The Alaska State Capitol is seen on Wednesday, March 4, 2026. (James Brooks photo/Alaska Beacon)
A potential $500 million windfall is giving the Alaska House of Representatives a headache.
On Friday, the Alaska Department of Revenue released a forecast predicting that the state of Alaska will collect hundreds of millions of dollars more oil revenue by June 30 than previously expected.
That forecast landed in the middle of an ongoing debate over whether or not to spend from savings to cover almost $530 million in extra expenses, largely added by Gov. Mike Dunleavy, to the state budget since last spring.
The Senate approved a proposal to pay for roughly three-quarters of those expenses and it is now in the state House, awaiting a vote that could come as soon as Monday.
Tensions rose on Friday, with no agreement among House lawmakers on how to pay for the proposal.
The House is led by a 21-person multipartisan coalition whose members have been urging fast action on the issue. They say it is particularly important to fund $70 million for the state’s transportation projects to unlock more than $630 million in additional federal funding.
Without sure money, majority lawmakers say projects can’t go out to bid and construction firms can’t make purchasing and hiring decisions.
The majority wants to use the state’s Constitutional Budget Reserve, a savings account, to provide guaranteed funding.
The majority can pass a bill on its own, but it can’t spend from savings on its own. It takes 30 members of the House and 15 from the Senate to approve spending from the Constitutional Budget Reserve, the state’s principal savings account.
The Senate has already given that approval, but in the House, at least nine members of the 19-person, all-Republican House minority would have to support the majority, and so far, they’re not willing to do that.
Part of that reluctance is because as currently written, the supplemental budget bill allows lawmakers to spend up to $373.6 million from the reserve regardless of whether or not the war-caused bonus becomes real.
If oil prices stay high and the reserve money isn’t needed, the majority could spend it on other things without further input from the minority. That’s because it takes only 21 votes to advance a budget bill.
The money would return to the reserve only if it was unspent at the end of the fiscal year.
If lawmakers don’t spend from savings and the Iran war ends unexpectedly quickly, causing oil prices to fall, the minority could vote to spend from savings later to fill the gap.
The result is an ironic set of circumstances — Trump has said that the war will be short, but minority House Republicans’ action is effectively a bet on a long war.
Minority members say they’re being fiscally responsible. So do members of the majority, who add that there’s an opportunity cost for any delay — Alaska construction companies can’t make plans for the summer until they know what projects they’ll need to build.
Majority members also expressed frustration that the supplemental budget was largely requested by the governor, who they say has been absent in negotiations.
In addition, legislators and Gov. Dunleavy could also find themselves with a problem if oil prices fall after legislators have adjourned for the summer.
Legislators typically write budgets based on forecasts from the Department of Revenue, but this year’s forecast is especially uncertain, the department said.
Rep. Calvin Schrage, D-Anchorage, co-chair of the House Finance Committee and a member of the majority, said he’s skeptical of banking on the forecast.
“I have a lot of concern over budgeting based on that forecast, because that’s all it is. It’s a forecast. It’s not realized money, it’s not money in hand,” he said Friday.
“Even with this optimistic forecast, you are just barely, maybe able to balance the budget — if everything goes perfect. We still don’t have additional supplementals,” he said, referring to more budget amendments that could be requested by the governor.
Schrage said lawmakers will be scrutinizing the forecast in the coming days and weeks, and he said there’s still the possibility the Legislature may need to draw from savings.
But minority Republicans said they considered drawing from savings fiscally irresponsible.
“Taking a draw from our savings account to put into the general fund to fund things that were, by all accounts and purposes, able to be funded without it would have been irresponsible,” said Rep. Justin Ruffridge, R-Soldotna, on Friday.
House Minority Leader DeLena Johnson, R-Anchorage, said she’s confident in the forecast projections. “There’s some actuals there too. So I’m very comfortable with actuals, and I also know, if there’s changes, we can come in and we can come in and make them, and make a different vote. I’m not as worried about that.”
Speaker of the House Bryce Edgmon, I-Dillingham, expressed frustration at the delay.
“This is pure politics. We should have had the supplemental budget funded. A long time ago,” he said. “The House Majority coalition prioritized the funding of the entire package that was proposed by the governor. Every single item came from the governor. And so here we are, you know, in a really precarious state, because we’re at the point where every week that goes by gets us a week closer to that federal match not being achieved for the summer construction season.”
Edgmon and other majority legislators have voiced frustration about “moving goal posts” on the budget bill. While there are more than $530 million in proposed additions, the bill in front of House lawmakers contains only three-quarters of that amount because majority members wanted to attract members of the minority for the savings vote.
The remainder will still have to be addressed later, regardless of what happens in the upcoming vote.
Edgmon said it’s not clear to him what the Republican minority wants in exchange for a budget reserve vote.
“We don’t know what the ask is,” he said. “But it’s all about leverage, and unfortunately, it’s falling on the shoulders of a lot of smaller contractors around the state.”
As of Friday afternoon, it appeared as if the budget bill was on course to pass, but without approval to spend from savings.
If that occurs, the state of Alaska will be in the awkward position of hoping for a war long and difficult enough to keep oil prices high for months.
A snow-covered statue of William Henry Seward stands in front of the Alaska State Capitol on Wednesday, March 4, 2026. (James Brooks photo/Alaska Beacon)
The Alaska Department of Revenue is predicting that the Iran war will cause high oil prices for most of 2026, it said in a revised forecast published Friday.
Oil is no longer the No. 1 source of general-purpose state revenue in Alaska, but the higher wartime prices are expected to bring hundreds of millions of extra dollars to the state treasury.
