Five things to watch in Alaska’s legislative session

With Alaska state legislators set to be sworn in Tuesday, the coming legislative session heralds a new bipartisan coalition in the state Senate, disarray in the House and a continuation of the seemingly unshakable debate about how to calculate the Permanent Fund dividend.

Here are five things to know before the session begins.

1. The Senate has a game plan.

Seventeen of the 20 Senate members announced in November that they would form a bipartisan caucus with nine Democrats and eight Republicans, and they appear well on their way to forming policy goals for the coming session. Those goals include increasing public education funding and creating a new pension plan for state employees, according to Sen. Gary Stevens, who is set to become the chamber’s president when the Legislature is sworn in.

Fifteen of the 17 caucus members met in Girdwood earlier this month to talk about priorities for the session. Gov. Mike Dunleavy met with members of the caucus at their Girdwood retreat, and senators described those meetings as productive.

“It was not a time to make final decisions on where the caucus is going, but it was a time for us to get together, get to know each other,” Stevens said. While the incoming senators agreed broadly on the need to fund state services such as education, the details remain vague, including the possible size of an increase to education funding and the size of the Permanent Fund dividend.

“We’ve agreed that even though we are Democrats and Republicans, conservatives and moderates and liberals, we will only deal with those things that are in the center, and not deal with those issues that are in the fringes,” Stevens said.

[ADN Politics podcast: The Alaska Legislature is about to gavel in. Here’s what to expect.]

That means that legislation relating to hot-button social issues, such as abortion access and LGBTQ rights, will likely get little or no attention from the chamber as it seeks to find areas of common ground. It also means that legislation to eliminate ranked choice voting and open primaries — two components of the new voting system first used in Alaska last year — would likely not be passed by the chamber, after some of its elected members appeared to benefit from the new system.

Sen. Bill Wielechowski, an Anchorage Democrat, said the Senate Education Committee would take the lead on crafting a bill to increase school funding in that chamber. Wielechowski, a member of the majority coalition, said he expected a new school funding proposal would be rolled out within a few weeks of the Legislature convening, once educators and administrators have a chance to address lawmakers.

As for the three members of the new Republican Senate minority, they are set to have a limited role in setting the agenda for the chamber and advancing legislation. That’s because of the sheer size of the majority and lingering bad blood.

Wasilla Republican Sen. Mike Shower has had a fractious relationship in recent years with some of his moderate Senate GOP colleagues. As a member of the minority, he was pessimistic that any of his bills to rewrite the state’s election laws would pass.

“I don’t expect anything to happen,” Shower said. “That’s just how it works.”

2. The House is not in order.

While the Senate has already announced committee chairmanships and some priorities, the 40-member House is still in disarray. Republicans will hold 21 of the chamber’s seats but have so far not indicated that they have put together a coalition that can elect a speaker and hold the majority. That group of 21 Republicans holds divergent governing strategies that seem to be keeping them from coming together.

One Republican in particular — Rep. David Eastman of Wasilla — has a reputation of holding controversial views and employing obstructionist tactics that make other Republicans averse to working with him. One idea is to exclude him from a potential Republican majority.

[Oath Keepers member from Alaska will keep his state House seat]

As of last Friday, Rep. Cathy Tilton, a Wasilla Republican, said Eastman had not been part of discussions about joining a GOP-led House majority caucus.

A bipartisan coalition composed primarily of Democrats and independents, along with some Republicans, has controlled the House for the past six years. Some veteran lawmakers are trying to put together a similar caucus this year, but they need to lure newly elected Republicans to their side to cross the 21-member threshold necessary to elect a speaker.

Tilton, who has served as House minority leader for the past two years, is optimistic that a Republican-led caucus can form a majority. Offers for key leadership positions have been floated, but no deal has been finalized.

[Anchorage Democrat is qualified to hold state House seat, Alaska Supreme Court rules]

Cautionary tales abound of making organization announcements prematurely. After the 2018 election, House Republicans said they had the numbers to form a majority caucus. The deal fell apart.

