In 2025, Alaska received $145 million from the federal government to invest in aviation safety. $25 million came from the FAA Reauthorization Act of 2024 which promises $25 million yearly for the Alaska Aviation Safety initiative until 2028. The remaining $120 million came from the Working Families Tax Cuts Act.
The investments will serve to accomplish several aviation safety goals:
Reduce fatal aviation accidents in Alaska by 90% by 2033
Improve maintenance and reliability of weather equipment
Provide $80 million for weather infrastructure
Provide at least 50 Automated Weather Observing Systems, 60 Visual Weather Observing Systems, and 64 new weather camera sites
Continue the Alaska Aviation Safety initiative
Senator Sullivan stated: “Working closely with FAA leadership, I pushed for a fundamentally different approach: one that recognizes Alaska cannot be treated like the Lower 48.” Alaska’s total aviation accident rate and fatal accident rate are both higher than the national averages, pointing to the need for Alaska-specific solutions.
“Aviation is the backbone of our state—supporting our economy, our health care system, and our ability to remain connected across our vast landscape. I remain committed to ensuring we have the investment, infrastructure, and flexibility needed to keep our skies safe,” promises Sullivan.
The historic National Petroleum Reserve-Alaska (NPR-A) oil and gas lease sale on March 18 this year is just the beginning of promised investment, job growth, and revenue increases for Alaska.
According to Congressman Nick Begich, major producers like ConocoPhillips, Exxon, and Shell are “stepping up because they see Alaska’s immense potential.” Driving new investments is Congress’s mandate of five NPR-A lease sales over the next decade. Begich emphasizes that this “means certainty” and certainty means better stability.
Another win for Alaska is the change of the revenue split from 50/50 for the federal and state governments to 70% for Alaska and 30% for the federal government. More revenue means more potential investment in Alaska’s schools, infrastructure, public safety, and long-term fiscal stability.
Senate Bill 277 has drawn widespread attention from Alaskans, generating debate that appears largely split along political lines with conservatives opposing the bill and liberals supporting it. However, according to leaders in the Alaska Senate Majority, the bill has been specifically designed to draw support from both sides of the aisle in order to prevent a governor’s veto. SB 277 contains several amendments and additions to existing education law. Determining what is good and what is bad in the bill requires critical examination.
Sections 1: Districts can charge charter schools up to 8% (changed from 4%) for administrative costs
Section 1 of SB 277 enables districts to retain “administrative costs” from charter school budgets. These costs can be determined either by the indirect cost rate cap or “the specified administrative costs, whichever is less.” The bill doubles the indirect cost rate cap from 4% to 8%. However, existing law requires districts to provide charter schools with “a report itemizing the administrative costs retained by the local school board under this section.” This ensures districts cannot automatically charge 8% without an itemized bill. If administrative costs are less than 8%, the district can only retain that amount.
Section 4 applies the same to correspondence schools.
Although proponents of the bill say that this provision will help districts continue to provide necessary administrative services, opponents argue that it unduly burdens charter and correspondence schools.
According to an email from Galena City Superintendent Jason Johnson to IDEA families: SB 277 will cause “most Alaskan statewide correspondence programs [to] sink and Alaskan families will suffer the loss of Alaska’s current robust school choice options.”
Section 2: Homeschoolers can keep materials
Section 2 of SB 277 allows students who were enrolled in a correspondence study program to keep “textbooks, equipment, and other curriculum materials provided to the student through the program, including materials purchased through an annual student allotment,” if and when the student ceases to be enrolled in the program.
Section 3: Increased funding for student transportation
SB 277 also addresses student transportation, allocating minor increases to the “per student amount” of state-provided funding for “operating the student transportation system.” The per student amount is calculated based on the district’s ADM (average daily membership).