Last fall, the department’s forecasters predicted $6 billion in state revenue for fiscal year 2026, which ends June 30.
Now, they’re predicting $6.5 billion, an increase almost entirely caused by the Iran war.
Much of that money has already been earmarked for spending.
Since last spring, when state legislators and Gov. Mike Dunleavy enacted the state’s fiscal year 2026 budget, the governor’s office and legislators have proposed more than $530 million in budget amendments — for disaster relief, road construction, prisons and more.
On Thursday, the Alaska House postponed a vote on some of those amendments because many lawmakers said they wanted to see the new forecast before deciding whether or not to spend from savings to pay for those items.
On Friday, some legislators said they still support spending from savings because the forecast depends so heavily on the vagaries of war. Others said they felt their caution was vindicated.
“It’s all a gamble on the price of oil actually landing where the Department of Revenue is forecasting it could be in the future,” said Speaker of the House Bryce Edgmon, I-Dillingham.
It takes 30 votes in the state House and 15 votes in the state Senate to spend from the Constitutional Budget Reserve, the state’s principal savings account.
The House is led by a 21-person multipartisan coalition that has doubts about the forecast and wants to spend from savings to pay for more than $373 million in budget amendments, a plan already accepted by the Senate.
But because it has only 21 votes, the coalition needs the support of at least nine members of the 19-person, all-Republican House minority.
On Thursday, and again Friday, members of the minority were unwilling to offer that support.
In a series of interviews, they said they felt confident the forecast will hold, and if it doesn’t, they can approve a savings draw later.
“Having a need to see this revenue forecast was very important to us before we made any decisions,” said Rep. Justin Ruffridge, R-Soldotna. “It was about ‘how do you spend money wisely?’ And I think we’re always going to be proponents of spending money wisely. Spending money wisely is not taking money out of savings when you don’t need to.”
Alaska doesn’t have a statewide income tax or sales tax. An annual transfer from the Alaska Permanent Fund accounts for about 60% of the state’s general-purpose revenue. Oil accounts for about 25%, but that proportion can fluctuate with the price of oil.
While the new forecast doesn’t specifically predict the length of the Iran war, state forecasters appear to doubt President Donald Trump’s claims of an imminent end to the fighting.
Last fall, the department predicted that the average price of a barrel of North Slope crude oil would be $65.48 for the 12 months ending June 30.
In February, the average price of a barrel of North Slope crude was $69.48. So far this month, it’s $88.71. On Thursday, the daily price topped $105 per barrel.
The new forecast expects prices to average $91.09 per barrel through June 30, the end of fiscal year 2026.
“The price forecast for FY 2027 is $75.00 per barrel, which assumes that prices will begin FY 2027 over $80.00 per barrel and decline throughout the fiscal year,” forecasters wrote.
They went on to explain that the forecast is especially volatile and unpredictable this time around.
“While the price forecast is $75.00 per barrel, there is approximately a 10% chance that oil prices could average $130.00 or higher, and a 10% chance they could average $45.00 or lower. This range reflects the genuine uncertainty present in today’s market,” they wrote.
Even as they debate supplemental spending in the current fiscal year, legislators are also at work on writing the budget for the next fiscal year.
Last fall, the Department of Revenue predicted the state would have $6.2 billion in general-purpose revenue during FY27. Now, the forecast is above $6.7 billion.
The next two months of the legislative session will decide how that money gets spent.
U.S. Rep. Nick Begich III, R-Alaska, speaks to a joint session of the Alaska Legislature on Tuesday, March 10, 2026. (James Brooks photo/Alaska Beacon)
After his address to the Alaska Legislature on Tuesday, Rep. Nick Begich III, R-Alaska, sat down for an interview with the Alaska Beacon.
This transcript has been lightly edited for clarity to remove “ums,” “ahs,” and other disfluencies, including the reporter’s cellphone alarm going off in the middle of the interview.
A: You know, I haven’t seen a lot of movement, unfortunately. From the other side of the aisle on this issue, there’s been conversations regarding what’s happening inside DHS as a lever point for the Democrats to try to make changes that they think need to be made in that organization.
We have to remember that DHS includes the Coast Guard, it includes the TSA. It includes CISA. It includes a lot of components of our homeland security infrastructure beyond just Customs and Border Patrol.
So holding up DHS funding does not directly impact the funding for that part of the Department of Homeland Security. At the end of the day, we need to make sure people are getting paid. We need to make sure that these organizations, these groups, are funded, and that’s my priority — to find a way through that.
A lot of those conversations really are happening at the Senate, because the House has already passed funding for the DHS appropriations bills twice, and so we’re waiting for the Senate to reach an agreement with the administration.
Q: Is there any chance of a partial thing that could get Coast Guard, TSA or some other aspects funded?
A: There’s always an opportunity for something like that. I’d certainly be supportive of seeing even a partial opening of those resources. But at this point it appears to be at an impasse.
Q: The other big thing at DHS recently was the ouster of the secretary. What do you think about that changeup?
A: I think it’s broadly supported. There was recognition that change was necessary.
Q: Do you support it?
A: I do support Sen. Markwayne Mullen. He is an accomplished senator. He’s done a great job. He did a great job in the house. In fact, the first time I met Sen. Mullen was in Don Young’s office, and they were working together on getting a hearing for some of his constituents in the House Natural Resources Committee. And he was very amicable. He has a great relationship with Alaska. I think he’ll be a solid selection to lead the Department of Homeland Security.
Q: In your speech today, you talked about immigration enforcement in the context of drug trafficking here in Alaska and other places. We’ve also seen children and legal residents caught up in the immigration crackdown. Do you think Immigration and Customs Enforcement is doing a good job at this point?