Rep. Calvin Schrage, an Anchorage independent, has served for the past two years as a member of the bipartisan House majority caucus. He said he would be open to joining a caucus led by Republicans but he hasn’t heard them articulate a vision.

A goal shared across the political spectrum is to avoid the protracted organization delays seen in the House over the past four years. In 2019, it took the House 31 days after convening to form a bipartisan majority caucus. Two years later, it took 24 days. While the House was unorganized, representatives were unable to hear any bills or hold any committee meetings, grinding legislative work to a halt.

With neither a bipartisan caucus nor a Republican caucus able to form a majority — and days left before the session is set to begin — lawmakers are considering a new model inspired by the Senate’s supermajority.

“I think maybe some people should start to consider the possibility of it being a more balanced (caucus), not dominated by one party or independents or Republicans or Democrats, but an organization that is formed around uniting principles,” said Rep. Dan Ortiz, an independent from Ketchikan. “That has to be in the realm of consideration because I don’t see either side being able to go it alone effectively with just one or two people from ‘the other side.’”

[From abortion to zoning: Short summaries of every bill in the 33rd Alaska State Legislature]

Principles bringing together lawmakers for such a caucus could be similar to those identified by the bipartisan caucus in the Senate, such as establishing a long-term fiscal plan and increasing the Base Student Allocation.

Some lawmakers say they hope they can announce a majority caucus before the Legislature gavels in on Jan. 17. Others say that only once the session begins — adding pressure to legislators on the fence — will enough House members finally come together.

3. Dunleavy appears willing to work across the aisle.

During Gov. Mike Dunleavy’s first term, the relationship between the Legislature and the governor’s office was often rocky and combative. There are early signs of a warmer relationship between the two branches of government as Dunleavy begins his second four-year term.

Last week, the governor came to the Senate majority coalition’s retreat to talk with the caucus for 90 minutes over lunch. Senators who attended the meeting described the conversations as productive and said that Dunleavy told them he wanted to make a fresh start.

“It was a different governor,” said Sen. David Wilson, R-Wasilla, who is a member of the majority and has served in the Legislature since 2017.

Dunleavy spoke to the caucus broadly about education funding, the Permanent Fund dividend and his tentative plans to monetize carbon sequestration in Alaska.

Wielechowski said he was “very optimistic” that there would be a better relationship between the House and the Senate, and the governor’s office. The Anchorage Democrat, who was first elected in 2006, said discussions among veteran lawmakers and Dunleavy, who is ineligible to serve a third consecutive term, have focused on what sort of Alaska they all would be leaving.

”I think the term ‘legacy’ has come up quite a bit,” Wielechowski said.

4. There are a lot of new faces in the Capitol.

This is the largest group of freshman Alaska lawmakers coming to the Capitol since 2003, according to the Legislative Reference Library. Twenty legislators — or one-third of the total Legislature — will be brand-new lawmakers.

Veteran state lawmakers are unsure how that will impact the prospects of passing big-ticket legislation, particularly in the House.

Incoming legislators met in Juneau on Thursday and Friday for two days of freshman orientation. They went on a tour of the Capitol building and held a mock committee meeting to learn the ins and outs of being a state lawmaker.

“It’s bringing so many people from these different backgrounds and different levels of experience with the Legislature onto a similar page, at least about what we’re going to be doing for the next few months,” said Fairbanks Democratic Rep.-elect Ashley Carrick, who served as a legislative aide for the past six years.

There is arcane parliamentary procedure to learn, the complicated makeup of the state’s budget, and the task of simply getting to know new colleagues. Sitka Republican Sen. Bert Stedman, who was first appointed to the Legislature in 2003, has previously described the steep learning curve for freshmen as drinking from a fire hose.

