Economy

The Juneau Assembly approved more than $2 million in city funding to support four proposed affordable housing projects on Monday.

The money comes from the city’s Affordable Housing Fund. The fund was created five years ago to help combat the city’s housing shortage. It offers grants or loans to projects that aim to build more low- and middle-income housing.

The projects approved Monday are expected to create more than 40 housing units, including both single-family homes and apartment complexes located throughout the borough.

Dave D’Amato is a developer attempting to renovate the shuttered Bergmann Hotel in downtown Juneau into an apartment complex. In an interview on Tuesday, he said it hasn’t been easy.

“There’s quite a few elements that are outside the city’s control that are conspiring to make building very challenging and very costly,” he said. 

Last night, he got some help with those costs. The Assembly approved a $900,000 loan for his project that would turn the historic 46-room hotel into an 18-unit apartment complex. The loan is close to one-third of the total projected cost of $3.1 million. 

D’Amato said he hopes to have the units ready for renters within two years. He’s been working on redeveloping the building since 2017.

“I was really pleased that the Assembly decided to preserve the Bergmann and to simultaneously add 18 housing units to its affordable housing profile moving forward,” he said. 

The Assembly also approved two grants to Tlingit Haida Regional Housing Authority. One grant is for $800,000 to help fund the construction of 16 single-family homes in the Pederson Hill subdivision, some of which are currently being built. The other grant is for $250,000 to help pay for building five single-family homes on North Douglas.

Southeast Endeavors, LLC was approved for a $200,000 loan to construct a fourplex on Lee Street in Auke Bay. The Assembly did not vote on a fifth project that was up for a $150,000 grant to the Society of St. Vincent de Paul because of a clerical error. That vote was pushed to a later meeting.

At the meeting, the Assembly also approved zoning changes at two locations in Lemon Creek to allow for more housing developments in the future.

As breweries in Alaska adjust to a legal ruling that could allow them to have unlimited live shows, a different sort of industry is also celebrating: musicians. 

Until last month, breweries were limited to hosting four live shows a year. Before 2024, they were banned from having them completely. Now, breweries can host unlimited live music performances. 

The ruling comes right on time for musicians and businesses to start planning for the Alaska Folk Festival in April. 

Marian Call is a Juneau musician and, as executive director of MusicAlaska, she’s also spent the last few years organizing other musicians across the state to advocate for the industry. She said the recent Alaska Superior Court ruling opens doors for musicians and performers. 

“This regulation was ultimately a regulation about when and where musicians can work,” Call said. “It was essentially putting a limit on how often and in what locations we can do our job.”

The ruling argued that the regulations that limited live shows at breweries suppressed free speech. The lawsuit didn’t specifically include distilleries, but at a recent Alaska Alcoholic Beverage Control Board meeting, board members said they believe those businesses will fall under the same ruling, and be able to have unlimited live music as well. 

“It makes sense for the government to regulate various industries. But the thing that was so difficult about this particular regulation was that they were not intending to regulate the music industry,” Call said. “They were intending to regulate the alcohol industry.”

She said musicians are a force in Juneau. More performances in town don’t create a zero-sum game, economically. Call said MusicAlaska researches the economic impacts of music in communities.

 “Generally, what we see is that more music breeds more economic growth without necessarily undermining other sectors,” she said. “We come into a space where there was no economic activity and create it kind of out of thin air.” 

If the ruling holds, this could open doors – financially and creatively – for musicians during the city’s biggest music event of the year, Call said.

“I think Folk Fest excites me the most because it’s really an invitation, not just for everyone to come out and listen and enjoy, but also for everyone to play,” she said. “And I can’t wait to see people feeling free to play anywhere without worrying about it.”

Avery Stewart is a guitarist, vocalist, and writer with local band the Rain Dogs. He said he thinks former limitations have dampened Juneau’s creative spirit during Folk Fest.

“I was just recalling past Folk Fest, seeing signs on the walls of distilleries because they had to put up these signs, like, ‘do not play music here,’ which I thought was so silly,” Stewart said.

He said that impromptu jam sessions are an inherent part of the festival, and now, there’s no risk of businesses or musicians facing fines for them.

“It’s like a communal experience, rather than a performance,” he said. “Just a sharing of music, in its purest forms.”

The Rain Dogs Frontwoman Anna Mahanor said she’s excited to have more places to play in Juneau, and different venues to suit different kinds of shows. She said she wants to be able to play for broader audiences. 