A: I think Immigration and Customs Enforcement needs to ensure that it’s prioritizing deportation actions. We know that there have been quite literally hundreds of thousands of criminals that have been arrested and deported at this point by Immigration and Customs Enforcement. That’s where we should be prioritizing our efforts.
There’s been a lot of self deportations as well, over 2 millionreported self-deportations. That’s going to continue, because when folks leave the country, getting back in is going to be a lot more challenging than it has been during the previous administration.
So I think net, the migration out among people who are not in the country legally, is actually good for us as a nation. We’re seeing this in towns that have large illegal alien populations. Rents are coming down. The hospitals are opening up. The schools have less pressure. So there’s less pressure put on those residents, especially residents at the lower end of the income curve, they’re able to afford living again.
So I think it’s a net benefit.
I think we need to be careful in the way in which we prioritize those actions, but I support the direction. And look, the voters in the previous election cycle made it clear that this was a top priority, and how we go about doing that matters, but it’s a top priority.
A: I don’t have any updates on that specific case. I’m familiar with it at a high level. To my knowledge, the family has not reached out to our office requesting support, but we recognize that every case is different, has its own unique set of circumstances, and sometimes those circumstances, there can be extenuating circumstances that make a particular specific case unique. And I recognize that there are specific circumstances in this case that make it a little less clear-cut than others.
Q: Switching gears to the gas pipeline — you talked about that a lot in your speech. There was one thing that you said a couple different times: Gas from the pipeline would lower energy costs here. Have you seen figures showing the consumer price of gas from the pipeline? I’m wondering what that idea is based on.
A: I have seen figures, and here’s what I want to communicate about this: Right now, we’re looking at importing gas for the first time in the history of Southcentral Alaska. We’ll be importing gas. The gas that’s imported is more expensive than the gas that we’re producing right now. And what an in-state gas line, Phase 1, will do is put a cap on our gas prices. So that will be the new ceiling for gas in-state. And that’s good, because we don’t want to be subject to the swings of gas production.
Q: That ceiling is higher than the import price, though, right?
A: Well, so as soon as that in-state gas line is completed, then the export facility goes into place, and once the export facility goes into place, the gas prices will be lower then than they are today for the consumer, so we will actually see a net decrease and a significant decrease in the cost of electricity for folks who are on the Railbelt in Alaska and the price of home heating.
Q: What are you seeing that makes you think that it’ll go to a second phase? Because I think the worry is that under the worst-case scenario, the state puts in a lot of equity on that first phase, the second phase never comes about, and we’re stuck with a pipeline that is producing very expensive gas, and we’ve spent billions, hundreds of millions.
A: In conversations that I’ve had with investors in the Lower 48 and with folks who are interested in investing who reside outside the United States, I’ve received significant assurances that, once the gas line is constructed, the financing of an export facility will be far easier. And I think most of the investment community, based on my conversations, has assigned the greatest amount of risk to Phase 1.
Q: Why is that?
A: I think it’s because of the perception of permitting challenges in the United States that don’t exist in other jurisdictions around the world.
Q: The idea being that it’s tougher to build an 800-mile-long pipeline than it is to build liquefaction and decarbonization facilities?
A: Liquefaction facilities are boilerplate. They’re very straightforward. The plans exist. They’re known quantities in terms of the budget and time required to implement one. They’ve been built all over the world, and so there’s very little variance that an investor can expect from that particular investment.
I think there’s a greater degree of uncertainty centered on the perception of permitting issues in the United States. And so thankfully in our case — and we’ve communicated this, and continue to communicate — we have all the permits that we need, and we have proven that we can not only build but also operate a long-haul pipeline in the state over a long period of time.
We have a strong track record for the trans-Alaska oil pipeline, and the gas line is a lot less complex than operating, maintaining the trans-Alaska oil pipeline.
So I believe we have a strong case to be made. If we weren’t being successful at making that case, we wouldn’t see all of these entities coming to the table signing intent agreements with Glenfarne around purchasing supply.
Q: How likely is it — or have you seen any signs of movement on a federal loan for the project, a federal grant for the project?
A: I’m encouraged about the federal loan program. We’ve had many conversations behind the scenes to support the advancement of that loan guarantee between Glenfarne and the Department of Energy, the funds are available. The program exists. I think we’re getting closer and closer every day to getting that commitment.
Q: Do you have any sense on when there’ll be a decision on the first phase of the pipeline? Because I’ve seen that timeline kind of slip from the end of last year to February and now to some indeterminate date.
A: Yes, so to reach the final investment decision, it’s always required three key components. One is making sure you have customers. Two, making sure that you have producers willing to sell. Three, making sure you have a pool of investors that you believe when you press the button, they’re ready to invest.
We certainly have the producers ready to sell. We certainly have the commitments needed. And I think there might only be just a few more commitments on the edge before we hit that magical threshold that we’ve heard about 16 million tons per year of committed natural gas for sale.
Once those two things click in, the rest is really an exercise in understanding the financial structure of the total deal. And Juneau has a lot to do with that. This was something that I discussed in my remarks today, thinking about ways that we can support a large investment into Alaska. It’s critical that we think through these issues in a really constructive way. The goal of Alaska shouldn’t necessarily be to squeeze every single last drop of value out of the gas line.
Q: Why not?