Increases are as follows:
School District
New Per Student Amount ($)
Difference ($)
Alaska Gateway
2,694
165
Aleutians East
402
25
Anchorage
564
35
Annette Island
236
15
Bering Strait
63
4
Bristol Bay
3,459
212
Chatham
364
23
Copper River
2,054
126
Cordova
435
27
Craig
548
34
Delta/Greely
2,144
131
Denali
2,340
143
Dillingham
1,577
97
Fairbanks
1,057
65
Galena
330
21
Haines
811
50
Hoonah
387
24
Iditarod
274
17
Juneau
781
48
Kake
352
22
Kashunamiut
7
1
Kenai Peninsula
1,185
73
Ketchikan
941
108
Klawock
757
47
Kodiak Island
1,035
64
Kuspuk
846
52
Lake and Peninsula
497
31
Lower Kuskokwim
359
22
Lower Yukon
2
1
Matanuska-Susitna
1,178
72
Nenana
761
47
Nome
805
50
North Slope
1,450
89
Northwest Arctic
32
2
Pelican
94
6
Petersburg
485
30
Saint Mary’s
250
16
Sitka
554
34
Skagway
47
3
Southeast Island
1,496
92
Southwest Region
774
48
Unalaska
840
52
Valdez
953
59
Wrangell
907
56
Yakutat
963
59
Yukon Flats
342
21
Yukon/Koyukuk
388
24
Yupiit
3
1
Section 4: Correspondence schools charged up to 8% for administrative fees
As previously stated, Section 4 echoes Section 1, applying the 8% indirect cost rate cap for administrative fees to correspondence schools. The bill clarifies that the cost rate cap is only for the administrative services fee and not for “educational services.” There is no cap for fees related to educational services, defined as “boarding and tuition arrangements, pupil or teacher exchanges, special education services, or curriculum development.”
Galena City Superintendent Johnson pointed out in his email to IDEA families that the absence of a cap for educational services leaves correspondence schools unprotected by districts who wish to charge correspondence programs up to 100% of State funding.
Section 5: Increased funding for correspondence programs [with caveat]
Section 5 of SB 277 seems to provide for greater funding for correspondence schools. Instead of funding being calculated as 90% of the ADM of a correspondence school, it will be calculated using the ADM. Taken on its own, this provision would benefit Alaskan homeschoolers. According to Senator Rob Yundt (R-Wasilla), this increased funding has long been sought after and constitutes part of his reason for supporting the bill.
However, taken in context of the whole bill, specifically in the context of Section 7 (see below), this provision is as hollow as a drum.
Section 6: Increased Base Student Allocation
Section 6 increases the Base Student Allocation (BSA) from $6,660 to $6,786.54. This increase plus the increased transportation funding provided in Section 3 and grant funding for the Alaska Reads Act provided in Section 17 adds about $100 million to the State’s $1.3 billion education budget.
Section 7: Students in correspondence schools count toward local district’s ADM
Section 7 has sparked most of the debate regarding SB 277. This section mandates that students enrolled in a correspondence program offered by a district other than the district the students reside in are to be counted in their local district’s ADM, not their school’s ADM. These students will be counted toward the ADM of the school with the lowest ADM in the district where they reside.
This new subsection of AS 14.17.500 could crush correspondence schools by removing funding and diverting that funding to local districts instead. In this case, funding would not follow the student but would be locked into the district where the student lives. For correspondence schools with student bodies largely made of students from outside the program district, this means almost certain bankruptcy.
Conservatives who oppose the bill zero in on Section 7, claiming that the bill undermines parental rights and school choice.
Barbara Haney, founder of Alaskans Against Common Core, stated in an article by Alaska Watchman: “This is not education reform – it’s an attack on parental rights and another step toward the centralized control we have fought for over a decade.”
Sections 8-16: Updating language from “regional” to “institutional” and adding “regional resource center”
Sections 8-16 of SB 277 updates the bill’s language to allow teachers with accreditation from an institutional [used to be “regional”] or national accrediting association to be eligible for a teaching certificate. Plus, it adds the phrase “or regional resource center” to a variety of places in Alaska statute related to teacher reemployment after retirement.
Section 17: Guaranteeing the Alaska Reads Act
Section 17 removes the phrase “subject to appropriation” from the Alaska Reads Act, which provides a reading proficiency incentive grant of “not less than $450 for each student in kindergarten through grade six who, at the end of the school year, performs at grade-level reading proficiency…”
The removal of the phrase “subject to appropriation” guarantees the incentive grant will automatically renew each year, rather than needing to be approved by legislative action each year.
This section, which strives to incentivize better learning outcomes in Alaska public education, draws bipartisan support.
Section 18: Studying education funding options
Section 18 directs the Legislative Budget and Audit Committee to conduct a study to “evaluate the current education funding provisions and either recommend changes to the current funding provisions or recommend alternative methods of education funding.” The study must be completed by January 1, 2027.
