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The chairs of the Senate Finance Committee huddle for a discussion after introducing their draft operating budget, Thursday, April 24, 2025. (James Brooks/Alaska Beacon)
Amid a severe state budget deficit, the Alaska Senate Finance Committee is proposing the lowest Permanent Fund dividend in five years and — if adjusted for inflation — the lowest dividend ever.
On Thursday, the committee unveiled a new version of its proposed state operating budget with a $1,000 dividend, a $400 reduction from its first draft.
That cut reduces the Senate’s budget draft by $265 million, likely balancing it once additional legislation is considered.
The dividend figure is not final: The committee will consider budget amendments on Friday, and the full Senate will vote on the committee’s proposal next week.
The document unveiled Thursday is the committee’s second draft operating budget, and it follows prior drafts from both the House and Gov. Mike Dunleavy.
The new Senate committee draft is $1.7 billion less than the governor’s proposed operating budget and $384 million below the draft approved by the House.
In both cases, the primary difference is the amount of the Permanent Fund dividend.
Dunleavy proposed a dividend of roughly $3,900 per recipient based on the formula in state law, which would have resulted in a $2.1 billion deficit.
He proposed solving that deficit by taking the money from the Constitutional Budget Reserve, the state’s chief savings account. That account contains $2.8 billion, and members of the Senate have refused to spend from the CBR for the coming fiscal year, citing the prospect of larger deficits next year.
Deena Bishop, commissioner of the Alaska Department of Education and Early Development, speaks to reporters during a news conference Thursday, April 17, 2025. (Photo by James Brooks/Alaska Beacon)
Alaska Education Commissioner Deena Bishop sent a letter to superintendents statewide urging them to lobby legislators for the governor’s education policy items – or risk Dunleavy again vetoing an increase to school funding.
On Wednesday, some superintendents from districts across the state shared reactions to the commissioner’s veto threat, calling it “surprising,” “concerning” and “disappointing,” and called for state support for Alaska schools.
“We are at a make-or-break point,” said Roy Getchell, superintendent of the Haines School District in a phone interview, referring to many districts facing steep deficits, program cuts and school closures. “It’s not a game. It’s a reality. It’s something that all sides have worked hard and spent a lot of time on. It’s a nonpartisan issue.”
Bishop’s letter sent on Monday, as first reported by the Anchorage Daily News, came ahead of an Alaska Legislature vote on House Bill 57, which would permanently increase the base student allocation, core of the state’s per-student funding formula, by $183 million per year. The bill also added policy changes that many lawmakers saw as a compromise with Dunleavy after he vetoed a larger education boost on Apr 17 citing a lack of policy changes. On Wednesday, the Senate voted 17-3 and the House voted 31-8 in favor of the bill, sending it to Dunleavy.
In the letter, Bishop listed Dunleavy’s policy priorities she said superintendents should speak for, including grants for districts showing student reading improvements, open enrollment for students across districts, and increased funding for homeschool programs.
“If these critical reforms are not included, we risk repeating the challenges of previous years when the education bill — and its funding components — were vetoed. We also face the possibility that the funding element of the bill could be reduced or vetoed, as it was for FY24,” Bishop said, referring to Dunleavy cutting $87 million, half of on-time funding, approved by the Legislature in 2023.
“Please prioritize reaching out to your House and Senate members as soon as possible,” she wrote. “A personal call or email stressing the importance of these reforms and their direct impact on your district will be highly effective.”
Madeline Aguillard, superintendent of the Kuspuk School District in the middle Kuskokwim River region, expressed her concern in an email on Wednesday.
“For a sitting commissioner to send a politically charged message that appears to threaten a gubernatorial veto, particularly one directed at local education leaders working tirelessly on behalf of their communities, was surprising and concerning to receive,” she said.
She said Dunleavy’s policies are focused on urban and Railbelt districts, while rural districts like Kuspuk are in desperate need of a basic funding increase. “In Kuspuk, there are no charter or private schools—and there is no community interest in creating them. Our families want safe, fully staffed brick-and-mortar public schools. They deserve that,” she said.