A: Because the exercise of doing that itself can kill the ability to get the project off the ground, and then you get nothing. And so it’s important to do our best, but it’s also important that we provide a set of rules and a tax structure that’s attractive to get that investment into the state. We’re not talking about a small number here. We’re talking about $40-50-60 billion — it’s going to be a big number, and for us to attract that level of investment in Alaska, it’s got to look good to an investor. And so my edification to the Legislature today was: study the project, model the project, make sure that it’s good and right for Alaska. But at the end of the day, we need to have an environment here where we’re speaking with one voice, and that’s attractive to investors who have other choices around the world. They can choose to deploy their capital in any number of places. We need them to decide to deploy their capital here.
Q: When I heard your remarks, I immediately thought of Sen. Giessel’s bill. Was that your intention to be speaking about that?
A: It was not my direct intention. No, I think it’s always worth having the conversation about the tax structure, about the incentive structure, though that’s an ongoing discussion that happens at the state legislature in Alaska. I think it’s important that when we have those conversations, they’re done in a way that is going to encourage, rather than discourage, industry from coming in and saying, ‘Yes, this is a good place for us to invest in.’
And we have to remember, it’s not just the investors in a gas line, it’s also producers. We have some big activity on the horizon on Alaska’s North Slope, significant lease sale opportunities later this month. And we want that investment climate to be positive for producers as well, because it creates a lot of jobs. It creates an opportunity to unlock revenue streams that we don’t currently have coming into the state with the 50-50 split that moves to 70-30 on new NPRA and 1002 area leases. So there’s a lot of reasons, not just the gas line, that we want to make sure that we have clarity, simplicity and stability in our tax code.
Q: Talking about the new leases — we didn’t see any interest in Cook Inlet. That’s not a big surprise. That’s been the pattern for a long time. The NPRA one on the 18th is going to be really interesting. What do you think is going to happen on that?
A: I’m encouraged, but I hate to make predictions before the big game. But there’s been a lot of interest. I can tell you that interest from people throughout industry, people who have never been operating in Alaska, and we’ll see what happens. But I think what’s really appealing, not only have we reversed some of the previous regulatory structures that were going to inhibit future development of that area, but we’re issuing a large enough land package that a company can look at this and say, I can invest here, not just for one project, but for an entire corporate platform, where they can come to Alaska and say, ‘This is something I can see us investing in for 20, 30, 40 years.’
Q: Are you thinking of Santos or Oil Search, that kind of approach to it, like what they’ve done on the North Slope?
A: Or even what has happened before when ARCO was here. BP came in later. I mean, these are huge platform components of an entire energy company. I think with the lands package magnitude that’s being advanced right now, it raises Alaska to that level where large players in the energy space can look at Alaska and honestly say this could be somewhere they could invest for decades.
Q: The 70-30 split won’t apply to these leases, right? It’ll just be the ones after the switchover date. Or does it apply?
A: It applies to these leases, and once they’re leased for the first roughly nine years, we’re at a 50-50 split following that, it’s 70-30 for as long as the lease exists. And this is really interesting, because most of these projects will take a while to spin up, right?
Q: We’ve seen that with Willow, where it’s taken 20 years.
A: That’s right. So nearly all of the revenue that will be generated from this set of lease sales, which runs over 10 years, will be at that 70-30 threshold. The initial lease payment will be at the 50-50 but once production starts, essentially we’re going to be at the 70-30 for the life of these fields.
Q: To switch subjects again — the big thing right now is the Iran war. You’ve talked about it, talked about your support with it. Are you satisfied with how the war is being fought at this point to accomplish the goals that you’ve laid out?
A: I am. I’ve been impressed with the precision of our war fighters. I’ve been impressed with —
Q: Despite the bombing of the school?
A: Well, that’s still under investigation, and I don’t think that we have gotten root cause, full root cause analysis on that.
Note: Hours after this interview, a preliminary investigation concluded that the United States did destroy the school, killing students and teachers.
Q: But it was an American Tomahawk that destroyed that?
A: My understanding is that is still under investigation, and I’m still waiting for final information on that. But nevertheless, we have decimated their navy. We have destroyed their offensive capabilities with respect to ballistic missiles. We have severely degraded their nuclear program. And I think the message is abundantly clear, the United States is not going to tolerate a nuclear Iran, not today, not ever.
We’re not going to tolerate an Iran that seeks a nuclear weapon. We are not going to tolerate an Iran that chants “Death to America” in their official places of legislative business.
This is not something that the United States can take lightly. And when we think about the tens of thousands of people that the regime murdered, protesters murdered in the streets, this is a regime that is, quite frankly, very evil.
It’s not just us that they’re a danger to. They’re a danger to citizens in the region. They’re a danger to their own citizens. And at the end of the day, the United States has a responsibility to America. We have a responsibility to our allies.
I receive confidential, classified intelligence briefings, as do other members of Congress. And I walked into the first Iran briefing thinking that this was the right decision. I left that briefing knowing that it was.
Q: The President has talked about the ultimate goal being unconditional surrender. Is that your understanding as well, and what does that look like to you?
A: We need leadership in Iran that is ready to abandon their nuclear ambitions. To me, that’s what success looks like when we achieve that agreement. That is a mission objective that has been checked off the list. We’ve been trying to do this for decades. We’ve been trying to back Iran off the plate with respect to their nuclear ambitions for quite some time. They have negotiated with us in bad faith. They have used stall tactics, lies, deception, to continue to pursue their nuclear ambitions. And we have to remember this is a theocratic regime that is hell-bent on the destruction of the United States, among others, and because that ideology is held at the level of religious fanaticism, it’s very difficult to negotiate in a productive way with these people. So we need leadership in Iran that we can trust is going to abandon these ambitions.
Q: One of the side effects of the war has been the spike in fuel prices recently. Do you think there’s something Congress should do on that, and if so, what is it?