So, Is SB 277 Good or Bad for Alaskan Families?
After a close look at the provisions in SB 277, it is clear that Democrats are attempting to cushion a fatal blow to many correspondence schools with minimal provisions that would be good if we could ignore Section 7. Section 5’s allowing of students to keep materials from correspondence schools means little if a student’s correspondence school closes due to lack of funding. With alternatives closing down, his parents would be forced to enroll him in his local public school. After all, he would have already been counted in his local district’s ADM.
Rather than real attendance increasing student count numbers which then increase funding, the bill would ensure district’s student counts increase, which would then cause an increase in student enrollment.
Increased funding for transportation, increased BSA, and guaranteed Alaska Reads Act incentive grants could all be wonderful for Alaskans, but are they worth the cost of Section 7’s strange new counting rule?
Alaska should not fund public schools based on a student’s residency but based on the number of students actually attending the schools. Why are fewer and fewer students enrolling in Alaska public schools? Because our public education system is not producing the results parents want. SB 277 flips the structure on its head, ignores parents’ concerns, and rewards schools that lack results.
The Senate Finance Committee received a detailed briefing from the Department of Revenue’s Treasury Division on cash flow operations, investment strategies, and fund performance across state reserves and retirement systems. Presenters Pam Leary, Treasury Director, and Zach Hanna, Chief Investment Officer, outlined how the division’s 40 professionals manage nearly $60 billion in assets through four specialized sections—portfolio management, accounting, compliance, and cash operations—while maintaining liquidity to pay state bills without disruption.
Ms. Leary described cash management as one of the state’s most critical central functions, processing thousands of daily transactions from taxes, federal reimbursements, and reserves. The team coordinates closely with the Alaska Permanent Fund Corporation to schedule Earnings Reserve draws, ensuring the general fund balance stays above the $400 million threshold for five consecutive days before borrowing from reserves. “We have been averaging at a higher balance,” she noted, crediting improved timing coordination that has kept operations smooth over recent years. Sen. Jesse Kiehl (D-Juneau) questioned whether this threshold remains adequate given budget growth, but Leary confirmed it is currently sufficient. Sen. Lyman Hoffman (D-Bethel) highlighted Alaska’s unique revenue volatility, suggesting larger buffers may still be prudent compared to peer states.
Investment performance drew positive attention. Hanna explained the formal State Investment Review process, where recommendations are vetted for legal compliance and best practices. Despite recent market cycles—from near-zero rates to inflation and rate hikes—the Treasury delivered strong results. Overall returns across managed funds reached 12.9% for 2025, generating $6.7 billion in total gains. State funds alone added $658 million to the balance sheet. Retirement systems ranked in the top third of peers, producing $2 billion in excess returns over the past decade and reducing state contributions.
The Constitutional Budget Reserve Fund (CBRF), the state’s primary reserve, remained fully invested in cash equivalents to prioritize liquidity and principal protection. Its $2.9 billion balance produced a 4.48% return, 20 basis points above benchmark, adding $127 million in gains. Hanna noted the conservative stance reflects an uncertain time horizon, though elevated cash yields provided solid returns. Sen. Bert Stedman (R-Sitka) flagged the Digital Bridge matter for future review post-audit, but the committee acknowledged funds had been returned to the main CBR account.
GeFONSI pooled accounts, holding $3.4 billion as of June 2025, showed solid performance. GeFONSI-1 returned 4.71% and GeFONSI-2 5.93%, each 30 basis points over benchmark, generating $172 million combined. The Public School Trust Fund reached peak assets of $911 million after a 17.07% return, adding roughly $141 million in gains and compounding at 8.6% over ten years. It contributed $35 million to K-12 funding in FY2025, with similar amounts projected forward. Hanna reiterated the fund’s high-risk profile to support up to 5% spending while aiming for inflation-proofing.
The Alaska Higher Education Investment Fund faced scrutiny after a $130 million transfer reduced its balance. Pre-transfer spending exceeded $30 million annually at earning capacity; post-reduction sustainability concerns prompted discussion of potential recapitalization. Hanna stressed the fund’s 7% statutory draw lacks smoothing or inflation-proofing, unlike the Public School Trust.
