State Government

Former state legislator Jonathan Kreiss-Tomkins, a Democrat from Sitka, is running for governor, he said Tuesday.

Kreiss-Tomkins, frequently known as “JKT,” served in the Alaska House of Representatives between 2013 and 2023. He becomes the 16th candidate and third Democrat to enter this year’s gubernatorial election.

Incumbent Gov. Mike Dunleavy is term-limited and unable to run for a third term.

In Alaska, the top four vote-getters, regardless of political party, advance from the August primary to the November general election. In November, Alaskans use ranked-choice voting to name their preferences.

Kreiss-Tomkins said he’s running because Alaska has big problems and he’s interested in solving them.

“I really enjoy working with people from diverse backgrounds and different viewpoints and perspectives to try to forge compromise and get things done,” he said.

While in the Legislature, Kreiss-Tomkins was a member of the bipartisan, bicameral fiscal working group that in 2021 drafted a plan intended to bring the state’s finances in line over the long term.

Though that plan was never enacted, its components resemble the fiscal plan introduced this year by Gov. Mike Dunleavy.

“We’re in a perpetual budget uncertainty,” Kreiss-Tomkins said, identifying the state’s fiscal situation as his No. 1 issue.

Since oil prices plunged in 2015, legislators and governors have struggled to balance Alaska’s budget on an annual basis, occasionally bringing the state to the brink of a government shutdown.

“We’re living and dying by the price of oil, and we have a structural budget deficit, so the state’s finances are not especially in order, and that is, I think, probably the highest-order problem,” Kreiss-Tomkins said.

He said Dunleavy hasn’t been able to work across party lines and hasn’t been successful with the Legislature. Kreiss-Tomkins contrasted that with his own experience as a member of a Democratic-independent-Republican coalition majority in the state House.

“I feel like we need that same spirit in the executive branch, and if we could have a governor and an executive with that approach and mindset … there’s a tremendous amount of good that we can get done for Alaska,” he said.

Kreiss-Tomkins said the campaign season will show how he differs from the other two Democrats in the race: former state Sen. Tom Begich, and current state Sen. Matt Claman.

When it comes to the number of other candidates in the race, Kreiss-Tomkins said it’s not a bad thing for Alaskans to have so many choices.

“Seeing so many people willing to run sort of reflects the importance of the election and the gravity of the problems facing Alaska,” he said, adding that he expects “some winnowing of the field as time goes on.”

Candidates for Governor

• Former state Sen. Tom Begich (Democrat)
• Former state Sen. Click Bishop (Republican)
• Former Anchorage Mayor Dave Bronson (Republican) and Lt. Gov. candidate Josh Church (Republican)
• Former state revenue commissioner Adam Crum (Republican)
• Current state Sen. Matt Claman (Democrat)
• Lt. Gov. Nancy Dahlstrom (Republican)
• Matanuska-Susitna Borough Mayor Edna DeVries (Republican)
• Kasilof resident Jessica Faircloth
• Anchorage podiatrist and state medical board member Matt Heilala
• Former state Sen. Shelley Hughes (Republican)
• Former state Rep. Jonathan Kreiss-Tomkins (Democrat)
• Author Hank Kroll (Registered Republican) with Lt. Gov. candidate Tommy Nicholson (Undeclared)
• Angoon resident and former teacher James William Parkin IV (Republican)
• Former Attorney General Treg Taylor (Republican)
• Palmer resident Bruce Walden (Republican)
• Businesswoman Bernadette Wilson (Republican) with Lt. Gov. candidate Mike Shower (Republican)

Alaska’s state ferry system is at risk of a partial or total shutdown this summer due to the failure of the federal government to issue a key annual grant.

“Currently right now, we have a shortfall in our budget,” said Dom Pannone, director of program administration and management for the Alaska Department of Transportation and Public Facilities, to members of the Senate Finance Committee during a Monday morning hearing.

Money from the Federal Transit Administration’s rural ferry program pays for almost half of the Alaska Marine Highway System’s operating expenses, but the administration failed to open its annual grant process in fiscal year 2025, which ended Sept. 30.

The ferry system’s budget runs according to the calendar year. Last spring, the Alaska Legislature and Gov. Mike Dunleavy budgeted $171 million for the 2026 ferry budget. Of that, almost $78 million was supposed to come from the rural ferry program.

