By Ben Carpenter
House Bill 78 is sitting on the governor’s desk. At the same time, pipeline legislation is being held up by many of the same lawmakers pushing the pension bill. That overlap matters because it ties together two decisions that affect every household in Alaska.
One drives costs up. The other has the potential to bring them down.
Here is the pipedream reality: If a pipeline bill does not move forward, natural gas is going to cost more— whether a pipeline gets built, or not. If a pipeline bill does move forward, there is a path for the cost of natural gas to be less expensive.
There is only one way Alaskans get lower-cost natural gas and that is with a project-friendly pipeline bill.
Here is the pension reality: HB 78 creates a defined benefit pension system that guarantees payouts and adjusts when assumptions fall short. When investment returns miss, when inflation runs higher than expected, or when costs grow faster than projected, the system responds the same way every time. Employer contribution rates go up.
That is not a one-time fix. It is a perennial problem.
At the state level, lawmakers can delay dealing with those increases, but they cannot avoid them. At the local level, there is no delay at all. Local governments must absorb those higher costs immediately. That means tighter budgets, fewer services, or higher local taxes.
So, step back and look at what’s happening.
On one side, you have a policy that lowers a major cost for families and businesses. On the other, you have a system that increases payroll-related costs across government, year after year, as assumptions inevitably miss.
And right now, those two policies are moving together.
The concern is not just that both are being debated at the same time. It is that one appears to be held in place while the other waits for a decision. That creates leverage, whether anyone calls it that or not.
It raises a basic question. Is Governor Dunleavy being asked to accept a long-term cost escalator in exchange for movement on a policy that promises to lower energy costs?
Because that is what this looks like from the outside.
The pension system does not just affect government balance sheets. It flows outward. Higher employer contributions mean higher costs for school districts. That means higher local property taxes. It means tradeoffs in classrooms. It means less flexibility with already tight budgets.
At the state level, the pressure lands on the Permanent Fund earnings. Pension obligations do not go away. When costs rise, they compete with everything else funded from that same pool, including the Permanent Fund Dividend (PFD).
So, it is average Alaskan families that see higher costs locally. And smaller PFD’s.
Put it all together and the direction becomes clear. Higher payroll costs in government. Higher local taxes or reduced services. Less room in the budget for dividends. And all of it happening while a policy that could lower one of the biggest household expenses, energy, is tied up in the same moment.
That is not good governance.
These decisions should stand on their own. If a pipeline lowers costs, it should move forward because it makes sense. If a pension system increases long-term obligations, it should be judged on whether those costs are sustainable.
Mixing the two creates a situation where Alaskans are effectively asked to trade one for the other.
Lower-cost energy on one hand. Higher-cost government on the other.
That looks like the trade being made for you, courtesy of a handful of faux Republican legislators at odds with Alaskans who are not government employees.
Ben Carpenter is a former Alaska state legislator, combat veteran, small business owner, and a former host of the Must Read Alaska Show.