Defined benefit plans (PERS/TRS) earned 10.11% in FY2025, with long-term returns of 8.51% over 40 years exceeding the 8.17% actuarial assumption. Ten-year performance stood at 9%, 23 basis points above benchmark. Participant-directed plans, now $12 billion, benefited from low-cost target date funds (12 basis points average fee, bottom decile versus peers). 90% of new contributions flow to these defaults, with over 60% of assets in target date or balanced funds. Hanna highlighted 15-year weighted returns around 10.3% for defined contribution systems.
Sen. Stedman praised the Supplemental Benefit System (SBS) as a “best kept state secret,” noting typical 25-year participant balances of $800,000–$1 million. Hanna committed to providing weighted average SBS returns, confirming the program’s strong long-term impact. Resilience discussions addressed market cycles, with defined benefit plans emphasizing diversification to handle 5% net outflows (rising in downturns) while defined contribution plans leverage long horizons and sticky defaults.
Sen. Hoffman closed by noting the Power Cost Equalization program is thriving at the Permanent Fund Corporation. The committee’s next meeting is scheduled for March 24 at 9:00 a.m.
The conference committee for HB 289, the FY26 supplemental appropriations bill, wrapped up its work with an emphasis on fiscal discipline and targeted use of the Constitutional Budget Reserve (CBR). Lawmakers adopted House positions across nearly all departments, refined controversial CBR draw language to limit headroom to $20 million, and reported the conference committee substitute out with individual recommendations.
Chair Rep. Andy Josephson (D-Anchorage) convened the meeting noting limited powers of free conference granted by both chambers. The committee processed items department by department using March 23 motion sheets, setting aside objected items for later review.
Non-controversial adoptions moved swiftly. The Department of Administration saw Item 1 (House) adopted without objection. Commerce, Community and Economic Development followed with Items 1–2 (House) passing unanimously. Corrections cleared Items 1–3 (House), while Education and Early Development adopted Items 1–5 (House). Fish and Game passed Items 1–5 (House), Natural Resources cleared Items 1–3 (House), and Revenue adopted Items 1–5 (House). Transportation and Public Facilities, University of Alaska, and Judiciary also aligned with House positions on their respective items. Debt service, special appropriations, and capital budget items followed suit, with House versions prevailing across the board. Fund capitalization adopted a mixed approach: Items 1–2 (House) and Item 3 (Senate).
The session’s focal point emerged during fund transfers, particularly Item 1 involving CBR draw language. Sen. Lyman Hoffman (D-Bethel) moved adoption of the Senate version modified by Amendment H.A.4. Chair Josephson objected for explanation. Alexei Painter, Director of Legislative Finance Division, detailed the amendment’s refinements: Section A simplified the draw calculation to compare unrestricted revenue against enacted general fund appropriations (prior-year bills plus the current bill), appropriating any shortfall from the CBR. This deterministic approach prevents unintended expansions from subsequent appropriations. Section B addressed “headroom,” limiting transfers to only the amount necessary for additional general fund needs—eliminating excess beyond demonstrated requirements.
Josephson then offered a conceptual amendment to H.A.4, reducing headroom from $30 million to $20 million on line 19. Painter supported the calibration with data from the Legislative Finance document on governor’s supplemental items not in either version. Known needs totaled $12,584,400 general fund, netting $11.6 million after excluding one intentionally omitted item. Adding a potential $4.6 million FY24 SNAP penalty (under appeal and possibly mitigable) brought foreseeable requirements to roughly $16.2 million. Typical April items—election fund capitalization ($100,000–$200,000) and judgments/claims/settlements ($300,000–$400,000)—plus occasional emergents further informed the tighter $20 million figure. The conceptual amendment passed without objection.
Rep. Will Stapp (R-Fairbanks) objected to the amended language, preferring the original House version with no CBR draw provision at all. “I don’t believe this bill requires a CBR draw to be funded,” he stated, arguing against any contingency language. Hoffman defended the approach: “We’ve adopted language that says the constitutional budget reserve account will only be used if necessary… This is the most prudent way forward.” After a brief at-ease and roll call, H.A.4 as amended carried (House: two ayes, one nay; Senate: three ayes). The remaining fund transfer Item 2 (House) passed unanimously.
The committee then authorized technical and conforming adjustments by Legislative Finance and Legal Services before moving the conference committee substitute out with individual recommendations. Stapp maintained his objection for the record, but the motion prevailed. The report advances to both floors.
