Government

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.”

After proposing to build a new cabin near Juneau’s Herbert Glacier, the U.S. Forest Service released a draft decision last month abandoning it. 

The cabin site was initially selected due to public interest. It would have been built within a mining claim block across the river from the proposed New Amalga gold mine owned by Grande Portage Resources, Ltd. The Forest Service approved exploratory drilling at New Amalga in April. 

But Paul Robbins, a public affairs officer for Tongass National Forest, said the agency’s decision to cancel the cabin is unrelated to mining interests and is instead due to the challenging location and limited staff capacity. This comes after the agency lost a third of its staff in Alaska last year. 

“The proposed cabin site’s elevation, distance from the trail, design requirements and the need to move materials through difficult terrain all add to the complexity of that cabin project,” Robbins said.

He said the agency’s landscape architects and engineers could be overwhelmed with work if they moved forward with building the cabin.  

But some residents in Juneau submitted public comments saying they don’t believe those reasons are genuine. 

“Cancelling the project seems to be influenced by mining interest across the river which would inherently be hard to make compatible,” wrote Riley Moser, a Juneau resident. “It appears that the Forest Service is bending to corporate interests instead of listening to the needs and concerns of the public.”

Staff from the Alaska Miners Association and Grande Portage submitted comments to the agency before the draft decision, saying that building a cabin near the proposed mine could lead to disputes over how the land is used.

“Selection of a site to be used for recreational lodging, which can be easily placed anywhere, within an area of active mineral exploration could unnecessarily invite land use conflicts that do not and should not exist, and could incite litigation and appeals for years,” wrote Deantha Skibinksi, executive director of the Alaska Miners Association.

Kyle Mehalek, a technical specialist at Grande Portage, wrote that “it would be incredibly challenging, likely impossible, to protect the proposed cabin from potential visual and noise impacts with the same effectiveness as the existing trail.”

The cabin would have been part of the Alaska Cabins Project, the Forest Service’s biggest public-use cabin expansion plan in 50 years, which plans to bring around 25 new cabins to the Chugach and Tongass National Forests, including four in Juneau at Mendenhall Campground, Montana Meadows, Treadwell Ditch Trail and Dupont Beach.

Robbins said cancelling this cabin won’t affect the other proposed cabins. He said the Forest Service plans to reroute part of Herbert Glacier Trail and build a scenic overlook there instead. 

Although there is a lot of public support for building a cabin near Herbert Glacier, Robbins said the agency is unlikely to change course.

“Only because our decision was based on the complexity and capacity, not on whether or not the site was popular,” he said. “We know the site is popular, that’s why we wanted to initially build a cabin there.”

A public comment period to object to the cancellation closes March 9.

If you ask Gov. Mike Dunleavy, a lot of the state’s problems come back to the budget process.

Every year, lawmakers gather in Juneau for four months and spend much of that time debating how the state should spread around its limited funds: how much for education, how much for public safety, and for the last decade or so, how much the Permanent Fund dividend should be.

Meanwhile, much of the state’s revenue depends on the constantly swinging price of oil. Dunleavy says investors who might otherwise bring jobs and new residents to the state have noticed.

“We know that this volatile budgetary process has negatively impacted our ability to recruit investment to the state. It has retarded our GDP growth. It has caused deep fractures within this body and within other relationships, and it leads to uncertainty in funding for critical programs,” Dunleavy told lawmakers and Alaskans in his State of the State speech.

In the days after his speech, Dunleavy filed a series of bills outlining a fiscal plan that he believes would make the budget more stable by boosting revenue and cutting expenses.

It’s a problem Alaska has wrestled with for years: the state spends more than it takes in. Since oil prices crashed in the mid-2010s, Alaska has drawn down billions from its savings accounts, cut government spending and reduced residents’ Permanent Fund dividends in an effort to ensure schools, state troopers, highways, ferries and fish and game management are funded.

Most of the money Dunleavy’s multifaceted plan would raise would come from a sales tax — 4% in the summer, 2% in the winter. The plan would also hike oil taxes, add a new per-barrel surcharge for pipeline corridor maintenance, and capture more money from Outside businesses. It would all be temporary, roughly five to seven years — and in 2031, corporate income taxes would vanish entirely.

On the expense side, it would put a 1% cap on state spending growth every year. That’s not adjusted for inflation. So if inflation runs more than 1%, state spending shrinks. (For reference, the Federal Reserve targets 2% inflation each year; in 2025, inflation was 2.7%, according to the Bureau of Labor Statistics.)

An additional check on expenses in Dunleavy’s plan is what’s known as a sunset review — lawmakers would periodically have to vote to reauthorize various pieces of government.

Dunleavy’s plan would also take Permanent Fund dividends out of the state’s annual budget debates by putting it — and a new formula — into the state Constitution.

“At no point do any of these things add up to get to a balanced budget,” said Neil Steininger, a former Dunleavy budget director who crunched the numbers for the Alaska Political Report, a subscription newsletter.

For one thing, Dunleavy’s plan would fully drain the state’s $3 billion rainy day fund by the end of the 2033 fiscal year, according to Steininger’s analysis — not exactly resolving the state’s budget issues.

For another, Steininger said, the effect of the changes would ultimately make the state’s revenue just as volatile, if not more — exactly what Dunleavy is trying to avoid.

That’s a result of Dunleavy’s proposed formula for dividends, which would take half of the state’s annual draw from the Permanent Fund and split it 50-50 between state services and dividends.