A: Unfortunately, the Strategic Petroleum Reserve was drained significantly under the previous administration prior to the midterms. We did not have a true energy emergency at that time, but we have the potential to have one now. I think that use of the SBR should be considered. But what we’ve also seen is oil prices spike to around $120 a barrel and back off down to the high $80s. And that has happened just in the last 12 hours or so. We’re seeing that the Strait of Hormuz is opening back up already, and if that continues, I believe that we will have more normalized prices at the pump as a result of oil dropping into a $70 to $90 range. We’ll see what the capabilities of the Iranians are and their commitment to attempting to disrupt oil flows actually is over the next week. But if we use the missile launches from Iran in the region as a proxy for their capabilities, they’ve been severely degraded. And so I would expect that we’ll see the strait continue to normalize over the coming weeks, and that should result in more stability at the pump.
Q: So not necessarily any congressional action needed immediately on this?
A: Not necessarily. We’ll have to watch and see whether oil prices sustainably rise over $100 a barrel. I think once we get into the $120 to $150 range, that gets a little more concerning, of course. But as long as we can keep those prices under $90 a barrel, the end consumer is not going to see a significant long term structural price increase in gas. It will be temporary.
Q: In your speech, you had talked about workforce development as part of your call to action. Was there legislation or a specific bill or a specific act you were thinking of?
A: Well, this is where the state legislature really has the opportunity to excel. At the federal level, we’re obviously very supportive of vo-tech programs. We want to see people have pathways for careers that aren’t necessarily a traditional four-year university track, and we need the university and their partners to ensure that they are doing everything they can do to prepare the Alaskan workforce for this opportunity around the corner.
I want to see as many Alaskans get jobs as possible in this pro-development environment, whether that’s directly on the gas line or in new mines that are spinning up or additional activity in traditional oil development on the slope. We want to make sure the next generation of Alaskans is prepared. I think the university is doing a great job. I think AVTEC is doing a great job, but we want to make sure that they have the resources from the state prioritized so that they can continue to prepare our workforce for what’s to come.
Anyone who wants a job should be able to get one when the gas line turns on.
A: It was not a reference to any particular or specific legislative action. This is just encouraging everyone to make sure we have a workforce that’s ready for what’s to come.
Q: Is there anything else we haven’t covered that you think I should know about or you think I should pay attention to?
A: I think one of the things that that I’m particularly proud of is that we’ve been able to move legislation through the House, through the Senate, to the President’s desk on behalf of Alaska in a time when we have the slimmest majority in U.S. House history and have had the longest government shutdown in history, and that’s due in no small part to my team in Washington, my team in Alaska, and our commitment to bipartisanship.
We’re looking for ways to move the ball down the field for the state of Alaska, and the best way to do that is to find bipartisan areas of agreement where bills can move. And I believe we’ve done that, and we’ve done it very well in the first year, plus, I would expect there will continue to be strong opportunities to advance bipartisan, common sense legislation for Alaska, and we are going to continue to pursue it.
Q: The tax-free dividend thing. Do you see that as part of — manufacturing runs, grinding out the yards, whatever sports analogy you want to use — or do you see that as more of a home run hit? How big a lift is that?
A: It’s going to be a lift. OK. It’s going to be a lift. But the nice thing is that it only applies to Alaska right now, because other states don’t have direct payments from their sovereign wealth funds, where sovereign wealth funds exist in other states. You have to have these bills in existence in order for them to have an opportunity to pass. And sometimes a must-pass piece of legislation will show up, and you’ll have an opportunity to attach a priority for your district. In our case, Alaska, we wanted to make sure that we had this in the clip ready to go.
When that opportunity arrives, sometimes it happens faster than you think it will.
Sometimes it takes a while, but you have to have the legislative text ready to go for the moment that arrives, and that’s what we’re doing on that bill. And I’ve always thought how strange it is that we receive a payment from the state of Alaska and then turn around and take a portion of that payment and give it to the federal government.
They already take a cut of the corporate income taxes for corporations that operate here, they take a cut of any of the federal revenues that are generated on federal lands, and quite frankly, quite higher than was ever anticipated. We were supposed to get 90% of federal royalties and revenues for oil and gas and minerals, and instead, we’ve gotten 50-50 since statehood, until my bill that just passed in the budget reconciliation process.
So there’s always an opportunity. I think the federal government owes us, and if we can get that over the line, I think it’ll be a big win for Alaskans.
Rep. Zack Fields, D-Anchorage, speaks Friday, April 26, 2024, on the floor of the Alaska House of Representatives. (Photo by James Brooks/Alaska Beacon)
Anchorage Democratic Rep. Zack Fields was listening to a speech by Republican U.S. Rep. Nick Begich III when he got fed up.
Fields scribbled a note on a nearby sheet of paper: “ICE out of Alaska” and held it up on the House floor for a few minutes while Begich spoke to lawmakers.
That simple act riled Republicans, who sought to officially reprimand Fields and kicked off a sequence of events that roiled the state House this week and snarled legislative business for a day.
“That was probably not the best or most effective way to, you know, bear witness to the horror that ICE is inflicting on America,” Fields said in an interview Wednesday, the day after Begich’s speech. “But, you know, thinking about my kids, that was the one thing that I could do at that moment that didn’t interrupt the speech or get more dramatic.”
Begich, Alaska’s lone member of the U.S. House of Representatives, has been generally supportive of President Donald Trump’s administration, including the use of federal agents to aggressively imprison people and remove them from the country.
Begich did not mention those shootings during his speech, instead repeating the Trump administration’s stated justification for the immigration crackdown — that it is intended to address drug trafficking.