Departments largely followed the more restrained House positions, limiting supplemental growth. Unresolved elements, such as the precise impact of the FY24 SNAP penalty and potential April amendments, will be monitored closely. If unrestricted revenue exceeds expectations, the draw may prove unnecessary entirely, validating the conditional language.
Emperor Caracalla issued the Constitutio Antoniniana in the year 212 AD. To the modern mind, marinated in egalitarian sentiment, this decree reads like a triumph of social justice.
By the stroke of an imperial stylus, every free man within the borders of the Roman Empire received full citizenship. The ultimate inclusion initiative.
It was also a scam.
Caracalla was no philanthropist. He was a fratricide who had murdered his brother Geta in their mother’s arms and then slaughtered twenty thousand of Geta’s supporters in the streets of Rome. He drained the treasury to gorge his legions and finance his Persian fantasies. Rome levied lucrative taxes exclusively on its citizens. The emperor did not expand the franchise to elevate the masses. He expanded it to bleed them.
The revenue came. So did the rot.
For centuries, Roman citizenship had been a covenant forged in civic duty, blood, and military service. It demanded assimilation and commanded awe. The Apostle Paul wielded his citizenship like a blade, halting the centurion’s whips by asking, “Is it lawful for you to flog a man who is a Roman citizen and uncondemned?”
When Caracalla bestowed this status on every breathing subject of the empire, he annihilated the value of being a citizen. By making everyone a Roman, he ensured no one was. The title shed its prestige, its cultural gravity, and its power to bind. It devolved from covenant to clerical entry. The empire staggered on for generations, but its civic core had been hollowed out. What remained was territory without a people, an administrative zone waiting for the barbarians to finish what the emperor had started.
We are living through our own Edict of Caracalla. The campaigns for open borders and mass amnesty do not argue that the illegal entrant has earned the rights of the citizen. They argue that the distinction itself is immoral. Non-citizen voting proposals do not strengthen the franchise; they dissolve the meaning of it by detaching it from allegiance.
The logic is Caracalla’s logic, updated for a therapeutic age: expand the category until it contains everything… and therefore means nothing. And like Caracalla, the architects of this dissolution are not humanitarians. They are accountants of power. The progressive state desires a pliable electorate unmoored from constitutional memory. The corporate oligarch desires a labor pool vast enough to suppress the wages of the American worker. Both cloak themselves in the language of compassion.
They want the border erased, not because borders are unjust, but because a defined citizenry is harder to govern and harder to exploit than an undifferentiated mass of consumers and taxpayers.
When citizenship is reduced from a bond of constitutional loyalty and shared historical memory to an administrative status stamped at a processing center, the nation does not become more inclusive. It ceases to be a nation. It becomes an economic zone. The passport cheapens. The glue dissolves. Yet we are instructed to call this progress.
As the temporal order decays, we must keep our bearings. We are not the first generation to watch an empire devour its own foundations.
When the Western Empire buckled under the weight of its accumulated rot and the Goths poured through gates that no longer meant anything, St. Augustine of Hippo delivered the Church’s verdict. History, he wrote, is the tale of two cities formed by two loves. The Earthly City is built on the love of self, the libido dominandi, the lust for domination. It is the city of the technocrat and the open-borders oligarch. Because it is built on the sand of human pride, it will inevitably dilute its own foundations and collapse into ruin.
The Heavenly City is built on the love of God, usque ad contemptum sui, to the contempt of self. It is eternal, and it is ruled by the King of Kings. Washington, like Rome, is not eternal.
We are placed in this moment by divine providence. We must stand against the tide, demand justice, defend our borders, and resist those who would dissolve the moral order for profit and votes.
Private education options and state-supported choice tools belong in the same conversation as the three structural chokepoints because they do not sit outside the system. They press directly against its pressure valves. In this series, those chokepoints are not abstract theories: first, three-year school board terms that dampen broad-cycle voter turnout and continuity; second, the reality that school districts and REAAs cannot opt out of PERA; and third, an APOC environment that can discourage or exhaust grassroots energy before it ever reaches governing scale. Together they shape what school choice can become in Alaska, not just what it is today.
