan Ortiz, I-Ketchikan; Rep. Bryce Edgmon, I-Dillingham; and Tilton agreed that previous Legislatures had worked past midnight at the end of the legislative session.

Rep. Ben Carpenter, R-Nikiski, said lawmakers were not upholding their oath to follow the constitution by continuing to work past midnight — despite the precedent.

"To follow the precedent of a lawless Legislature in the past is just to continue lawlessness," said Carpenter.

Ultimately, the House majority succeeded in corralling the 21 votes necessary to adjourn the legislative session before bringing the election bill to a final vote.

The Senate adjourned at 11:47 p.m. Wednesday before the 121-day deadline; the House adjourned at 1:22 a.m. Thursday. Legislators and their staff spilled into the Capitol hallways to celebrate. The 33rd Alaska Legislature's second regular session was done.