“Kuspuk families experience some of the highest poverty rates in the state. Our buildings are crumbling, our curriculum is over a decade old, and we are struggling to retain staff due to uncompetitive wages. Yet we continue to be an afterthought in these policy discussions,” she said. “Where do districts like ours fit into the state’s long-term vision for education?”
Aguillard emphasized that while districts support the current legislation and funding increase, the proposal is still insufficient for schools grappling with almost a decade of flat funding, rising costs, inflation and deferred maintenance accumulating at schools.
“This feels like the futures of our students are being used as bargaining chips in a game that overlooks the vast and varied realities of education across Alaska,” she said.
Shannon Harvilla, superintendent of the Bristol Bay Borough School District, also urged bipartisan support for the education funding bill.
“While I was surprised by Commissioner Bishop’s letter—particularly its tone and timing—I remain focused on what matters most: stability and opportunity for Alaska’s students,” Harvilla said in an email. “I’ve witnessed firsthand how a decade without meaningful BSA increases has strained our ability to recruit staff, balance budgets, and meet the needs of students. A bipartisan solution has been passed, and I believe now is the time for support—not political pressure.”
Harvilla also noted the advocacy efforts of the Alaska Superintendents’ Association, which “actively engaged in good-faith dialogue with both the Governor’s Office and the Legislature throughout this session,” he said. “Their goal, which I support, has been to advocate for a responsible compromise that reflects the realities we face at the local level.”
Getchell, with the Haines Borough School District, expressed frustration with the ongoing political debate, and state leaders leaving schools without financial certainty almost at the end of the school year. “I don’t know on May 1 what my budget is going to be,” he said. “This isn’t about emails, it’s not about superintendents or governors or commissioners. It’s about 5 year olds and their futures. And I think they deserve better than this.”
Dunleavy’s office declined to comment on the letter or effort to pressure lawmakers.
After legislators passed the funding bill, several members of the multipartisan House majority caucus expressed their concern at the letter.
Rep. Rebecca Himschoot, I-Sitka, told reporters after the Legislature’s vote on Wednesday that she had a call from one superintendent that spoke in support of Dunleavy’s policy items, but declined to say who.
House Speaker Bryce Edgmon, I-Dillingham, also commented on Bishop’s message.
“I don’t think her letter had any material effect,” he said. “I don’t remember, at least as a legislator, ever seeing an agency head or a department official attempting to get outside entities, such as school districts in this case, to actively work to persuade the Legislature to take the position. I don’t remember that happening.”
He added: “It surprised me to see that.”
The education funding measure, House Bill 57, is expected to be transmitted to Dunleavy on Thursday. He has until May 17 to sign the bill, veto it or allow it to become law without his signature.
If Dunleavy again vetoes the legislation, this time legislators said they may have the 40 votes to override it.
It’s less clear whether the Alaska Legislature could override the threat in Bishop’s letter. If Dunleavy were to veto money needed to fully fund the new BSA, overriding that veto would require 45 votes, just three votes fewer than the combined number of House members and senators who voted for HB 57.
In addition, lawmakers would have to call themselves into a special session or wait until the Legislature reconvenes in January. A special session wouldn’t be an easy ask, Edgmon said.
This story was republished with permission from Alaska Beacon.
Sen. Bert Stedman, R-Sitka, listens to a presentation on the proposed amendment to the Alaska Constitution on Thursday, April 24, 2025. (Photo by James Brooks/Alaska Beacon)
As Alaska lawmakers confront a major budget deficit, legislators’ opposing views on possible solutions appear likely to lead to a lower Permanent Fund dividend and cuts to services, including public schools.
In public statements, members of the Alaska Senate’s majority caucus have said they oppose spending from savings to balance the budget and want to see new revenue bills instead.
Meanwhile, members of the state House and Gov. Mike Dunleavy have said they oppose new revenue bills and would prefer to spend from savings.
Those different positions leave only budget cuts — to public services and the dividend — as the way to balance the budget.
“It’s still a very dynamic conversation right now. … We can clearly see we don’t have enough funds to pay for everything,” said Rep. Bill Elam, R-Nikiski.
“In the absence of revenue, the PFD is going to go away. An affordable PFD this year is like $500,” said Rep. Zack Fields, D-Anchorage.