Alaska’s choice ecosystem has deep roots that predate statehood. Correspondence education dates to at least 1939, born out of distance, geography, and the realities of rural living. Over time, laws expanded these options, including major changes in the early 2000s that allowed broader statewide correspondence access. Today, correspondence students are funded at a reduced share of the BSA, with districts able to provide family-directed allotments under program rules. That framework is not a marginal side story. It remains one of Alaska’s most practical forms of school choice precisely because it reduces the friction of centralized systems while still operating within public funding architecture.
That history is also why the legal turbulence over homeschool allotments matters to the chokepoint discussion. When choice becomes central to how thousands of families educate their kids, the state’s governance architecture must adapt or the system will be buffeted by litigation and policy uncertainty. But the deeper pressure points are structural. A three-year school board cycle can weaken the democratic muscle needed to protect or expand choice at the local level. It narrows the window for coalition-building and makes it harder to synchronize school governance debates with high-turnout election moments when families are most engaged and reform-minded.
The second chokepoint, PERA’s non-optional reach over school districts and REAAs, also shapes the real-world ceiling for choice. Even if families gain more pathways through correspondence or charter growth, the cost and rigidity of statewide labor structures can limit how fast new models scale, how flexibly they staff, and how easily they experiment with differentiated compensation or alternative workforce designs. In effect, the governance promise of school choice can be constrained by a labor framework that the local system cannot restructure, even when local conditions clearly call for new approaches.
Charter schools provide a second historical pillar supporting a broader definition of school choice. Alaska’s Charter School Act dates to 1995, and statutory limits that once capped the number of charters were lifted. By 2010, the state moved to no limit. This reform history reinforces that Alaska periodically recognizes the need for bottom-up innovation, even as the broad public system remains shaped by top-down constraints in governance terms and labor rules.
Tax-credit mechanisms form a third lane. Alaska’s current state Education Tax Credit is best understood as a donation incentive supporting public and approved educational programs rather than a clean K–12 private scholarship-voucher model. The program was established in 1987 and expanded in 2014 and 2018 to broaden eligible contributions and recipients. Private capital can help relieve pressure on public resources, but it cannot substitute for structural reform if election-cycle design, PERA rigidity, and grassroots friction continue to narrow the practical lane of local innovation.
That brings us to the third chokepoint: APOC’s chilling effect on grassroots endurance. The more complex or risk-heavy the compliance environment feels, the fewer ordinary parents and community leaders are willing to form durable reform organizations. School choice does not advance only through policy; it advances through sustained citizen governance: candidates, coalitions, donor networks, and volunteer infrastructure. If that civic machinery is discouraged or burned out early, even the best policy ideas struggle to survive the long runway required for real change.
“School choice” includes homeschool allotments, private-school pathways, charter expansion, and tax-credit tools. These options are not separate from the chokepoints. They are the clearest evidence of where the system is tightest, and where reform could yield the fastest relief for families while restoring the constitutional promise of local self-government in education.
The House Resources Committee convened a dual-purpose session emphasizing Alaska’s economic foundations and future energy security. Lawmakers first advanced HJR 44, affirming support for Alaska Native Corporations’ participation in the SBA 8(a) program, before receiving a detailed update on the Alaska LNG project from developer Glenfarne.
Co-Chair Rep. Robyn Frier (D-Utiqgvik) called the meeting to order and shifted its agenda to prioritize HJR 44, a resolution from the Resources Committee itself. Sarah Snowberger, Chief of Staff to Co-Chair Rep. Maxine Dibert (D-Fairbanks), presented the measure. “HJR 44 affirms Alaska’s support for the ability of Alaska Native corporations and tribal entities to continue participating in the U.S. Small Business Administration 8(a) business development program,” she stated. Snowberger described the 8(a) program as a “cornerstone of economic self-sufficiency, community development and workforce growth,” particularly in rural areas. She noted that since ANCSA in 1971, ANCs have reinvested revenues into dividends, scholarships, healthcare, and infrastructure, supporting thousands of jobs and reversing historical economic outflows.
Nicole Borromeo, President of the ANCSA Regional Association, provided compelling testimony. In 2022 alone, regional ANCs generated $13.5 billion in total revenue, with $4.5 billion from Alaska operations, supporting nearly 25,000 jobs and over $6 billion in statewide economic activity—roughly 6% of state employment. “ANC success is built on performance,” Borromeo emphasized. She addressed national scrutiny, attributing concerns to misunderstandings rather than Alaska-specific issues. “The genesis of the concern is misguided and based on the misunderstanding that somehow Alaska Native corporations or tribal or government fall into diversity, equity and inclusion,” she clarified. Borromeo highlighted that entity-owned firms operate under statutory presumptions of economic disadvantage established by Congress, delivering value through competitive federal contracting while complying with strict oversight. Past issues identified in GAO reports were limited and addressed through SBA reforms, making the program a “model of effectiveness and efficiency.”