“Nick Begich was going on about fentanyl and ICE, and it’s just not right,” Fields said. “That just completely outraged me, because ICE is arresting random children and adults who have been here for years, following the law, founding local businesses. I just thought it was grossly misrepresentative, outrageous, and I got angry about it because my kid, my kids, go to school with a bunch of families who are worried they’re going to be kidnapped or separated from their children.”
Fields’ sign was not visible to the Gavel Alaska cameras in the chamber and does not appear in a recording of Begich’s speech.
Neither Senate President Gary Stevens, R-Kodiak, nor Speaker of the House Bryce Edgmon, I-Dillingham, saw the sign. Both were seated behind Begich as he spoke.
Hours after Fields held up his sign, members of the House’s all-Republican minority issued a statement denouncing his action, saying that it violated legislative rules and decorum.
“Sitting on the House floor during our Congressman’s annual keynote address is not the place for disruption and waving protest signs. This behavior reflects a lack of professional maturity and a blatant disregard for the rules of this body,” said House Minority Leader DeLena Johnson, R-Palmer, in the statement.
The following day, Johnson proposed that the House “issue a formal reprimand” against Fields.
House Rules Chair Louise Stutes, R-Kodiak and a member of the House majority, spoke against the idea, saying she spoke to Fields about it, and “further transgressions … will not be tolerated in the chamber.”
Fields’ description drew immediate objections from Republican members of the House minority.
“It’s an insult to every member here,” said Rep. Dan Saddler, R-Eagle River. “Maybe it was hidden from the cameras or not but that’s an insult. If a member here has an opinion, they can express it in public speech, they can put it on social media, they can shout it on a street corner on the soap box, they can take part in marches, they could even do it as we see in special orders as long as it’s done without objection.”
During a break in formal debate, Rep. Jamie Allard, R-Eagle River, called Fields’ description “bullshit,” a comment loud enough to be heard across the House chamber.
“I yelled bullshit because Zack Fields called ICE a bunch of murderers,” she said after the House adjourned for the day.
The vote to reprimand Fields arrived on the same day that lawmakers took up a contentious vote to extend a state declaration of disaster that began when ex-Typhoon Halong devastated Western Alaska last year.
The House majority also attempted to force a vote on the state’s fast-track supplemental budget bill, something opposed by the minority and another factor in the day’s tensions.
At one point in debates, Speaker of the House Bryce Edgmon, I-Dillingham, called a halt to proceedings in order to verbally dress down Saddler.
The day ended with the resolution against Fields still tabled and unlikely to come up again.
“And looking back, you know, probably there was a better way to do it,” Fields said afterward about his actions during Begich’s speech. “Obviously it was not in accordance with the procedure. But it’s like, what do we do when there are these outrageous acts and some people don’t even want to acknowledge them? … I think that’s a challenge every citizen of conscience faces every day.”
As for the sign? Fields said it’s already been recycled.
U.S. Interior Secretary Doug Burgum, with Gov. Mike Dunleavy, speaks at a March 12, 2026 news conference at the Ted Stevens Anchorage International Airport. Among the subjects he discussed was the Ambler Road, in which the Trump administration might invest. Burgum was with a delegation of Trump administration officials making a trip to Japan for an energy conference. Behind Burgum and Dunleavy is a stuffed polar bear on display at the airport’s north terminal. (Photo by Yereth Rosen/Alaska Beacon)
The Trump administration has already put money into a huge and controversial mining project by investing in a company that would benefit from the development.
Now the administration is considering putting federal money into another aspect of the project: the proposed Ambler Access Project that would put a 211-mile industrial road through the currently undisturbed lands in the foothills of the Brooks Range mountains.
Interior Secretary Doug Burgum discussed the idea of federal investment in the Ambler Road during a brief news conference in Anchorage on Thursday.
“I’d say the discussions are ongoing, but there’s a sense of urgency around this,” he said at the news conference, held at the Ted Stevens Anchorage International Airport during a stopover in a trip by administration officials to an energy conference in Japan. Gov. Mike Dunleavy met with Burgum and other officials during the stopover but was not part of Japan trip.
The Ambler Access Project is sponsored by an Alaska state economic agency, the Alaska Industrial Development and Export Authority. It would link the existing road system with the remote Ambler mining district in Northwest Alaska. That region holds large amounts of copper, and that has been much of the focus of exploration to date, though there are other minerals as well in the region.
Trilogy Metals Inc., based in Canada, is the main company operating the Ambler mining district and the company in which the Trump administration has invested $36.5 million. Trilogy has partnered with South32, an Australian mining company, to promote Ambler development.
Burgum said the lack of road access that has stymied commercial development in the remote region is due to change, now that President Donald Trump approved the Ambler Access Project, reversing a Biden administration decision.
Because of Trump’s go-ahead decision, “we think that the financing for the road is actually not going to be that difficult. There’s multiple parties that want to participate,” Burgum said at the news conference.
The Ambler Access Project is planned as an industrial-only road, with no public access, he noted. The plan is for industrial users to repay the government for road construction, and the nation needs the minerals that are in the Ambler region, he said. For those reasons, federal investment in the road makes sense, he said.
“The U.S. is actively considering whether to participate in financing or maybe even be one of the equity partners in that road itself,” he said. Getting enough financial support for the road will not be a problem, he said. “Because the resource there is so rich, I think the road financing will come together,” he said.
In October, when Trump announced his approval of the Ambler project, he also announced the investment in Trilogy Metals, which gained the federal government a 10% stake in the company.
The Ambler Access Project has drawn widespread criticism from environmentalists, tribal governments and others.
Critics of the mining road project have mostly cited environmental factors in their opposition, notably risks to the Western Arctic Caribou Herd and to salmon, both of which are important subsistence resources to hunters and fishers in Indigenous communities in the region.