Without that money, the system could be forced to tie up its ships in midsummer, at the peak of the state’s annual tourist season.

“Right now, we have a federal chaos problem,” said Sen. Jesse Kiehl, D-Juneau and a member of the Senate Finance Committee.

Ryan Anderson, commissioner of the state DOT, said his agency is “looking at several options” to prevent a shutdown of the ferry system.

If a federal grant isn’t delivered, DOT would make significant changes to the summer ferry schedule, which is slated to begin in May.

Anderson said the state could “dispose of the Matanuska,” the state’s oldest active ferry, which has been tied up dockside as a “hotel ship” because of maintenance costs.

The ferry Kennicott, coming out of drydock, or the Columbia, another old mainline ferry, could be tied up as a hotel ship instead of the Matanuska, he said.

On Monday, neither DOT officials nor state legislators could say why the Federal Transit Administration has failed to make grants available.

“What is going on in Washington, D.C.? That’s always a tough thing to work with,” Anderson said.

U.S. Sen. Lisa Murkowski, R-Alaska, secured almost $1 billion in the 2021 Infrastructure Investment and Jobs Act bill for the rural ferry program, which was written in a way to steer much of the money to Alaska.

By text after Monday’s hearing, Murkowski spokesman Joe Plesha said the Federal Transit Administration told her office it will release the FY26 ferry grants this spring but did not give a timeline.

“We are directly engaged with the FTA and working to advance the release of this grant funding as soon as possible,” Plesha said.

When Murkowski got the ferry language signed into law, it was the first time the federal government had significantly funded operational expenses for Alaska’s ferry system.

“In this particular case, it can actually pay for the operations of those (ferry) vessels,” Anderson said, noting that includes operating costs like crew and fuel. That billion dollars was to be spread across five years, and the program disbursed more than $252 million nationwide in FY22, $170 million in FY23 and $194 million in FY24.

Alaska received more than five-sixths of the total distribution in that time, something that allowed Gov. Mike Dunleavy to divert state dollars to other parts of Alaska’s annual budget.

Alaska DOT estimates that about $410 million remains available for the federal government to disburse.

In each of the three prior grant years, it took between 152 and 199 days from the time the grant application period opened to the time the grant was awarded.

That timeline means that even if federal transit officials were to open the grant process tomorrow, a decision might not be made before the start of the summer ferry schedule in May.

Dunleavy and the Legislature could extend the timeline by changing the ferry system’s budget calendar so that it starts July 1 along with all other state agencies, but if there’s still no federal money, that would just extend operations until January 2027, and then the system would face a $150 million cliff instead of a $78 million one.

Sen. Bert Stedman, R-Sitka, said that finding “backfill” money will be difficult in either case.

“Our budgets are getting tighter and taking away the flexibility the (finance) committee has to backfill some of these holes, and this particular hole could be significant, pushing $80 million,” he said.

The ferry funding issue could persist even if the federal transit authority resumes paying grants, because its ferry operations program is set to expire this year.

“What happens when that grant money is gone?” asked Sen. Mike Cronk, R-Tok.

“This year, the surface transportation reauthorization is up for renewal,” Anderson said. “This, we understand, is part of that discussion: Will the rural ferry program continue over the next subsequent four years?”

Anderson said that even if Congress renews the program, the current Alaska-favorable rules might be rewritten.

“Other states are very interested in this program as well because they have a lot of similar challenges,” he said. “Nationwide, there’s support for a program such as this. The questions that are out: How will the rules be rewritten, and how competitive will the program be? That will be the challenge.”

The Alaska House of Representatives passed a bill Friday that would tighten residency requirements for Alaskans buying hunting or fishing licenses.

House Bill 93 aims to ensure that only people who spend enough time each year in Alaska to qualify for a Permanent Fund dividend can buy resident hunting and fishing licenses, which tend to cost less and offer higher bag limits than nonresident licenses.

State law currently limits resident licenses to people who are physically present in Alaska with no plans to leave, do not claim residency in another state and have maintained a home in the state for 12 consecutive months. But it does not require that resident hunters and fishermen actually live in the state for a full year.