Committee members raised thoughtful questions reflecting caution. Rep. Mike Prax (R-North Pole) requested substantiating GAO reports and Missouri-related documentation for the record. Rep. Dan Saddler (R-Eagle River) sought data on the total value of 8(a) contracts awarded to ANCs since the late 1970s, noting the need for evidence to support the resolution’s claims. Snowberger committed to compiling available figures and providing requested materials. Despite procedural concerns about the bill’s rapid movement and the need for full documentation, the committee advanced HJR 44 with attached fiscal notes and individual recommendations after objections were withdrawn. The resolution urges Congress and the SBA to preserve Alaska Native participation, recognizing the program’s proven role in rural economic development without expanding federal mandates.
The session then shifted to an Alaska LNG project update. Adam Prestidge, President of Glenfarne Alaska LNG, and Mark Begich of Northern Compass Group joined Matt Kissinger of AGDC at the testifier table. Prestidge described the project as “one of the most important infrastructure projects in the entire world right now,” highlighting Glenfarne’s 75% joint venture stake secured nearly a year earlier. He stressed energy security for Railbelt communities facing Cook Inlet decline, job creation exceeding 7,000 during construction, and billions in economic activity. “Unless this pipeline gets built, Southcentral Alaska will face a challenge of energy security for a long time to come,” Prestidge warned.
Begich framed the moment as pivotal, noting confidence had risen dramatically due to aligned factors. “If you would have asked me a couple years ago where this project would be, I’d say it’s maybe a 10-20% opportunity,” he stated. “Today based on all the information… This is probably in my view an 80% plus project.” Kissinger detailed progress on milestones: Class 2 FEED completion ahead of schedule, binding offtake agreements for 13 million tons per annum (MTPA), and phased development separating the pipeline from the LNG export facility. He confirmed pipeline mechanical completion targeted for end-2028 with operations by mid-2029, and LNG exports by early-to-mid 2031.
Members pressed on practical details. Rep. Donna Mears (D-Anchorage) questioned duplicative short-term LNG import projects and their potential billion-dollar burden on ratepayers. Prestidge acknowledged coexistence was possible but emphasized private negotiations and RCA oversight to avoid excess infrastructure. Rep. Zack Fields (D-Anchorage) sought clarity on in-state pricing and timelines, with Prestidge outlining volume-based step-downs that would lower costs as throughput increases. Rep. Saddler addressed public skepticism, asking what differentiates this effort. Begich and Kissinger cited resolved litigation, secured right-of-way, AOGCC regulatory changes enabling offtake, and private-sector risk assumption as key distinctions.
The committee raised tax structure concerns ahead of HB 381 hearings. Kissinger referenced benchmarking showing Alaska’s property tax burden potentially ten times higher than competing jurisdictions—$500 million annually versus $50 million elsewhere. He supported exploring volumetric alternatives to enhance competitiveness without compromising state revenue. Prestidge reaffirmed commitments to 500 million cubic feet per day for domestic use and ongoing coordination with utilities and the Railbelt.
Co-Chair Frier closed by noting ongoing oversight and scheduled future briefings.
The Senate Resources Committee continued its detailed review of SB 275, which proposes a 15-cent-per-MMBtu processing surcharge on LNG export volumes alongside adjustments to natural gas project taxation. Over two sessions, consultants from Gaffney Cline provided illustrative modeling on project economics, tax comparisons, and the surcharge’s potential impacts, while members repeatedly highlighted the absence of firm financial data. The committee ultimately set the bill aside.
Chair Sen. Cathy Giessel (R-Anchorage) opened by referencing recent industry analysis from RBN Energy that omitted Alaska’s LNG project entirely from discussions of North American export prospects. Sen. Forrest Dunbar (D-Anchorage) noted the article’s emphasis on binding commercial offtake agreements and feed gas supply at 1.2 to 1.4 times nameplate capacity—elements Alaska currently lacks. He observed, “Alaska isn’t mentioned at all,” prompting reflection on the project’s competitive positioning. Giessel acknowledged public feedback, stating that “99% of those emails that I’ve been receiving have been thank yous for taking the time to dig into this project and into maximizing the benefit to Alaskans.” She tied the discussion to the book How Big Things Get Done, advocating “make haste slowly” and rigorous “what if” scenario planning to avoid the “iron law” of mega-projects: over budget, over time, under benefits.