“I think that our sound is evolving in a lot of different ways, and we’re experimenting with playing in different places,” Mahanor said “There’s a certain energy that you bring to when you’re playing at, like a bar or a dive bar.”

And a lot of the Rain Dogs shows meet that energy — loud and rowdy. But Mahanor wants to play in quieter venues, too. 

“With the idea of there being kind of more listening-room-style, it’s like a little bit more intimate,” she said. “And you can be a little bit more personable with the crowd, you know, and interact and have just a more intimate, vulnerable experience”

The Alaska Alcohol and Marijuana Control Office has until Feb. 14th to appeal the decision. 

Gov. Mike Dunleavy’s fiscal plan is taking a beating as lawmakers and the public take a closer look at the proposal. Last week, dozens of Alaskans called into a hearing to voice their particular displeasure with the governor’s proposal to institute a statewide sales tax.

Now, the governor is changing course a bit. In an interview with Alaska Public Media on Friday, Dunleavy offered to put the tax plan on ice for now.

“Let’s all agree. Take more time on the taxes. I’m all in on that,” Dunleavy said. “Let’s get the first several components in law and a constitutional amendment sent out to the people of Alaska.”

In the interview, Dunleavy defended his tax plan, which would hike some oil and gas taxes, modernize corporate income taxes, and, most prominently, create a statewide sales tax of 4% in the summer and 2% in the winter. All of the changes would be temporary, set to automatically repeal in the 2030s, and corporate income taxes would vanish entirely in 2031.

The sales tax would be by far the largest revenue-raiser, bringing in $700 to $800 million annually.

Dunleavy pitched it as an effort to extract more revenue from people who live outside of Alaska. When a panel of economists from the University of Alaska Anchorage’s Institute for Social and Economic Research looked at the options the state has, they found a sales tax, especially one with a higher rate in the summer, would bring in a greater share of its revenue from nonresidents than other options, like an income tax.

The governor also argued that a sales tax would be countercyclical. When gas prices are low, and state oil income is correspondingly low, people might be more willing to travel and spend money in Alaska, he said, pointing to Texas and Saudi Arabia as examples.

“It stabilizes the ups and downs of oil, and so it stabilizes your fiscals,” Dunleavy said. “That’s what this is about.”

But House Speaker Bryce Edgmon, an independent from Dillingham, said it was clear from public testimony that Alaskans were not prepared to pay a sales tax.

“You cannot do broad-based taxes or any significant measures without, No. 1, having the general public somewhat in alignment,” he said at a news conference on Friday.

Without Dunleavy’s tax bill, what’s left in the governor’s fiscal plan?

Whether a willingness to delay tax changes will make the rest of the plan more palatable, however, is uncertain.

The tax bill, filed as House Bill 284 and Senate Bill 227, is by far the most controversial part of Dunleavy’s fiscal plan, but even without it, the remaining elements still face skepticism from leading lawmakers in the state House and Senate.

Those include:

• Capping the growth of state spending at 1% each year, not adjusted for inflation (House Bill 275 and Senate Bill 223)
• Tasking a legislative committee with performing “sunset reviews,” evaluating government agencies every six years and requiring a vote on whether to continue or end the agency’s work (House Bill 274 and Senate Bill 222)
• A multipronged constitutional amendment related to the Permanent Fund, which would combine its two accounts into one, cap the annual draw at 5% and set aside half of that 5% draw for dividends (House Joint Resolution 30 and Senate Joint Resolution 23)

Dunleavy argued that passing those measures would build trust with voters — and potential taxpayers — that tax money would be spent responsibly.

“Once you put in rules to control the spending,” he said, “the spending, if you need it, will then make sense to Alaskans, and it can be controlled.”

He cast the final year of his term as the last chance to get those sorts of measures into state law and the Constitution, even challenging this reporter to a $500 bet that the measures would not pass once Dunleavy left office. (This reporter is not allowed to bet on the news and declined the bet.)

Does any of it stand a chance of passing?

House Speaker Bryce Edgmon said in an interview that he was willing to negotiate with the governor’s team but expressed skepticism about the remaining elements of the plan, including the limit on government spending. Inflation in recent years has run above 2%, and costs in rural communities disconnected from the road system have risen even faster, Edgmon said.

“We have so many needs on the operating side of the budget, the capital side of the budget, that to limit to a 1% increase going forward into time, assuming we continue to grow as a state, bring more residents in that make everything more expensive, that seems unrealistic,” Edgmon said.

