Alaska lawmakers end their session with late bills passing on energy, education

Alaska lawmakers ended their four-month session early Thursday with a flurry of last-minute bills addressing priority issues such as energy and correspondence school programs that are a focus of ongoing litigation.

Bickering over the budget was muted compared with prior years, and Republican Gov. Mike Dunleavy and legislative leaders claimed successes in a session that was not without drama, marked by twofailed attempts to override Dunleavy vetoes of additional public school funding.

ALASKA LAWMAKERS FAIL TO OVERRIDE OF GOV. DUNLEAVY'S VETO OF EDUCATION PACKAGE

EDUCATION

Education was billed as a top priority, and lawmakers in the bipartisan-led Senate and Republican-led House overwhelmingly passed a compromise package that included a permanent $175 million increase in aid to districts through a school funding formula. But Dunleavy, who had sought charter school provisions and a three-year teacher bonus experiment that divided lawmakers, vetoed the measure.

A veto override attempt failed, along with efforts in the House to cobble together another package. Ultimately, lawmakers settled for pieces including a one-time, $175 million boost to the foundation formula in the budget and additional funding intended to help K-3 students with reading.

Last year, Dunleavy vetoed half of a one-time, $175 million boost to schools but has signaled willingness to support the increase in the just-passed budget.

Sen. Löki Tobin, a Democrat who chairs the Senate Education Committee, said work remained to address issues facing public schools, which "are still going to be struggling" because the funding approved is inadequate. School officials and education advocates had pushed for a roughly $360 million permanent increase in funding.

Tom Klaameyer, president of NEA-Alaska, a teachers’ union, said the Legislature's failure to reinstate a pension offering for public employees also was disheartening. A pension bill narrowly passed the Senate but stalled in the House. Senate leaders said work would continue around retirement issues.

Late in session, lawmakers pivoted to correspondence schools, which allow for students to be homeschooled under the authority of school districts. That focus came after a judge found that laws around correspondence school allotments "were drafted with the express purpose of allowing purchases of private educational services with the public correspondence student allotments." Under the state constitution, public funds cannot be paid "for the direct benefit of any religious or other private educational institution."

Lawmakers passed a bill with provisions aimed at providing stability for correspondence students while the litigation plays out.

"The idea was to be able to give some peace and calm to the people out there, the 22,000 students, who weren’t sure what was going to happen," House Speaker Cathy Tilton, a Republican, told reporters early Thursday.

UNDERGROUND CARBON STORAGE

The second of two bills proposed by Dunleavy as a way to capitalize on interest by companies with carbon emission reduction goals passed, allowing the state to establish a system and protocols for underground storage of carbon dioxide, with an eye toward using pore space in aging gas or oil fields, such as Cook Inlet or on the North Slope.

Lawmakers last year passed Dunleavy's bill allowing the state to set up carbon sequestration projects or to lease state lands to a third party wanting to develop a carbon project. Draft regulations for the offsets program were released in March.

Dunleavy previously pitched the bills as a novel means for Alaska to generate perhaps billions of dollars in new revenue while still embracing fossil fuel production and other resource extraction, such as timber harvests and coal production. But the revenue impact of the proposals remains speculative.

To pay for government, the state relies heavily on oil revenue and earnings from its nest-egg, an oil-wealth fund that has grown through investments. Lawmakers have been reluctant to raise taxes on industries, like oil, and Alaska, with about 737,000 residents, has no statewide sales or personal income taxes.

Rebecca Noblin is the policy justice director with the group Native Movement. In written testimony this month on the underground carbon storage bill, she said the measure "would allow oil and gas companies and coal plants to inject carbon from their operations back into the ground" and will "increase pollution, cost the state money and distract from real solutions to climate change."

ENERGY

The carbon bill, HB50, also included a provision supporters said could encourage more gas production in Cook Inlet. So-called reserve-based lending would allow for the issuance of loans made against and secured by an oil and gas field, proven reserves or other assets of the borrower. Under the bill, loans could be made by the Alaska Industrial Development and Export Authority, a state corporation, for projects it deems necessary to bolster production.

Residents in Alaska's most populous region rely on gas from the aging Cook Inlet basin. But gas availability has become a concern and was a focal point this session. In February, Luke Saugier, senior vice president for Hilcorp Alaska, told lawmakers that while the company is "not pulling back" on investments in Cook Inlet and is committed to developing its leases, gas under its lease holdings can't meet all the region's gas demand. He said other sources of energy are needed.

Sen. Bill Wielechowski, an Anchorage Democrat, said the lending provision could unlock gas fields and end up being "one of the most important things that we have done this year."

Dunleavy’s office also applauded passage of a separate measure that it says would streamline tax and tariff policies "to make new and existing electrical generation projects more affordable."

"That in turn incentivizes independent power producers to move forward on renewable power projects like solar and wind farms along the Railbelt," his office said in a statement.

DIVIDEND

The size of the annual dividend paid to residents has often been one of the major points of contention, contributing to drawn-out or special sessions. But there was little pushback this year, with lawmakers agreeing to a dividend of roughly $1,360 and an energy relief payment of $295.

Legislative leaders pointed to better communication and a balancing of priorities, including what Republican Rep. DeLena Johnson, a House Finance co-chair, called a "solid" state infrastructure budget.