Rep. Rebecca Himschoot, a Sitka independent who sponsored the bill, said that definition leaves a big loophole.

“The last point means that we allow someone who rents a room in a home from friends, or someone who has a liveaboard boat that’s on a trailer but actually is in the state for less than a month — less than two months, potentially less than a week — to hunt and fish and enjoy the higher bag limits that are reserved for residents who are here year-round, shoveling snow, volunteering in their communities and putting their kids in our schools,” Himschoot said.

Himschoot’s bill seeks to close that loophole. If the bill becomes law, Alaskans would have to be physically present in the state for at least 180 days each year to get resident licenses, though there would still be numerous exemptions, including for military servicemembers, students and others allowed to be outside the state while remaining eligible for Permanent Fund dividends.

In some cases, people ineligible for dividends would still be eligible for resident hunting and fishing licenses. For example, new Alaskans moving to the state would be eligible for resident licenses 12 months after they arrive. Permanent Fund dividend eligibility rules generally require new residents to live for an entire calendar year in the state, from Jan. 1 to Dec. 31, before applying for a dividend.

People who do not qualify for a resident license would have the option to buy a nonresident license instead.

The deputy director of the Alaska Wildlife Troopers, who enforce fish and game laws, told a House committee in 2024 that the current definition makes it difficult to prosecute people who violate the residency requirements. By contrast, state prosecutors often bring charges against people who fraudulently apply for Permanent Fund dividends.

“The problem is that our enforcement officers don’t have the right tools,” said Rep. Donna Mears, an Anchorage Democrat.

A wide range of local governments, tribes and fish and game advisory committees spread across the state backed the bill.

Twelve House Republicans opposed the bill, including Big Lake Rep. Kevin McCabe, who said he was concerned the bill would exclude some Alaskans from the benefits of a resident license.

“What about those pilots that have vacation homes elsewhere, that would like to go spend two months in Hawaii, say, and then they have to fly out of state for 15 days a month?” McCabe said.

The bill, however, had broad support and passed with a bipartisan two-thirds majority in favor.

“Is there a problem? I think that we all acknowledge there is,” said Rep. Dan Saddler, an Eagle River Republican. “Is this a solution? I think it is. Is it the perfect solution? No, it’s not. But we don’t deal in perfect and ideal. We do what’s best and what we can do.”

The bill now heads to the Senate, which passed a similar bill in 2024.

“An Alaskan is and always will be an Alaskan,” Himschoot said. “But if you live outside Alaska, and you enjoy those lower prices at the grocery store and other costs of living that are much reduced compared to what we experience here in Alaska — if that is you, we ask you to please hunt, fish and trap as a nonresident.”

Juneau residents might have to pay sales tax again on food and utilities, despite approving a local exemption during last fall’s municipal election. 

That’s because Gov. Mike Dunleavy recently proposed a statewide sales tax as part of his fiscal plan meant to stabilize the state’s finances. 

At a community town hall event Thursday evening, Juneau’s three state lawmakers weighed in on the governor’s plans and other topics at play this legislative session. Democratic Juneau Sen. Jesse Kiehl said the governor’s sales tax proposal, as written, would override Juneau’s local exemptions.

“The governor’s proposal would be to override that and to allow no variation,” he said. “I think that’s a bad choice, especially because it impacts people with a sales tax who struggle most to get by.”

Dunleavy’s proposed sales tax – Senate Bill 227– would follow a seasonal structure, set at 4% from April through September and 2% for the remainder of the year. That would be on top of Juneau’s existing 5% sales tax on most items. If passed, the state sales tax would expire in 2034 and provide between $735 million and $815 million of revenue to the state each year.

The governor’s proposal might sound familiar, because this past municipal election, the Juneau Assembly proposed implementing a similar seasonal sales tax at the local level to take advantage of the 1.7 million cruise passengers that come to town each summer. While voters shot that down, they did approve an exemption for essential food and residential utilities from local sales tax. 

Kiehl said he thinks a moderate state income tax would be a fairer way to raise additional revenue for the state while not disproportionately affecting low-income residents. At the town hall meeting, Democratic Juneau Rep. Sara Hannan agreed. She said Alaska needs to stabilize its revenue with its expenditures. 

