Alaska State Building in Juneau Alaska

Alaska State Legislature

There weren’t many bills that passed the Legislature is its regular 2021 session that ended May 19. That isn’t unusual in the first session of a two-year Legislature, particularly one like this year’s with a large number of first year “freshman” lawmakers and a one-month delay in the state House getting organized.

At the end of the session, as adjournment loomed, legislators were also preoccupied with the Permanent Fund Dividend, and how big it will be, as a part of the budget.

The PFD diverted legislators’ attention from other legislative matters.

One measure that made it through the gate was a bill bringing Alaska’s existing small industrial hemp program, which operates under a “pilot” basis, into compliance with new federal law and setting the stage for expansion of hemp agriculture and the manufacture of hemp products in the state.

Among other bills that made it across the finish line was a proposal that would facilitate reciprocal professional licenses for military spouses who hold licenses in other states and are in military families transferred to Alaska. 

Educated and trained military spouses can bring valuable skills in fields like teaching and health care to the state, but complex licensing rules often impedes their ability to work in their fields. At the same time, two-income households are almost a necessity in Alaska, where living costs are high and military pay is not always generous.

While just handful of bills made it all the way through the House and Senate, and to Gov. Mike Dunleavy’s desk, legislators did work on several substantial bills and pushed them far enough along that they are well positioned to be enacted next year.

In the first year of a Legislature bills that are not passed are held over and are still active in the second session.

One important bill that is pending proposes a major expansion of early learning and reading programs for children from pre-kindergarten to fourth grade. Building reading skills so children can read at grade level by fourth grade had been a goal of Gov. Mike Dunleavy, who is an educator.

There are now just a handful of public school “Pre-K” programs for four and five-year-olds as well as several that are operated by nonprofits including Head Start, but there are no uniform standards as to how these operate, and whether they attain performance goals.

The bills now pending in the House and Senate Finance committees, would have the state Department of Education and Early Development set the standards and require school districts and nonprofits operating community programs to meet them.

The legislation would also provide state financial support for early learning as an incentive for school districts and allow the costs to be included in the district’s allocation under the school “foundation” formula, which allocates state support for schools.

The legislation also provides resources to school districts to boost reading instruction at lower grade levels. Alaska has scored last among 50 states in the nation in fourth grade reading proficiency.

Another bill of significance is a proposal by the governor for a new state lending program aimed at energy efficiency, smaller-scale renewable energy, reduction of carbon in emissions and other projects that enhance sustainable energy.

The proposal would appropriate $10 million to the Alaska Industrial Development and Export Authority, the state development finance corporation, which would coordinate lending in partnerships with banks and other entities including the federal government.

AIDEA now operates similar lending programs with banks in helping finance commercial development projects.

Like the early education bills, this proposal advanced in separate bills through the House and Senate and are both now in the finance committees of both bodies. Both proposals are backed by influential groups, such as education community for pre-K and early reading, and conservation groups and rural communities in the case of the energy legislation.

Meanwhile, the special session is continuing in Juneau with a House-Senate budget conference team meeting to iron out differences in budget bills passed by the two bodies. 

The biggest difference is on the Permanent Fund Dividend. The House-passed bill has no dividend, and the Senate budget has one that follows the governor’s proposal for a “50-50” PFD, meaning one that splits the annual “percent of market value,” or POMV payment to the state General Fund from Permanent Fund earnings.

The POMV now pays about $3 billion a year to the General Fund, the majority of revenues supporting the budget. Taking 50 percent of this for the PFD would take half of the $3 billion, creating a $1.5 billion deficit.

In a close vote the 20-member Senate voted against adopting a “full” PFD, or one following a state statute that has been on the books since the 1980s. The governor has proposed changing the statute to the 50-50 formula adopted by the Senate for next year’s state budget.

Dunleavy also put “new revenues” on a list of topics for a second special session in September but has not made a specific proposal on this. In a briefing last Friday Senate President Peter Micciche, R-Kenai, said several legislators support the idea of a broad, modest state sales tax along with an “adjustment” in oil and gas taxes, which would presumably be an increase in tax.

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