Some minority Republicans are also skeptical — House Minority Leader DeLena Johnson, a Palmer Republican, told the Alaska Beacon the measure didn’t go far enough, calling it a “spending beanie” that could easily be overcome with a majority vote and the consent of a future governor.

Another minority Republican, Fairbanks Rep. Will Stapp, said the constitutional amendment setting aside half of the state’s investment income for dividends would be unsustainable, even if the tax plan passed. Dunleavy’s proposal, if it were in effect next fiscal year, would dedicate $2 billion in otherwise unrestricted state funds to dividends.

“I fail to see how enshrining a liability that outstrips the amount of revenue I’m raising in taxation creates anything but more instability and a need for more taxes,” Stapp said at a House Finance Committee meeting on Thursday.

Key senators have also balked at the idea of placing the dividend in the state Constitution, including Sitka Republican Sen. Bert Stedman, who co-chairs the Senate Finance Committee, though Senate President Gary Stevens, Republican of Kodiak, said he believed there was room to negotiate with Dunleavy on the amendment.

In response, Dunleavy fired back at Stapp.

“Representative Stapp is the liability,” Dunleavy said, “because he wants to spend the people’s PFD.”

Dunleavy said the amendment was an effort to prevent lawmakers from balancing the budget by reducing dividends, as lawmakers have for approximately the past decade. That’s akin to a regressive tax, hitting low-income earners the hardest, according to the economists’ presentation.

“It should always be more difficult,” Dunleavy said. “If not, you’re going to end up with what we’ve had here over the decades, spending every single penny we can find.”

Despite their opposition to Dunleavy’s plan, lawmakers do not appear ready to counter the governor’s proposal with one of their own.

For now, Edgmon said he hoped this year’s debates would at least help Alaskans understand that, with dwindling savings and uncertain revenue, why taxes might be necessary to balance the state’s budget in the long term.

“The one message that we hope will emerge from all this is that, look, Alaska, we have a structural deficit,” Edgmon said. “We need new revenues. And so that conversation, I think, is going to be really valuable.”

The Juneau Assembly will vote Monday night on whether to approve $2.3 million worth of city funding to support five proposed affordable housing projects. 

The money comes from the city’s Affordable Housing Fund. The city created the fund five years ago to address its housing shortage — specifically, the lack of low- and middle-income rentals. Since then, the city has awarded nearly $13 million in grants or loans from the fund. This round, $2.5 million is available.

The city uses criteria like proximity to public transportation and long-term affordability to decide which projects get funding and how much. The projects proposed this year would help create more than 40 units of housing, comprising both single-family homes and apartment complexes, all across the borough.

The city uses a formula based on Juneau’s income data to determine eligibility for affordable housing programs. People qualify as “low-income” if their household or individual income is at or below 80% of the Area Median Income. In Juneau in 2025, 80% AMI for a single person is $72,080 and $102,960 for a four-person household.

The Tlingit Haida Regional Housing Authority is up for two grants. One is for $800,000 to help fund the construction of 16 single-family homes in the Pederson Hill subdivision. The other grant is for $250,000 to help pay for building five single-family homes on North Douglas.

Another applicant, Dave D’Amato with Brave Enterprises, LLC, is up for a $900,000 loan to help fund the renovation of the shuttered Bergmann Hotel in downtown Juneau. The project would turn the historic 46-room hotel into an 18-unit apartment complex.

Shawn Kantola with Southeast Endeavors, LLC, is asking for a $200,000 loan to construct a fourplex on Lee Street in Auke Bay. And the Society of St. Vincent de Paul requested a $150,00 grant to help pay for long-term maintenance of its Teal Street facilities. 

Juneau residents have the chance to testify on ordinances on Monday’s agenda – as well as on non-agenda items – in person or online before the Assembly votes. People who want to testify online must notify the city clerk by 4 p.m. before the meeting. The meeting begins at 6 p.m. at City Hall. 

Leading members of the Alaska House of Representatives said Friday that Gov. Mike Dunleavy’s ambitious long-term state fiscal plan has almost no support among legislators and is almost certainly dead on arrival.

House leaders spoke with reporters Friday morning, a day after members of the House Finance Committee heard two hours of public testimony on the governor’s proposed statewide sales tax, the cornerstone of his multi-part proposal to bring state expenses and revenue into line over the next five years.

Every Alaskan who testified — almost 30 in total — was against the tax.