“A state sales tax on top of local sales tax makes things really burdensome,” she said. “But right now, this is the first time we’ve been able to get the governor to use the word tax and not choke, so that’s a step forward.”

Some Alaska Senate leaders have said they’re skeptical the governor’s plans will pass the Senate this year. Leaders in the state House similarly said they’re not optimistic Dunleavy’s plans will pass this year, which is his last as governor. The House Finance Committee plans to hear public testimony on the tax proposal at 5:30 p.m. Thursday, Feb. 5.

KTOO’s Jamie Diep contributed to this report. 

A new nonpartisan report by the Institute of Social and Economic Research at the University of Alaska Anchorage has concluded that raising oil and corporate taxes to balance Alaska’s budget likely has the lowest negative side effects for Alaskans’ jobs and income.

The report, eagerly anticipated by state lawmakers and experts, comes as legislators consider ways to balance Alaska’s expenses and revenue over multiple years.

Commissioned by the administration of Gov. Mike Dunleavy, the report was released days after the governor debuted a plan intended to bring Alaska’s expenses and revenue in line.

Since 2015, when oil prices plummeted, Alaska has struggled to balance its budget on an annual basis despite steep cuts to state services. At times, the tug-of-war between services and the Permanent Fund dividend has driven the state to the brink of a government shutdown.

Figures from the Legislative Finance Division, which advises the Legislature on fiscal issues, show state agencies have had their budgets cut by 16.6% when adjusted for inflation since Fiscal Year 2015.

During the same period, lawmakers have passed no significant revenue measures. Dunleavy, who opened his first year in office by proposing massive budget cuts, hasn’t proposed significant reductions in recent years and is now suggesting a statewide sales tax and other revenue measures are needed for the state to keep up with spending.

ISER’s analysis of the situation was keenly awaited by state legislators and other experts, who crowded into a ballroom at Juneau’s convention center on Thursday morning to hear its economists deliver their report.

A 2016 analysis by ISER remains widely consulted in the capitol and was a contributing factor to lawmakers’ decision to begin using the Alaska Permanent Fund as a trust fund two years later. Legislators installed an annual transfer from the fund to the treasury for dividends and services, and it’s now the No. 1 source of general-purpose state revenue for Alaska, accounting for almost two-thirds of the state’s flexible spending each year.

The report released Thursday concluded that Alaska’s unstable fiscal situation has created so much uncertainty that it’s lowered Alaska’s real gross domestic product growth by 2-3% over the past decade, the equivalent of billions of dollars, said Brett Watson, an economist with the Institute of Social and Economic Research and the lead author of the report.

Alaska’s GDP — the value of all goods and services in the state — is about $70 billion and ranks near the bottom of U.S. states in terms of growth over the past decade.

ISER examined 11 different options to balance the state budget, including spending cuts, cuts to the Permanent Fund dividend, income taxes, sales taxes and business taxes.

Raising business and oil taxes would have the lowest negative impact on jobs and income, while cuts to services would have the biggest negative effect on them, the report found.

Reducing the Permanent Fund dividend to balance the budget — which has been the existing legislative policy for the past several years — has similarly large negative effects on income, but smaller negative effects on employment. Poor Alaskans are affected more by a PFD reduction than rich Alaskans, making it the most regressive option.

Among statewide taxes, a progressive income tax would have the biggest negative impact on high-income Alaskans and the lowest negative impact on low-income residents.

Nonresidents would pay 27% of a statewide sales tax with many exclusions — food, utilities, and health care, for example — making it the option with the least direct impact on individual income among broad-based taxes.

Corporate and oil taxes have a lower impact overall, ISER concluded.

Making a sales tax higher in the summer and lower in the winter “shifts the burden toward visitors, reducing the impact on Alaska families by 2-5 percentage points per dollar raised,” ISER concluded.

Dunleavy’s fiscal plan includes a seasonal sales tax as one of its pillars.

ISER also concluded that its models suggest that it is possible to come up with “a budget neutral combination that stimulates growth.”

“For example,” its report states, “coupling a less distortionary revenue source (like property tax) with expansionary spending (like capital project investment) can result in a net increase in total employment.”

Imposing a statewide property tax and a broad corporate tax cut in combination, ISER suggested in a slide presented to lawmakers, would result in increased employment and personal income by 2050, it estimated.