Gaffney Cline Senior Director Nick Fulford resumed the presentation, framing the surcharge within two scenarios. In a positive-rent case, sufficient economic headroom exists to absorb the levy while satisfying upstream producers and midstream returns. In a marginal case, even after CAPEX optimization and federal support, the surcharge risks “slowing down the process to FID or even suspending the dialogue.” Fulford illustrated the surcharge’s scale: approximately $150–$160 million annually—comparable to projected state corporate income tax from the pipeline itself. He equated it to roughly two mills in property tax or 1.5 percent of a hypothetical $10 delivered sales charge and about 25% of potential 45Q carbon-capture credit value. On an illustrative 10% post-tax IRR baseline, the surcharge reduces returns by roughly one-third of a percent to 9.6%.
Comparisons to LNG Canada in British Columbia underscored competitiveness concerns. Canada’s combined federal-provincial rate of 27% is reduced by a 3% natural gas credit to an effective 2%, with minimal property taxes. Alaska’s baseline (excluding property tax) sits at 28.4%; adding the surcharge pushes the effective rate to 29.5–30.5%. Fulford confirmed the levy applies solely to the Nikiski LNG plant, not the North Slope CO2 removal facility. Sen. Dunbar noted Canada’s lack of any per-unit surcharge and broader systemic advantages, while Fulford highlighted Station 2 hub forward prices (roughly $2, potentially rising to $3) as a factor that could narrow Alaska’s gap if Henry Hub strengthens.
Economic incidence drew sharp focus. Sen. Robb Myers (R-North Pole) asked who ultimately bears the “wedge effect”: lower North Slope gas prices (affecting royalties), reduced project margins, or higher Asian buyer prices. Fulford deemed pass-through to buyers unlikely in a competitive market and suggested upstream negotiation possible but limited, concluding the surcharge would primarily depress midstream and pipeline economics. Net fiscal impact: $150–$160 million gained, offset by roughly $15–$16 million in lost corporate income tax—a 10:1 ratio consistent with the 9.4% federal rate.
Lease operating expense (LOE) treatment emerged as particularly complex. Fulford illustrated that allowing $1 billion in gas-conversion CAPEX (e.g., Point Thomson) against a hypothetical 13% gross gas tax could reduce the gas sale price by 3–5 cents per MMBtu. Sen. Dunbar warned such deductions remove cost-control incentives and invite audits and disputes. Giessel requested further modeling on integrating LOE into Alaska’s existing net oil tax framework.
Discussion of the gas processing plant highlighted CO2 removal for liquefaction specs, potential enhanced oil recovery sales, and 45Q credits valued at $85 per ton for 12 years (monetized at 80–90 cents on the dollar via tax partnerships). Fulford noted construction must begin by January 1, 2033 for eligibility and suggested a separate CO2 entity to optimize credits, with LNG or upstream participants possibly holding equity.
Sen. Bill Wielechowski (D-Anchorage) invoked the constitutional duty to maximize resource value, asking what information the committee needs. Fulford affirmed modeling feasibility but stressed key unknowns—CAPEX, capital structure, federal support—limit reliability without data sharing. The committee acknowledged that fiscal certainty is typically a FID prerequisite, citing LNG Canada’s multi-year negotiations that shifted from proposed taxes to credits.
In closing, Chair Giessel stressed the long-term nature of LNG contracts and the state’s fiduciary obligation. “It’s important for the people of Alaska who are listening to understand that we have no financial information. We’re working blind here,” she stated. “We’re going to take time to do it right.” No action was taken on SB 275; the bill was set aside pending additional data and modeling from Gaffney Cline and Pegasus.
While the surcharge aims to capture economic rent, members recognized risks of depressing margins or delaying FID in a marginal project environment. Further modeling on LOE, incidence, and comparisons will inform whether adjustments preserve competitiveness against jurisdictions offering credits rather than surcharges.
The next meeting on March 23, 2026, will address appointment confirmations.