As it prepares its draft of the state’s operating budget, the Alaska Senate’s finance committee has already stripped out all spending increases proposed by the state House in its draft budget, and it has nixed most of the increases requested by Dunleavy.
Next on the chopping block is the dividend, set at $1,400 per recipient by the House.
“I believe, because of the tightness of this year’s budget, we are looking at reducing that further, but no further than $1,000,” said Sen. Lyman Hoffman, D-Bethel and co-chair of the Senate Finance Committee.
That reduction would save close to $420 million, he told reporters on Tuesday, but the size of the reduction hasn’t been finalized.
While legislators have not agreed on a new formula to set the dividend, the amounts each of the past two years were based on 25% of the annual draws from the Permanent Fund, a share supported by some senators since at least 2017. Reducing the dividend below $1,400 would end that practice.
With three weeks left in the Legislature’s regular session, the Senate has passed one revenue bill — modifying the state’s corporate income tax for big Internet companies like Amazon — and two others remain in committee.
On Tuesday, Senate Majority Leader Cathy Giessel, R-Anchorage, confirmed that the Senate will not pass the biggest revenue proposal this year: a reduction in the per-barrel tax credit given to oil companies as part of the state’s oil tax system.
That leaves only a change to the taxation of privately held companies like Hilcorp, the North Slope oil firm, on the Senate’s docket.
Even if both bills were to pass the Legislature and gain Dunleavy’s approval, the combined gain to the state treasury would be the equivalent of less than $200 for the Permanent Fund dividend.
On top of that, the odds of the House passing and the governor allowing both revenue bills appear low.
In a March opinion column published by the Anchorage Daily News, House Majority Leader Chuck Kopp, R-Anchorage, joined 15 members of the Republican House minority in opposing two of the three Senate bills.
Asked why Alaskans should endure a PFD cut to avoid higher taxes on those companies, Kopp said on April 8, “Right now, our oil and gas industry is recovering from the COVID-19 setback and we are currently on the verge of a renaissance in the energy industry. … I don’t want to kill an energy renaissance when it is just forming, coming online and showing tremendous promise.”
The House’s majority caucus has only 21 members, meaning that Kopp’s opposition would require the majority to have the support of at least one member of the House’s Republican minority in order to advance one of the oil-related bills.
But even if a bill were to pass the House and Senate, Dunleavy would still have to OK it.
“I told legislative leadership, I’m not interested in new taxes. I’m not interested in a program that taxes and spends, taxes and spends,” the governor told reporters during a news conference earlier this month.
As an alternative to cutting the dividend and services, the Legislature could unlock the Constitutional Budget Reserve, a $2.8 billion savings account. Lawmakers are already planning to do so in order to cover a $200 million shortfall in the current year’s budget.
But on Tuesday, members of the Senate’s majority caucus reiterated their opposition to that idea.
As bad as the state’s budget situation is this year, it’s likely to be worse next year, said Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee.
“We’re very concerned (about) any access to the CBR this year … because the concern is next year, it’s highly likely we’re going to need it,” he said.
Between federal budget cuts and depressed oil prices, the problems that the state is facing now will be repeated next year, both Stedman and Hoffman said. That’s when the Legislature will debate the budget to cover the fiscal year from July 2026 to June 2027.
“That is also an integral part of what we’re having dialogue on — positioning the state for the FY27 budget a year from now, so we’re not … halfway down a cliff, heading for a final stop,” Stedman said.
Among the rejected proposals were ideas to require greater disclosure of donations funneled through so-called dark money groups enabled by the 2010 U.S. Supreme Court decision known as Citizens United.
The rejected amendments, from Rep. Kevin McCabe, R-Big Lake, would have required prompt disclosure of donations to independent expenditure groups, required advertising disclosures, and sought to limit out-of-state contributions to groups backing ballot measures. Federal courts have struck down Alaska’s limits on out-of-state contributions to candidates.
Previous bills dealing with independent expenditures haven’t advanced to a floor vote, making the rejected amendments significant.
Inverting the usual pattern, Republican lawmakers proposed the restrictions, and they were defeated by the votes of independents and Democrats.
Speaking on the House floor, McCabe called the lack of disclosure rules for third-party groups “a critical loophole” in state law.