“This is just pure speculation on my part, but what you hear folks in the hall say is, if there’s a vote today on the sales tax, it could be a zero to 60 vote,” said Rep. Neal Foster, D-Nome and co-chair of the House Finance Committee.

House Minority Leader DeLena Johnson, R-Palmer, said there might be a handful of legislators who would still support the governor’s plan, but it’s pretty clear that it lacks the support it needs to become law.

“From the testimony that was taken last night in House Finance — when everyone who called in spoke in opposition — it certainly makes it hard to think there’s a lot of people that aren’t very cautious about saying they’re for the governor’s plan,” she said.

The governor’s plan calls for a seasonal statewide sales tax, changes to the state’s oil and corporate taxes, a constitutionally guaranteed Permanent Fund dividend formula, changes to the structure of the Alaska Permanent Fund and a tighter spending cap in state law.

Those changes are being proposed because oil and investment revenue can’t keep up with demand for services and dividends, and lawmakers are unwilling to cut services any more than they already have.

Since 2015, legislators and governors have cut state agencies’ budgets by 16.6%, after accounting for inflation. The state’s capital budget, which pays for new construction and maintenance, has been cut by more than 80%.

Every year since 2016, the Permanent Fund dividend has been cut below the amount called for in state law.

With so much deferred maintenance, public schools — particularly in rural Alaska — are decaying and literally collapsing. The state is now facing a lawsuit alleging that school funding is so low that it violates the Alaska Constitution.

Dunleavy’s proposal would be a way to stanch the fiscal bleeding. The new taxes are intended to be temporary because the Dunleavy administration expects North Slope oil production to rise, boosting state revenue, and it expects that a proposed trans-Alaska natural gas pipeline will be built and generate more money for the state.

Even before this week’s presentations and public testimony, many legislators were skeptical of the plan, and saw the new taxes as merely a way to pay a larger Permanent Fund dividend.

“I’m a logic person,” said Senate Minority Leader Mike Cronk, R-Tok, on Jan. 28, one day after the governor debuted his plan.“We’re going to tax those people that are productive so everybody gets a check? That don’t work for me. … That’s just not logical to me,” he said.

Lawmakers analyzed the sales tax first, in a series of hearings this week, but because it received such a negative reaction in public testimony, legislators are now wondering if it’s worth considering any other part of the governor’s fiscal plan, given that they are all viewed as one package.

Foster said it doesn’t look like the governor’s proposal could be amended and improved enough to get sufficient support in the Capitol.

“Sometimes, you could say, ‘We’re kind of close on things, and there’s a lot of great areas that we can work on,’ but this one just seems to be — folks are just really, really unhappy,” he said.

There are costs to inaction as well. The Institute of Social and Economic Research recently estimated that the state has missed out on 2-3% of its gross domestic product over the past 10 years because of the lack of a fiscal plan. Without a long-term structure, legislators have gotten dragged into annual debates over the size of the Permanent Fund dividend, which has prevented them from discussing other pressing issues.

Some lawmakers have concerns beyond the sales tax. Johnson thinks the governor’s proposal for a revised fiscal cap is inadequate. Because it would be in state law, rather than in the constitution, future legislators could ignore it just as they do the current Permanent Fund dividend formula.

That’s why she calls it a “spending beanie,” instead of a spending cap.

“I personally think it’s rather small, and it would be easily overcome,” she said. “And for that reason, I think of it as a spending beanie.”

Speaker of the House Bryce Edgmon, I-Dillingham, said he’s skeptical of this proposal’s chances after years of other attempts to enact a fiscal plan.

“I won’t regale you with tales from years past, but on the Finance Committee, we have spent weeks and weeks going through a lot of this stuff, and it never got a compromise when it came to the floor. So that’s the issue at hand here,” he said.

Rep. Calvin Schrage, I-Anchorage and another Finance co-chair, said that after hearing Thursday’s public testimony, he’s not sure the governor’s proposal can be successful either. “There is so much education that still needs to take place and studying that needs to be done for us to be able to move it forward in a way that would get broad support,” he said.

“I think folks are just kind of waiting until next year before we, you know, really take a serious stab at some of those things, like the income tax,” Foster said.

“I have higher hopes for next year than I do this year. You know, a new executive leadership branch and the leadership there,” he said.

Later in the day, in a one-on-one interview with the Alaska Beacon, Dunleavy said lawmakers are going to be disappointed if they think that negotiating with a new governor will be any easier.

Dunleavy is term-limited and leaves office in December.