The fact that so much “stable, reliable” investment revenue would be tied to dividends would make the state more dependent on the price of oil, Steininger said.

“That’s a position we’ve been in already,” Steininger said. “That’s actually nothing new. It’s just really cementing that into the Constitution.”

The governor has not held a news conference or granted interviews to discuss his plan since the bills were released, but his office’s projections are substantially rosier.

An updated 10-year plan from his Office of Management and Budget shows a surplus in the early 2030s, peaking at roughly $300 million, before returning to large deficits in the 2035 fiscal year. But the governor’s office still projects the plan would draw down half of the rainy-day fund over 10 years, including a $1.4 billion withdrawal in the coming year.

Dunleavy has argued revenue from things like a boom in oil drilling or a new gas pipeline would help the budget balance in the long term.

“We’re going to be going into what I believe is going to be a more revenue-prosperous era,” he said at a Cabinet meeting before the plan was released.

But that future revenue is speculative, and thus doesn’t show up in state economists’ “cold and sober” revenue projections that lawmakers build the state’s budget around, Steininger said.

“Part of it is because a lot of that stuff will take a long time before it impacts state revenue,” Steininger said. “Even though 10 years feels like a long time … it’s not that long when it comes to trying to get a project permitted, moved and actually delivering revenue to the state coffers.”

Dunleavy’s Department of Revenue presented a newer fiscal model to lawmakers on Thursday, which accounts for revenue from the proposed Alaska LNG project and a new split of oil revenue from the federally-owned National Petroleum Reserve Alaska in the Western Arctic enabled by President Trump’s signature tax- and spending-cut bill.

“That modeling does roughly balance” even after the taxes expire, Department of Revenue Chief Economist Dan Stickel said to lawmakers on Thursday.

So far, the plan has landed in Juneau with a thud. Speaker of the House Bryce Edgmon, a Dillingham independent, said alongside other legislative leaders on Talk of Alaska on Tuesday that he’s not optimistic about its chances.

“The early analysis that we’ve done … would suggest that the governor’s plan, in its totality, would actually increase our problem, it would not lessen it,” Edgmon said.

Even Dunleavy’s traditional allies are skeptical — the Republican House minority leader, Palmer Rep. DeLena Johnson, called his plan “incomplete.”

“I think it’s very difficult to ask your average, hardworking Alaskan to increase their grocery budget” without a serious analysis and reduction of government spending, Johnson said.

But where does that leave state leaders’ search for a solution?

Edgmon and his Senate counterpart said they were intrigued by what they recently heard from a panel of University Alaska Anchorage economists who studied a variety of options at the request of the governor.

Senate President Gary Stevens, a Kodiak Republican, says he was interested in the economists’ conclusion that raising taxes on corporations and oil and gas would have the smallest impact on the state’s economy.

“It’s much more stressful on folks to have a sales tax or an income tax,” Stevens said. “(It’s) easier to accumulate a little higher tax on the industry.”

But in the last year of Dunleavy’s term, Stevens said, it might be too late for this governor to solve the problem.

The House Finance Committee is taking public testimony on Dunleavy’s tax bill, House Bill 284, at 5:30 p.m. Thursday. There’s more information on the Public Testimony Opportunities page at akleg.gov.

The Juneau Assembly has some big financial decisions to make in the coming months. That’s because the city faces a multimillion-dollar budget hole that could result in cutting some city services in order to stay afloat. 

Along with figuring out how to balance the city’s budget, the Juneau Assembly will need to decide in the coming months whether a temporary tax and two bond debt proposals will appear on October’s municipal ballot. 

“I think at the end of the day why we put things on ballots are to give voters the choice. If they don’t want to fund these things then they won’t. We don’t lose anything because of that,” said Christine Woll, an Assembly member and finance committee chair. 

At a finance committee meeting Wednesday night, the Assembly discussed whether to ask voters to renew a 3% temporary sales tax currently in place, along with putting two bond packages on the ballot to fund critical repairs and upgrades to Juneau schools and the city’s water and sewer systems, which proponents say are sorely needed.

Juneau currently charges 5% in local sales taxes. That’s made up of both permanent and temporary taxes. 

Of that 5%, 3% is a temporary tax, which Juneau has had in place for decades. Voters approved extending it for five years in 2021. It expires in mid-2027. The money collected from that 3% tax currently goes toward numerous city services, like police and fire, street maintenance and snow removal, and general government operations. 

City Finance Director Angie Flick said the money is fairly flexible. 

“Really your roads, drainage, retaining walls, sidewalks, stairs, and we’ve been doing some utility work in that realm as well,” she said. 

At the meeting on Wednesday, some Assembly members were hesitant about whether to put the questions on the ballot. That’s because tax questions dominated last fall’s election and because the city is in a time of budget uncertainty. 

When it comes to bonds, Juneau voters approved adding nearly $23 million to the city’s debt in 2024 for public health and safety improvements. But last year, the Assembly narrowly voted against putting school and water and sewer systems bonds on the 2025 ballot because of how crowded the ballot was already. 

Assembly member Paul Kelly said he is still undecided on whether he wants to put them both on this year’s ballot, but he’s interested in approving at least one. 

“I’m interested, for sure, in the general obligation bond for schools,” he said Wednesday. 

Despite the initial discussion, the temporary tax and bond packages still need to go through a few committees before the Assembly votes on whether to put them on the ballot. This year’s municipal election is on Oct. 6.