Traditionally in Alaska, Republicans have supported actions to reduce limits on campaign contributions. The Republican Governors Association has repeatedly challenged disclosure rules imposed by voters in a 2020 ballot measure, and a Republican-backed lawsuit led to the elimination of Alaska’s campaign finance limits in 2022.
McCabe argued that HB 16 should be extended to cover independent expenditures, not just direct donations.
“Independent expenditure groups have become a big part of our political campaigns,” he said, speaking on one of his amendments.
Other lawmakers noted that most of the political mailers that filled Alaskans’ mailboxes last year were from independent expenditure groups, not politicians’ campaigns.
“Voters deserve to know who is funding the message,” McCabe said.
Rep. Calvin Schrage, I-Anchorage and a sponsor of the ballot measure and HB 16, was among the lawmakers who voted against the dark-money amendments.
“I think there is concern amongst the Alaskan public around both contribution limits and independent expenditure spending. However, the dire concern is really around the hole around campaign finance, and so to the maximum extent possible, my efforts were to try and keep the bill constrained to what was approved through the ballot measure, and to address the campaign finance portion of this,” Schrage said.
Under the Alaska Constitution, a law can replace a ballot measure only if the underlying bill is “substantially similar” to the ballot measure.
In addition to the dark-money amendments, the House rejected a proposal to exempt most municipal elections from campaign-finance reporting requirements, and an amendment that would have prevented the recipients of state contracts — and their family members — from donating to political campaigns.
That amendment was almost identical to a bill rejected by Hawaii’s Legislature on the same day that the Alaska House turned down the idea. Several states, including New Jersey, have so-called “pay for play” disclosure rules; the amendment proposed by Rep. Sarah Vance, R-Homer, would have gone further by actually restricting donations.
Schrage said it went too far.
“With that specific amendment, I think my biggest concern was around the fact that family members would be prohibited from making donations to political campaigns,” Schrage said. “The courts have been pretty clear that we need to be careful about limiting people’s free speech, and thanks to Citizens United, political spending is considered free speech.”
In 2010, the U.S. Supreme Court ruling in Citizens United v. Federal Election Commission eliminated restrictions on spending by political groups unaffiliated with a particular politician. Since then, the amount of money spent by independent groups has significantly increased. So has the role of dark money contributions — money funneled through independent groups in order to conceal the identity of the donor.
A ballot measure approved by Alaska voters in 2020 requires independent groups to disclose the “true source” of their contributions, but that measure has exemptions: It doesn’t cover ballot measure groups, for example.
Schrage said some of the rejected ideas could show up in separate legislation, but he wanted to keep HB 16 confined to the ballot measure that’s ready for a vote in 2026.
“There’s always this question of, how much do you try to do, and how much can you fit into a bill before it becomes too heavy and too controversial to make it through the process. There is a very strong desire from Alaskans to address our campaign contribution limits, and we have a very clear proposal before us. I wanted to move forward,” he said.
Bottles of wine are displayed on June 29, 2022, at an Anchorage liquor store. Alaska is the first U.S. state to require that businesses post signs warning that alcohol consumption raises cancer risks. (Photo by Yereth Rosen/Alaska Beacon)
Alaska bars and liquor stores will be required to post signs warning of alcohol’s link to cancer, under a bill that became law on Friday.
The new sign mandate, to go into effect on Aug. 1, makes Alaska the first U.S. state to require such health warnings specifically related to colon and breast cancers.
The warnings about the alcohol-cancer relationship will be added to already mandated warnings about the dangers that pregnant women’s consumption can lead to birth defects.
The requirement is part of a measure, Senate Bill 15, that allows employees under 21 to serve alcohol at restaurants and breweries. Lawmakers last year passed a similar bill, with the same combined provisions, but House members gave their final approval just minutes after the midnight adjournment deadline. It was one of five bills that Dunleavy vetoed because of passage after that deadline.
Rep. Andrew Gray, D-Anchorage, was the leading proponent of the new signage. He sponsored a stand-alone measure, House Bill 37, that became combined with the alcohol-server measure; the same process was used last year, though passage of that bill was after the adjournment deadline.
