Legislature cuts school debt assistance to Mat-Su, new state trooper post in Talkeetna

Absent some last-minute hiccup, Alaska legislators will adjourn their 2025 session Wednesday night and head home, although with the state budget wrapped up they may “gavel out” earlier.

With oil revenues down and costs for state operations rising money is very tight. The operating and capital budgets cover just the basics but legislators did manage to set aside $685 million, enough to pay for a $1,000 Permanent Fund Dividend this year.

Municipal governments with outstanding school debt including the Matanuska-Susitna Borough got a last-minute reduction in school bond debt support, however, a consequence of the lean budget. About $3 million was cut from money Mat-Su would have received, about 25% of what was expected. Other local governments such as Anchorage also experienced reductions.

A state trooper post for Talkeetna was also cut, a disappointment for local residents who were hoping for more police protection in that area.

In actions over the weekend the Legislature approved a bill that will speed insurance companies’ authorizations for coverage of medical procedures, easing a problem that has plagued health care providers and caused anxiety among patients on whether their treatments will be paid for. Senate Bill 133 passed the state House Sunday, May 18, after passing the House earlier.

In other actions, Republicans in the state House blocked action on an overhaul of state election procedures they said was defective.

Senate Bill 64, now in the House Finance Committee, has weaknesses despite many proposals by Republicans and the governor being included, said Senate Republican leader Mike Shower, R-Wasilla, who has been deeply engaged in the election overhaul.

The goal of making it “easier to vote, but harder to cheat,” is true only for the easier-to-vote part, said Shower, who has been deeply engaged in the election overhaul. The bill as it passed the Senate was too lopsided and without enough protections, he said.

Sen. Bill Wielechowski, D-Anch, who spearheaded the work on SB 64, said one big gain in SB 64, as it passed the Senate, was dropping the requirement for a witness signature to mail-in and absentee ballots. Removing the second signature solve a big problem, he said. Thousands of ballots cast in rural Alaska and on military bases have been disqualified because of this, Wielechowski said.

But Sen. Robert Myers, R-North Pole, a Republican Minority member, disagreed with Wielechowski, arguing the witness signature adds a level of validation of residency, although he acknowledged the election division lacks resources to do signature verification. Witness signatures are required for Permanent Fund Dividend applications and there’s no reason it can’t be done for election ballots sent by mail, Myer said. Failure of the bill this year means that the 2026 elections will be held under existing rules.

Some of the election changes may survive. In a late action the Senate was considering changing another elections bill that had passed the House. If sections of the SB 64 are added the House would have to agree to the changes.

Another bill that advanced, but did not pass adjournment, is HB 78, providing a defined benefit (traditional) pension option for public employees in addition to the current defined contribution, or 401(k)-type retirement savings.

The bill passed the House 21-19 on May 12 on a partisan lineup and is now in the Senate Labor and Commerce Committee. It will be dealt with next year, said Sen. Cathy Giessel, R-Anch., sponsor of the Senate version, SB 28, which is also in the Labor and Commerce Committee.

The new pension option would aid in recruitment and retention, a critical need, she said. The state has spent $700 million in the last six years in bonuses in hiring and retaining existing staff, Giessel said in a briefing last week. “This is the cost of doing nothing,” about pension reform, she said.

The state dropped its traditional pension system years ago out of concern for costs, switching to a 401(k) retirement plan where public employees save for retirement with public employers making a contribution. Since its adoption Giessel and other critics of the current system have said that the 401(k) system, where many public employees try to manage their own retirement investment accounts, has underperformed performance of funds set aside for the traditional pension fund, which is managed by finance professionals under the supervision of a state retirement board. Many older public employees are still under the traditional pensions, which allows comparisons to be made.

The underperformance combined with stagnant pay has led to a loss of experienced public workers particularly in public safety. Alaska police officers and firefighters are being aggressively recruited from out of state. The offer of traditional pensions, or at least the option, is a powerful recruiting tool, Giessel has said.