“A governor who goes in there and puts out a plan like this in their first or second year, they’re going to get the same thing we’re getting now,” Dunleavy said. “And that doesn’t work.”

When an Alaskan flies to Seattle and looks out the airplane window, they’ll see construction cranes dotting the skyline, Dunleavy said.

“Washington is a state that does not have an income tax. It’s a sales tax. Washington’s economy is actually pretty good,” he said.

He referred to a fiscal analysis performed by the Institute of Social and Economic Research at the University of Alaska Anchorage, which found that a seasonal sales tax with large exemptions would fall more on nonresidents than an income tax would.

“The sales tax is the best thing we could come up with,” he said, referring to that analysis.

Reducing the PFD to balance the budget — the Legislature’s preferred policy since 2016 — is the most regressive option, harming poor Alaskans more than rich ones, ISER found.

“Taking the PFD is the worst thing you can do for the average person,” Dunleavy said.

He appeared frustrated by legislators’ actions and the lack of an alternative plan coming from the House or Senate.

“I’ve never seen a fiscal plan introduced,” Dunleavy said. “The closest I’ve ever seen was the first fiscal working group just a couple years ago.”

In 2017, the Alaska House of Representatives approved a state income tax as part of a three-part fiscal plan, but it did not become law.

The state Senate, including Dunleavy, voted down the income tax, killing the House’s plan.

“A tax is not a fiscal plan,” Dunleavy said when asked about that history.

He said that with 120 days in the legislative session, lawmakers have time to work on the issue and figure things out.

“Here you go: My last year, there’s no political skin in the game. I’m not going to lose anything because I’m not running for anything. And here’s an opportunity for these guys, and out of the gate, they said, ‘There’s not enough time.’ So if there’s not enough time for this,” Dunleavy said, “What are they spending their time on?”

The number of out-of-state workers in Alaska is continuing to rise and is near an all-time high, according to a new report published this week by the Alaska Department of Labor and Workforce Development.

In 2024, almost 23% of non-federal jobs in Alaska were held by someone who did not live in the state. Nonresidents earned roughly $3.8 billion, or about 17% of every dollar earned from a non-federal job.

In some industries, the proportion of nonresident workers was much higher:

Among oil and gas workers, 40.5% were nonresidents. Among miners, nonresidents made up 44.2% of all workers, and nonresidents averaged higher wages than residents did.

The state has been collecting nonresident worker data since 1990, and the new figures are the second-highest on record, behind only 1992, which used a different job classification system. That year, 23.7% of Alaska workers were nonresidents.

The proportion of nonresident workers has been rising steadily since the COVID-19 pandemic emergency layoffs of 2020.

Rob Krieger, an economist with the Department of Labor, wrote about the new report in an article for this month’s Alaska Trends magazine.

He noted that the rise comes amid a decline in the number of Alaskans who are between 18 and 64 years old, what economists call “prime working age.”

From 2013 to 2024, the number of Alaskans in that age range has declined by about 34,000 people, or 7%.

During that stretch, more people have moved out of the state than have moved in, and the state’s average age has risen steadily, leading to more deaths and fewer births.

“It’s pretty clear that is kind of what’s contributing to what we’re seeing with employers having to rely heavily on nonresidents,” he said.

“Every industry now is starting to lean more heavily on nonresidents, including ones that have historically not. Even things like state government and local government, we’re starting to see more nonresidents,” Krieger said.

In most industries, nonresidents earned less than residents did because nonresidents tended to hold seasonal jobs.

Across the state, nonresidents averaged $16,302 in wages for any given quarter of the year. Residents averaged $16,531, indicating that nonresidents and residents were generally paid about the same.

Gunnar Schultz, a Department of Labor analyst who compiled this year’s report, said the numbers are based on unemployment insurance reports filed by employers with the state. Alaska requires employers and employees to pay into the state’s unemployment insurance fund.

Those numbers are then contrasted with Permanent Fund dividend applications.

“Did you apply for a 2024 PFD or 2025 PFD? If you applied for neither, you’re a nonresident,” he said.

Alaska had almost 15,500 federal workers in 2024; those aren’t included in the report, nor are members of the military and self-employed Alaskans.

That last category includes many commercial fishermen.

The report separately analyzed those jobs, and based on permit data and other information, “nonresidents were an estimated 49 percent of the harvesting workforce, which includes permit holders and their crew, and nonresidents took in 57 percent of gross harvesting earnings.”