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The Senate passed the bill early Saturday, sending it to the desk of President Joe Biden.
Gov. Mike Dunleavy said he would issue an executive order creating the department in January.
The change comes after Alaska Education Commissioner Deena Bishop told school districts to reconsider the practice.
The bill would eliminate provisions that reduce Social Security benefits for people who have worked in Alaska’s public sector.
The budget draft issued by Gov. Mike Dunleavy includes a preliminary funding plan for maintaining or improving the state’s infrastructure.
Gov. Mike Dunleavy’s proposal did not account for an education funding increase, though he said he would consider a $200 million boost.
The recommendations come a year after the commission approved a 67% raise for lawmakers and 20% raise for the governor and his cabinet.
The Alaska House GOP announced the formation of a minority caucus that is expected to serve as a counterweight to the bipartisan majority.
Commissioner Deena Bishop said districts should instead add in-person instructional hours to make up for snow days.
Peltola said she will “always work for Alaska and Alaska’s interests.”
The minority is expected to oppose policy priorities sought by Senate majority leaders, including public pension reform.
A close look at the 340,510 ballots counted reveals new information on the way Alaskans cast their ballots.
State Rep. David Eastman is suing Gov. Mike Dunleavy over the adoption of a bill related to multiple subject areas.
Twenty-one out of 40 state House seats are set to filled by women.
Anchorage Democratic Rep. Cliff Groh is trailing by 23 votes to Republican challenger David Nelson after the latest ballot count.