Senate majority says PFD, carbon, lawmaker salary legislation are still a work in progress

Predictable policy challenges facing the legislature since January persist
FastCast digital headlines for Wednesday, March 22, 2023.
Published: Mar. 22, 2023 at 10:45 AM AKDT
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JUNEAU, Alaska (KTUU) - Alaska Senate Majority members discussed various topics during a press conference Tuesday, including revenue forecasts, carbon plans, lawmaker pay, the Permanent Fund and more.

Sen. Gary Stevens of Kodiak said that the House invited them to a joint session to be held Wednesday to override Gov. Mike Dunleavy’s veto of SB 86, rejecting the Compensation Commission recommendations, which would significantly raise salaries for the governor, lieutenant governor, department heads and legislators.

That joint session would be a response to what Sen. Stevens says this is the latest in what has been a long process.

“For 10 years, the legislature has received no raise,” Stevens said. “And it was a concern. When we got the first report, we were concerned about it, and we prepared a bill to address compensation.

“We talked to the governor’s office, and he knew our concerns.”

Sen. Bill Wielechowski of Anchorage said he reached out to legal offices to clarify the next steps and is awaiting more information.

“If the legislature truly wants to, or if the House wants to override this salary commission report was to file a piece of legislation, and run it through the process, and have that enacted into law,” he said.

Another major subject that arose during the press conference was state finances. Sen. Bert Stedman of Sitka took a question on the House proposal to vote on dipping into the Congressional Budget Reserve (CBR), hours before Dunleavy shared the latest data from the Department of Revenue of near-term revenue projections.

“I would expect the senate would support a three-quarter vote to access the CBR, not only in ‘23 but in ‘24,” Stedman said. “We’re going to do our best on the budget to keep costs down, but we can’t control the prices of oil. And when they do dip, we have to react to them.”

Increasing the state’s revenue is a challenge for Alaska and other states without an income tax or statewide sales tax and year-round economic reliance on one resource, such as oil.

One possible solution is diversifying long-term revenue generation plans to develop Alaska’s resources, according to Sen. Cathy Giessel (R-Anchorage).

Giessel addressed the topic of the governor’s carbon plans as partial answers to the problem as potential revenue generators.

Dunleavy introduced legislation to open public lands to a carbon credit and carbon sequestration program.

Investing in carbon credit is akin to a permission slip for someone or a company to release greenhouse gases into the air, but only if they also do things to make up for the damage that the emissions cause, according to the governor’s legislation. Carbon sequestration seizes harmful emissions and traps them, removing them from the atmosphere to mitigate the harm they otherwise would cause while also profiting off the capture.

Proponents of carbon management programs say that they make pollution more expensive, encouraging people and businesses to adopt cleaner and “greener” technologies.

Giessel confirmed that the Senate is waiting for the House to send over their markups to the carbon credit legislation.

While the final payoff is impossible to predict at a granular level as the bills make their way through the committee process, the long-term benefits have already tempted lawmakers to support them.

“Frankly, our resources team finds that while we don’t see revenue in the immediate future from those carbon bills, it’s certainly a possible opportunity that the state should explore further,” Giessel explained.

The discussion then moved to the House’s proposed calculation of the Permanent Fund Dividend, further questions about the salary commission, and a proposal to increase the Base Student Allocation (BSA) to help pay for education costs.

Sen. Lyman Hoffman of Bethel said the annual scramble to calculate the PFD is “not good public policy.”

“I think we as a state need to resolve what the dividend equation is,” Hoffman said. “Everyone realizes the current law is broken and needs to be fixed.”

Sen. Donny Olson of Golovin concurred, stating that he and other lawmakers have been looking for a solution to solve the longterm fiscal plan for a while.

“Having been here for just over 20 years, that has been the longest-lasting question I’ve had since I first came down here,” Olson said. “The 25/75 solution is one parameter we’re looking at right now.”