The effect of each tax or cut was examined independently, Watson said, in $100 million chunks.

“You can think about these as items on a buffet, and you kind of scoop from them different serving sizes as you construct a plate that is a state fiscal plan,” he said.

ISER also considered things linearly — economists didn’t try to predict whether Alaskans would react differently if a sales tax went from 5% to 6% instead of from 0% to 1%.

“In reality, it is likely that there are certain important thresholds that if you turn that dial too far, consumers start reacting in more and more aggressive ways to it, but we assume that their reaction is the same, regardless of what the level set is,” he said.

Watson said there is a cost if lawmakers do nothing. In addition to the GDP penalty caused by uncertainty, the state remains vulnerable to what’s called the “Alaska disconnect.”

Imagine, he said, if “something crazy would happen and one of the Silicon Valley tech giants were to announce that they were going to create a Silicon Valley of the north somewhere in Alaska and that they would move 100,000 employees somewhere in Alaska and create this northern hub of tech.”

“It would be absolutely catastrophic from the standpoint of the state of Alaska budget,” he said. “There would be 100,000 new Permanent Fund dividends to pay, the children of 100,000 new employees to educate, more roads to maintain, more state services to provide, without any additional revenue collected for any of those individuals. And so there’s this disconnect now that’s growing between our private sector economy and what goes on in our public sector.”

The Alaska state House’s ethics committee has launched an investigation into whether Homer Republican Rep. Sarah Vance illegally used state resources when she successfully pushed the local newspaper to remove and revise a story.

Vance objected to a Homer News article about a vigil she helped organize after the assassination of conservative activist Charlie Kirk. The article described Kirk’s views as “racist and controversial” and said Kirk promoted conspiracy theories.

Vance accused the paper of “hate-baiting” and raised concerns about the impact of what she called the newspaper’s “partisan spin” on the paper’s financial viability. She listed her objections in a letter on state letterhead that she posted to her official Facebook page.

The newspaper’s owner, Alabama-based Carpenter Media Group, then removed, revised and reposted the story without the reporter’s byline. Carpenter, now the U.S.’s fourth-largest newspaper operator, told the Columbia Journalism Review that the article did not meet its standards.

State law prohibits legislators from using public resources for “nonlegislative” or partisan political purposes.

The House Subcommittee of the Select Committee on Legislative Ethics said it had received “numerous complaints” about Vance’s conduct and that the allegations, if true, would violate state ethics laws. It opened an investigation in November and determined the scope of its review on Jan. 15.

“There is credible information to indicate that further investigation and proceeding is warranted,” reads a portion of a document outlining the investigation obtained by Alaska Public Media.

Two lawmakers serving on the committee — Republican Rep. Kevin McCabe and independent Rep. Alyse Galvin — declined to comment on the investigation.

In an interview, Vance defended the move and said she was asking to have the complaint dismissed.

“I believe that I was acting within my legislative duties,” Vance said.

Vance said she was aware of advisory opinions from the ethics committee covering “many examples of similar instances,” including one that allowed the use of state letterhead for political endorsements.

In a 1984 opinion, the ethics committee said it was not a violation of ethics laws to use official letterhead to endorse a candidate for office. However, lawmakers have significantly tightened state ethics laws since then, including in 1998, when the Legislature explicitly prohibited lawmakers from using state resources for partisan political purposes.

Ethics committee investigations are typically confidential, but Vance waived that protection in the interest of transparency, she said.

“I consider this a form of lawfare, using the ethics committee against me for something that they disagreed with,” she said.

The committee is asking Vance to provide copies of her communications with Carpenter Media, an explanation of the “legislative purpose” of the letter and why it was posted to her official social media account on state letterhead, how the letter was drafted, and what funds were used to draft and distribute it.

Vance’s letter and Carpenter’s response led to an exodus of editorial staff at the company’s three Alaska newspapers, including its top editor in the state, and indirectly to the creation of a new nonprofit online news outlet, the Homer Independent Press.

Vance applauded the new outlet.

“We need local journalism,” Vance said. “People in the community have come together and said, ‘We want a local paper to talk about local issues,’ and I fully support that, because we need that local voice in our small community.”