Month: May 2026

Alaska Gov. Mike Dunleavy said Tuesday he is ordering state lawmakers into a special session to force a new decision on his top priority: property tax breaks for the company proposing to build a massive pipeline system to ship natural gas from the North Slope to tidewater.

Dunleavy outlined his plan during a news conference at the Alaska Sustainable Energy Conference in Anchorage. 

The special session, to start 10 a.m. Thursday morning, “will go on as long as they need to come up with a decision,” he said at the news conference.

The Legislature’s ongoing regular session ends at 11:59 p.m. Wednesday night, and legislators will enter special session the following morning.

The governor has characterized property tax-relief for the project as his top priority, and at the news conference he accused lawmakers of risking Alaska’s future by rejecting his plan.

The bill would replace state and local petroleum property taxes with an “alternative volumetric tax” on natural gas that would eventually flow through the pipeline.  That gives Glenfarne Group, the company developing the pipeline in conjunction with the state, a tax break that its leaders have said is necessary to attract investors.

Negotiations to pass the governor’s preferred legislation fell apart on Monday, and Dunleavy blamed lawmakers for that outcome.

“This is a decision on the part of a handful of folks in Juneau who wish, for whatever reason I don’t understand, (to) play with the future of Alaska,” he said at the news conference.

Legislative critics of Dunleavy’s approach said Glenfarne had provided too little information on its cost estimates, thus making it impossible for them to determine whether the proposed tax break was appropriate. Some argued that the process had been too rushed. Dunleavy introduced his proposal in March, with the regular session half over.

But the governor had harsh words for those lawmakers. He said they were focused on the wrong things after an extremely cold winter that strained energy supplies in the populated Railbelt corridor.

“Last night there was time to shove a spay and neuter bill into an invasive species bill in (House) Finance,” he said at Tuesday’s news conference. “So Rome is burning and we’re shoving a spay and neuter bill into an invasive species bill.”

Dunleavy was referring to a popular bill to establish a statewide spay and neuter fund, House Bill 258, which was combined during Monday’s House Finance Committee meeting with another bill related to animals, Senate Bill 174, that would establish a state invasive species council. It has since been removed from the bill.

U.S. Interior Secretary Doug Burgum, a featured speaker at the conference, also nudged lawmakers to accept Dunleavy’s plan.

As a former governor of North Dakota, Burgum said he considered it “inappropriate” for him to insert himself into Alaska legislative business. However, he said lawmakers should focus on getting the gas pipeline built before worrying about how the revenues from it would be allocated.

“The key thing for when we’re competing (for) capital that can go anywhere around the world, the key thing for Alaska is: Get the project,” he said at the news conference. Alaskans should not worry about the revenue distributions until after a project is built and providing its promised myriad economic benefits, he said.

Burgum’s comments at the news conference echoed comments he made about the gas pipeline during his address at the conference.

“That project has to happen. And I would just invite Alaska to not get in your own way if you’re worrying about, ‘How do we divide up the pie,’ and the pie hasn’t even been baked yet,” he said. He called the gasline “a generational, transformational project that’s going to affect the state, the communities, the prosperity, the universities. I mean, the benefits of this thing are unbelievable.”

But lawmakers say those benefits have not been made clear to them, and neither have the cost tradeoffs.

Senate President Cathy Giessel, R-Anchorage, did not mince words in a newsletter she issued Tuesday morning that said the governor has demanded that lawmakers “pass his version of a gas pipeline bill that no one is allowed to know much about.”

“His version of a gas pipeline defies our Constitution – ignoring resource development for benefit of Alaskans (benefit for a private company), surrenders our taxing authority (removes local taxation authority, forbids financial transparency, logical financial assessment),” Giessel’s newsletter said.

Dunleavy’s decision to veto a pension-overhaul bill that had been two years in the making after lawmakers rejected this gas pipeline bill was a “transactional” decision that is “the worst possible way to make public policy,” she said.

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Alaska’s public employees and public school teachers will not have access to pensions this year.

In a 33-27 vote Tuesday, the Alaska Legislature failed to override Gov. Mike Dunleavy’s veto of a bill that would have created a new pension system for teachers, municipal employees and state employees in Alaska. Forty votes were needed for an override.

The failure was expected. Lawmakers had passed the pension bill, House Bill 78, by a combined vote total of 33-27 last month, and there was no sign that any legislator had changed his or her position since that vote. 

Alaska has been without a pension for new public employees since 2006, when lawmakers closed the existing pension plan to new applicants and mandated a 401(k)-style retirement system.

Though Dunleavy himself receives a public pension, he is opposed to opening a new system for current employees. In a veto message to lawmakers on Monday night, he expressed concerns about potential long-term costs and risks to the state.

“Pension obligations extend for decades, and the full cost of this bill may not be apparent until years after its enactment,” his veto message stated in part.

Despite the governor’s concerns, he was willing to allow the bill to become law as part of a grand compromise: If legislators approved a gas pipeline tax relief bill he supports, he would not veto the bill.

That arrangement fell apart on Monday afternoon after the House failed to advance the governor’s preferred proposal. The governor issued his veto about 10:39 p.m. that night.

Under the Alaska Legislature’s current interpretation of the state constitution, lawmakers are required to meet in joint session within five days to consider a veto override.

Under previous interpretations, legislators frequently skipped holding joint sessions if they either didn’t want to discuss an override or knew they lacked the votes to do so.

On Tuesday afternoon, though legislators knew an override was not in the cards, advocates and opponents spoke for a combined two hours before the final vote.

Rep. Chuck Kopp, R-Anchorage and the pension bill’s most vocal proponent, said the bill is intended to reduce the amount of staff turnover in the state. While the bill was expected to cost $73 million per year to implement, Kopp expected it would save over $240 million in training costs for new employees and overtime needed to cover positions left vacant by staff who had resigned.

“House Bill 78 is not a retirement bill. … It is a workforce bill, and it’s a resource development bill. We cannot build a gasline through this state unless we can retain our engineers. We cannot permit a mine when the permitting office turns over in 18 months. We can’t drill on the North Slope when the Haul Road isn’t being maintained,” he said.

Sen. Bert Stedman, R-Sitka, gave a 25-minute speech rejecting Kopp’s argument, saying in part that the lack of a pension system is not causing the vacancy problem. If the state’s Supplemental Benefit System — not used by some municipalities — is included with the state’s 401(k)-like public employee retirement system, Alaska has generous retirement benefits, he said.

Stedman suggested that higher salaries may be part of the answer to the state’s vacancy issues. Alaska used to be No. 1 in the country for teacher salaries. It’s now ranked below Washington state, he said.

Rep. Jeremy Bynum, R-Ketchikan, said that in his experience as an employer, higher salaries helped but weren’t a complete solution.

“That still didn’t solve the problem of retention, because people still cannot live in our communities affordably, so we’ve got a lot of challenges ahead of us,” he said.

Stedman also warned that the bill is based upon actuarial estimates that may or may not be accurate. The state’s prior pension plan was left only partially funded because of an actuarial error that led to a years-long lawsuit and left a multibillion-dollar shortfall.

Sens. Bill Wielechowski, D-Anchorage, and Jesse Kiehl, D-Juneau, each suggested that the proof of the need for the bill is in the state’s lived experience. Alaska has experienced 13 consecutive years of negative migration, and state and municipal governments continue to struggle to fill positions.

“This will make a tremendous difference if we override this veto and put back the option of a modest defined benefit pension for Alaska’s public servants,” Kiehl said.

The legislature’s regular session ends Wednesday night. 

Any new pension bill would have to restart from scratch in January, when the 35th Alaska Legislature convenes for its first year.

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