This time, the combined bill on alcohol servers and cancer warnings was approved by lawmakers well before they adjourned. It won final passage with a unanimous vote in the Senate on April 4. Dunleavy allowed the measure to become law without his signature.
Alcohol consumption has been shown to increase risks of certain types of cancer, including breast and colon cancer.
Gray said the relationship has gained more attention in recent years, and he some gave credit to former U.S. Surgeon General Vivek Murthy. In January, Murthy issued an advisory report describing how alcohol consumption, even at moderate levels, increases risks of at least seven types of cancer. “Alcohol consumption is the third leading preventable cause of cancer in the United States, after tobacco and obesity,” said the report.
Murthy recommended that the label on packaging for alcoholic drinks be updated to include the cancer-risk link.
Currently, South Korea is the only nation that requires warning labels about alcohol consumption increasing cancer risks. A similar warning is set to go into effect in Ireland next year.
The newly passed bill includes a provision, originally part of a stand-alone bill sponsored by Rep. Andrew Gray, D-Anchorage, that requires warnings to be posted about alcohol use’s link to cancer. The currently requried sign is on the left; the new sign required starting on Aug. 1, 2025, is on the right. (Graphic provided by Alaska Legislature)
Rep. Zack Fields, D-Anchorage, speaks Friday, April 26, 2024, on the floor of the Alaska House of Representatives. (Photo by James Brooks/Alaska Beacon)
Legislation passed Wednesday by the Alaska House of Representatives would require the state’s school districts to adopt policies that restrict the use of cellphones by students during school hours.
House Bill 57, which will advance to the Senate after a 34-6 vote, does not require districts to ban students’ cellphones altogether but does require them to regulate students’ use of phones during regular school hours, including during lunch and the time between classes.
An earlier version of the bill would have required the Alaska Department of Education and Early Development to draft a model policy as an example for districts to follow, but that requirement was eliminated in a floor amendment.
The amendment also eliminated a requirement that school districts report their academic performance before and after the new cellphone policy.
Cellphones would be allowed for translation purposes, in emergencies, for medical reasons, and as needed for instruction.
Every state except Nevada and Wyoming has proposed or is considering a statewide ban or restriction, according to a tally kept by the Associated Press. Some members of Congress are considering national legislation.
The bans come amid a broadening base of research that shows smartphone and social media use can contribute to negative mental health and poor academic achievement among students in grade school and high school.
Several lawmakers, including Gov. Mike Dunleavy, proposed legislation this year that would restrict cellphone use in schools.
HB 57, from Rep. Zack Fields, D-Anchorage, became the leading bill.
On April 11, Rep. Justin Ruffridge, R-Soldotna, proposed an amendment that rewrote the bill’s language to reflect a section of an education bill approved by the Senate Education Committee.
Ruffridge said he thinks Alaskans believe in local control of education.
“The language of Amendment No. 2 gives that ability to govern yourselves and be as strict or as permissive as possible at the district level,” he said.
Fields spoke against the amendment, saying it turned HB 57 from a cellphone ban into “a cellphone discouragement policy.”
The amendment passed on a 19-18 vote.
Five days later, when the bill came up for a final vote, Fields voted for it.
“The amendment adopted to this bill substantially weakens it,” Fields said. “I’m still going to vote for the bill and send it to the next body because I think there’s an opportunity to resurrect better language.”
Other legislators also stood up in support, offering anecdotal stories about the way cellphones have affected their children and children they know.
“Parents and our state are at war against these screens,” said Rep. Andrew Gray, D-Anchorage, speaking in favor of the bill.
A handful of legislators spoke against the bill, including Ruffridge, whose amendment significantly rewrote it.
Ruffridge said he supports giving local school districts the authority to make decisions like this.
“It’s not up to us to do,” he said.
Rep. David Nelson, R-Anchorage, said that there are plenty of reasons to be concerned about kids’ mental health, but that is a wider issue than just cellphones.
“If we’re going to be trusting young people and saying, ‘Hey, you are the future,’ why are we banning communication devices in public schools?” he said.
HB 57 is subject to a reconsideration vote on the House floor before it advances to the Senate, but legislators said they don’t expect the tally to change much, if at all.
The bill has been tentatively scheduled for a hearing in the Senate Finance Committee on Wednesday.
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