“We all have different assets, skills and perspectives to bring to the table that really round out a new batch of legislators that I don’t think we’ve seen before,” Anchorage Democratic Rep.-elect Genevieve Mina said. Mina recently worked as a legislative aide to Rep. Ivy Spohnholz, D-Anchorage, who did not run for reelection.

Mina is one of 19 newly elected members of the House, which includes nine Republicans, eight Democrats and two independents. Former Republican Reps. Dan Saddler and Craig Johnson are part of that group, returning to the Capitol after last serving in the Legislature in 2018 and 2017 respectively.

The 20-seat Senate has significantly more legislative experience and six freshmen. Three incoming senators — Matt Claman, James Kaufman and Kelly Merrick — have served in the House, and Sen.-elect Cathy Giessel previously served in the Senate for a decade until 2021.

A December orientation meeting among freshman House members was widely described as productive and congenial. It led to a novel idea floated at dinner: Why not form a majority caucus among the new crop of legislators across party lines? The website Alaska Landmine first reported on those plans. There have since been mixed accounts about how serious they were, but that helped lead to those discussions about a potential House majority based on shared principles rather than partisanship.

5. Dunleavy wants a dividend of nearly $4,000. But it’ll probably be smaller — or state services will suffer.

Gov. Mike Dunleavy unveiled a budget plan last month that included a full statutory dividend, which would amount to a payment of nearly $4,000 to every eligible Alaskan. But some legislators said adopting that dividend amount — without introducing substantial new taxes — is guaranteed to harm state services.

“I think any of us who look at our budgets realize that’s simply not possible without devastating various elements of our budget like K-12, the university, the marine highway and all of those things,” Stevens said.

Senate majority members said they had not yet arrived at a consensus for a dividend amount, and were more focused on ensuring that key state services, including education, were fully funded.

Even if legislators and the governor can agree on a dividend amount for this current year, it won’t necessarily solve the question that has become a political football in recent years: how to calculate the annual dividend amount given the state’s changing revenue picture, which is heavily dependent on volatile oil prices.

[Dunleavy’s budget proposal includes $3,900 dividend, no increases for education funding and a carbon capture idea]

Since 2016, lawmakers have not followed the state statute for calculating the dividend amount, instead using some funds from the Permanent Fund to cover what they deem essential state services. But without a change to state law, both Dunleavy and legislators from both sides of the political aisle have continued to agitate for a full statutory dividend, even at the expense of state services.

Despite multiple efforts, lawmakers have so far failed to come to an agreement on balancing the state’s revenues, funding essential services and providing a dividend amount that lawmakers can agree on.

“We have to put the state on a long-term sustainable fiscal plan that ultimately would require a solution to the PFD questions that’s out there,” said Ortiz. “A permanent solution to that would be a major accomplishment.”

The state’s fiscal situation is vastly different from the one lawmakers faced before the beginning of the last legislative session in 2022, when Alaska saw a windfall in revenue due to rising oil prices attributed to a variety of geopolitical factors, including the war in Ukraine.

Now, oil prices are steadily declining, with recent prices for North Slope crude coming in at less than $80 per barrel, down from a high of over $120 per barrel in June. Declining revenue could put added pressure on lawmakers with high-price-tag priorities like increasing education funding and introducing a new pension plan for state employees — especially since legislators appear at odds on whether to introduce new revenue measures.

Dunleavy has proposed carbon monetization as a method to bring in more money to the state without adding taxes. In a recent press conference, the governor predicted the state could begin to see revenue from carbon sequestration programs within as little as a few months, but lawmakers have been more skeptical.

“To me, those carbon credits are almost like a cryptocurrency. It’s not really real,” Giessel said last month on the ADN Politics podcast.

Even with no specifics or new ideas, lawmakers agree that coming up with a fiscal plan will be an essential part of the legislative session.

“Having a plan going forward, something stable and predictable on the dividend, is going to be a key element — a basic foundational element,” Giessel said this week.