But critics also object to the idea of public funding for a road to be used only by private industry. Although the project plan calls for the industrial users to repay the state for construction and maintenance, opponents of the Ambler Road argue that the project puts the state at too much financial risk.
On Monday, Ambler Road opponents released a study that found the project would cost the state $2 billion for construction, maintenance and financing.
That estimate is much higher than the cost estimates previously presented by the U.S. Bureau of Land Management, which is coordinating studies and permitting of the project. A 2024 supplemental environmental impact statement put the cost at $765.2 million.
The new cost report, compiled by engineer Lois Epstein for the organization Defend the Brooks Range, does not consider the type of federal funding proposed by Burgum.
Ambler Road critics said it underscores some of the project’s risks, nonetheless.
“This report tells us what we already knew – this road is a bad deal for Alaskans,” Maddie Halloran, state director at the Alaska Wilderness League, said in a statement released Monday. “After widespread opposition from Alaskans during the environmental impact statement process, it’s adding insult to injury to have this project pushed through to benefit foreign mining companies. This isn’t economic growth for our state, it’s a giveaway that puts corporate profit ahead of Alaska’s communities and our environment.”
Members of the Alaska House of Representatives watch the voting board in the House on Thursday, March 12, 2026, as legislators vote on whether or not to spend from savings on a fast-track supplemental budget bill. (James Brooks photo/Alaska Beacon)
The Alaska House of Representatives on Thursday postponed its final vote on a fast-track supplemental budget bill that would use the state’s largest savings account to cover some shortfalls in the current state budget.
Members of the House voted 21-19 to pull the bill from the House floor after it became clear that there were not enough votes to fund the bill from savings.
Thirty votes are needed to spend from the Constitutional Budget Reserve; a vote to spend from the reserve failed 22-18 before legislators reversed course, rescinded their rejection and sent the bill back to the House Rules Committee.
All members of the House’s multipartisan coalition majority voted in favor of the postponement; all members of the Republican House minority voted against it.
Rep. Mia Costello, R-Anchorage, was the only member of the minority to vote in favor of spending from the reserve. All legislators voted in favor of the underlying bill, even if they disagreed on how to pay for it.
A new vote on spending from the reserve could take place as early as Monday, but it might not be needed: On Friday, the Alaska Department of Revenue is expected to release a revised state budget forecast, and members of the House minority indicated they may be willing to bet that oil revenue from the Iran war will fill the gap.
“We have been blessed in this state. We have been blessed right now with the ability to look a little bit into the future … and notice that we have an additional amount of revenue that we have to spend. How incredible is that?” said Rep. Justin Ruffridge, R-Soldotna.
Rep. Andy Josephson, D-Anchorage and co-chair of the House Finance Committee, said he does not believe oil prices will rise high enough and stay high enough to pay for the supplemental budget bill without savings.
If Alaska North Slope oil prices were to average $90 per barrel between March 10 and June 30, that would raise an additional $300 million in state revenue — not enough to meet the need, Josephson said. Prices would have to average more than $105 per barrel for that period to avoid a withdrawal from savings, he said.
The bill in front of the House on Thursday would have spent $373.5 million from savings to unlock federal transportation grants, cover last year’s wildfire response spending, and pay for part of the cost of dealing with the disaster caused by ex-Typhoon Halong in Western Alaska.
All those items are additions for the current fiscal year, which ends June 30. Lawmakers are simultaneously working on a separate budget for the next fiscal year, which begins July 1.
The bill in front of the House on Thursday was adopted by the Senate on Wednesday after the six-person Senate minority negotiated the removal of $150 million in items in exchange for their votes on the bill and the draw from savings. Those items will still need to be funded later.
The biggest remaining item in the bill is $129.6 million to refill the state’s higher education investment fund, which was drained last year amid a veto-involved dispute between the Legislature and governor.
The item that has garnered the most attention is smaller — $70.2 million that would be used to match federal grants for highway construction.
The state’s construction industry has been lobbying heavily for the Legislature to approve that money early so companies can make plans for the summer construction season.
“There is no way I would ever vote to gamble the future of our construction and oil and gas industry on months of oil prices in the most volatile market and geopolitical conditions of my lifetime,” said Rep. Zack Fields, D-Anchorage.
Fields said any delay has a cost: “Even if oil prices come in higher for the rest of the year, the Department of Transportation cannot put out bids based on price forecasts. They have to have a budget bill passed by us.”
Without firm projects, construction companies cannot make hiring decisions, he said.
“This is now a starvation year for the construction industry,” Fields said.
The postponement preserves some political leverage for the 19 Republican members of the House minority. Because 30 votes are needed to spend from the reserve and there are 21 lawmakers in the coalition majority, money can’t be spent from the reserve without at least nine minority members in support.
After the floor vote, House Minority Leader DeLena Johnson, R-Palmer, said the vote was not about leverage, but, but that the minority voted to protect savings ahead of Friday’s forecast.
She pointed out that as currently written, the bill would have authorized lawmakers to spend hundreds of millions of dollars from the reserve, regardless of how much extra money the state earns from the Iran war.
“What we were really doing is making sure that we didn’t just give a full, free opportunity to take money from our savings and spend $378 million without any controls whatsoever.”
Republican lawmakers said they had not seen the revenue forecast yet, but expressed confidence in increasing oil prices, despite uncertainty around the Iran war.
“There’s a saying in the infantry, ‘no plan survives first contact with the enemy,’ right? So I don’t know what’s going to happen with the Iran war,” said Rep. Will Stapp, R-Fairbanks and a veteran of the Iraq war.
