Government

Fifteen Democratic-led states have dropped a six-year-old lawsuit challenging the legality of a federal plan that allowed oil and gas drilling in the coastal plain of the Arctic National Wildlife Refuge in Alaska.

The states announced their plans in a notice filed Monday in the U.S. District Court for the District of Alaska, where the lawsuit was filed in February 2020.

The state of Washington was the lead plaintiff. Mike Faulk, deputy communications director for the Washington State Attorney General’s office, confirmed that the states are dropping their case but said they will continue their opposition to ANWR drilling.

“Washington is proud to have led the multistate lawsuit challenging the 2020 actions regarding the Arctic Refuge,” he said. “New congressional and administration actions require a new course of action on our part. We are evaluating the best path forward to continue to advocate for a clean and healthy Arctic, including supporting the litigation of Alaska Native organizations and community groups.”

The coastal plain is to the east of the vast Prudhoe Bay oil deposits and is believed to hold similarly large amounts of oil and gas. The Trump administration has made drilling in the refuge a top priority as it seeks to expand American oil and gas production.

The other participating states were California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island and Vermont.

A group of environmental and tribal groups had filed suit in 2020 at the same time as the Democratic-led states. Last month, that coalition renewed their suit.

Faulk declined to say whether the Democratic states would be siding with the coalition.

While two oil and gas lease sales have taken place in the refuge and additional sales are expected, no oil drilling or seismic surveying has occurred to date.

The Alaska Industrial Development and Export Authority, Alaska’s state-owned investment bank, won several leases in the first lease sale, which took place in 2021, and is seeking to keep the refuge’s coastal plain open to development.

Last year, Judge Sharon Gleason ruled that the Biden administration had illegally canceled AIDEA’s leases. That ruling has since been appealed to the 9th U.S. Circuit Court of Appeals.

Those cases are separate from the lawsuits challenging the overall legality of the oil and gas program in the refuge.

Sitting in the Legislative Information Office in Bethel, full of hardbound volumes and photos of the state’s political history, Sen. Lyman Hoffman said he’s ready to close the book on his own four-decade career in politics.

“I think it’s, it’s time … the next closest person behind me is 14 years behind me,” Hoffman said.

Hoffman has spent most of his time in the Senate, representing Southwest Alaska. He said he thinks he’s made a difference in the lives of rural Alaskans.

“I funded weatherization, set up a weatherization program where close to 60% of the funds, about $700 million, went into weatherizing people’s homes. People have come up to me and said, as a result of the weatherization program, their heating bill went down by hundreds of dollars a month,” Hoffman said.

Hoffman also cited his creation of a billion-dollar endowment to protect rural electricity subsidies under the state’s Power Cost Equalization program. He does admit that the cost of living in rural Alaska remains staggeringly high.

Hoffman said that his priority in his final session is finding ways to fund the budget. He said that Gov. Mike Dunleavy’s idea of a sales tax is not one of them.

“I haven’t heard anybody that really likes that idea in the legislature,” Hoffman said.

Hoffman said that the proposal to add a 4% sales tax during the tourist season and a 2% sales tax during the other half of the year would run up against local taxing schemes adapted to rural needs.

“He wants no exceptions, no loopholes, no food, heating, fuel. Everything is going to be taxed. And I would say that that would put rural areas at a larger disadvantage because we already pay the highest cost for heat,” Hoffman said.

In Bethel, there have already been long-standing challenges collecting the 6% local sales taxes the city levies. Hoffman said that the governor’s proposal would mean the state would collect taxes on behalf of cities like Bethel, removing that burden. But he said this potential upside is far outweighed by the downsides.

Dunleay’s fiscal plan also proposes a constitutional amendment that would require half of the state’s yearly draw from the Permanent Fund to go toward paying higher dividends. Critics say that would make balancing the budget nearly impossible.

Hoffman said the state might be in a better position today if lawmakers hadn’t stripped down a 2018 bill that used Permanent Fund earnings to cover state operating costs for the first time. Hoffman said he supported a provision to set the dividend at a lower, more sustainable rate. But that idea was rejected.

“If we had passed that bill with that provision in it, the dividend would be $1,500 and continue to grow out in the future. Now, we’re fighting tooth and nail to try to get at least $1,000 in the dividend and fund government,” Hoffman said.

Hoffman said that he has encouraged Dillingham Independent Rep. Bryce Edgmon to run for his Senate seat in November. Edgmon is also the current Speaker of the House. Hoffman said it makes sense because of Edgmon’s record of rural and urban support, and the fact that he’s already represented Kuskokwim River communities within his district.

Hoffman said that he’s concerned that there will be less rural representation on the powerful Senate Finance Committee he co-chairs when he leaves. But he’s optimistic that the bipartisan Bush Caucus he has played a key role in can continue to wield power across the aisle, and that rural issues will continue to get attention statewide.

“The influence of people off the rail belt over the last three decades has been tremendous,” Hoffman said.

Hoffman said that it is critical that legislators form a better working relationship with the governor in 2026. When it comes to ways the state can support ongoing relief efforts following damage from Typhoon Halong, he said Dunleavy has given him an open ear. But Hoffman said specific ideas should come from affected communities.

“The decisions on what needs to be done has to be decided by the local people, and we have to see how we can implement them,” Hoffman said.

Soon, Hoffman will be stepping away from politics. On top of having more time to spend with his wife, Lillian, who he says has been his greatest source of support, Hoffman plans to take time for hunting and fishing around Bethel.

“I’m going to jump on my snowmachine and ride away into the sunset,” Hoffman said.

The 2026 regular legislative session is scheduled to wrap up by May 20.

The head of Alaska’s court system is set to deliver the annual State of the Judiciary Address from the Capitol in Juneau at 11 a.m. Wednesday.

The Alaska Legislature has a tradition of inviting the Alaska Supreme Court’s chief justice to deliver an address each year during session. Chief Justice Susan Carney was appointed to the court in 2016 and became chief justice last year.

Watch Gavel Alaska coverage of Carney’s address live on KTOO 360TV or here, or listen on your local public radio station, including KTOO 104.3 FM and 91.7 FM in Juneau.

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.

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.”

Sen. Lisa Murkowski said in Greenland Monday that she feels terrible for the anxiety her country inflicted on the Danish territory.

“In just a few sentences and words, trust that has been built since World War II has been eroded and degraded,” she told reporters in Nuuk. “We need to work to rebuild that trust.”

Murkowski was the sole Republican among four senators who took the trip to try to repair the relationship with Greenland after President Trump’s repeated threats to acquire the island.

The trip was part of her initiative to bolster what she calls a trans-Arctic alliance. She was part of another congressional trip to Denmark a few weeks ago.

The Greenland crisis seemed to abate last month, when Trump backed off threats to take the Danish territory by military force. But the visiting senators were asked if they could guarantee the president wouldn’t change his mind.

“The answer is no,” said Sen. Angus King, I-Maine, who led the delegation. “We can only exert our role as a separate and co-equal branch of government. But we can’t guarantee what the president may or may not do tomorrow, let alone two months from now.”

Murkowski said Congress will stand up for Greenland, if necessary.

“But I will also speak to the fact that there are some members of my party who don’t want to be seen as engaging in anything that might be viewed as contrary to President Trump’s initiative or desire, and so who may not be speaking out publicly,” she said.

In private conversations, she said, Republican colleagues have assured her they won’t allow Trump to seize or control Greenland.

“I’m going to encourage them that they need to be more vocal in reinforcing that, because this should not be a partisan issue,” she said. “Respect for the sovereignty of another nation, respect for our NATO allies — that should not be Democrat (or) Republican. It should be just pro-democracy”