“I can tell you, there’s been a lot of oil and gas infrastructure that has been blown up, and you generally can’t rebuild that stuff in a day,” he said. “So I don’t expect, personally, oil to be like $150. It is going to be higher than it was three weeks ago, probably for a while.”
But members of the House majority were clearly frustrated by the delay.
“Volatility is a 10 out of 10 right now,” said Speaker of the House Bryce Edgmon, I-Dillingham. “I’ve never seen a responsible finance committee or responsible leadership in the House make such an effort to gamble on the future in terms of oil prices.”
Rep. Calvin Schrage, D-Anchorage, serves as co-chair of the House Finance Committee.
He pointed to past forecasts where revenues did not materialize and budgets had to be revised, and called the minority members’ move irresponsible.
“That’s what they were suggesting today, that we rely on a forecast — unrealized, unpredictable, uncertain money to finance a budget when industry and Alaskans are asking for certainty. I mean, as recently as last year, we saw the folly of that sort of budgeting methodology, and it’s irresponsible.”
L’eiwtú Éesh Herman Davis of Sitka, clan leader of the L’uknax.adí, from Kayaashka Hít (Platform House) is to receive a honorary doctorate of laws. (Courtesy/University of Alaska Southeast)
Lingít clan leaders L’eiwtú Éesh Herman Davis and Aanyáanáx Ray Wilson will receive honorary doctorates of laws from the University of Alaska Southeast during the May 3 spring commencement ceremony at UAS in Juneau.
UAS announced the awards for Davis and Wilson, as well as other distinguished Southeast Alaskans, on Friday.
Davis, of Sitka, is clan leader of the L’uknax.adí, from Kayaashka Hít (Platform House). He “has demonstrated exceptional leadership and dedication as he has worked to ensure that his knowledge of the Tlingit language, culture, traditions and history is preserved and passed on,” UAS said in its announcement.
“Davis has generously shared his extensive Traditional Ecological Knowledge, identified key historical locations on the landscape and worked with scholars to preserve Tlingit place names,” UAS stated. “As a master-level birth speaker, Davis has taught Tlingit language and dance for 50 years through the Sitka Native Education Program and Noow Tlein Dance Group, integrating storytelling, song, and dance into lessons and helping build an extensive curriculum to share with others. He has collaborated with co-awardee Aanyáanáx Ray Wilson to repatriate significant ceremonial pieces, including a Raven helmet.”
Davis and Wilson worked for decades to repatriate the Raven helmet that Ḵ’alyáan of the Kiks.ádi clan wore during an 1804 battle in Sitka against Russian colonists.
Aanyáanáx Ray Wilson, clan leader of the Kiks.ádi, from Gagaan Hít (the Sun House) is to receive a honorary doctorate of laws. (Courtesy/University of Alaska Southeast)
The state-run Sheldon Jackson museum announced in December that it would return the helmet to the care of Sitka Tribe of Alaska, and Kiks.ádi clan members, in accordance with the Native American Graves Protection and Repatriation Act.
Wilson, of Juneau, is clan leader of the Kiks.ádi, from G̱agaan Hít (the Sun House).
In Friday’s release, UAS stated that Wilson “has shown remarkable leadership in sharing Tlingit dance, stories, practices, and values, and has shifted the paradigm for how museums work with and represent Indigenous Peoples.”
“As a Tlingit culture-bearer, Wilson taught dance and culture for 25 years with the All Nations’ Children dance group (Lda Kut Naax Sati Yatx’i), and helped collaboratively develop a tool that teaches children about the Tlingit language and culture through music,” UAS said “Wilson worked with the Smithsonian’s National Museum of Natural History to ensure traditional cultural protocols were followed while restoring a ceremonial sculpin hat, and advised the American Museum of Natural History on integrating Indigenous perspectives into renovations, ensuring that Tlingit culture and traditions were represented as living and dynamic.”
UAS also announced Friday that it will confer an honorary doctorate of laws on Younce Kóo oo Wóo Russell Dick, of Hoonah, from the Kaagwaantaan (Eagle/Wolf) Clan.
Dick “is a catalyst for innovation and economic growth throughout Alaska and beyond,” UAS said. “As president and chief executive officer of Huna Totem Corporation, Dick has been an extraordinary leader in sustainable tourism, cultural stewardship, and workforce development.”
UAS also noted that Dick helped transform Icy Strait Point into a globally recognized destination.
“Throughout his career, Dick has held key leadership roles at Sealaska Corporation, Alaska Dream Cruises, Haa Aani, LLC, and Icy Strait Whale Adventures (Three Wolves Charters), and served as vice chair of the Alaska Industrial Development & Export Authority Board of Directors,” UAS stated.
The university in recent years has honored several Alaska Native leaders with honorary doctorate awards. In 2024 it conferred an honorary doctorate of education on Gooch Tláa/Kéet Tláa/Anne Johnson, a cultural educator and culture bearer who has contributed to the Sitka Native Education Program for some 50 years.
In 2021 UAS conferred an honorary doctorate of education on Pauline Duncan, a teacher and culture bearer of Sitka who created many culturally relevant classroom materials for Native children in her decades as a classroom teacher.
The head of the Alaska Division of Elections will not share legal advice that led to the state’s decision to send an extended voter list to the U.S. Department of Justice.
Alaska is one of 12 states that have either turned over their voter lists or have said they plan to comply with a nationwide request, according to records kept by the Brennan Center, a critic of the administration’s request.
Neither elections officials nor the Alaska Department of Law have explained why the state voluntarily complied with the request and signed the memo, or how compliance fits within the Alaska Constitution’s right to privacy.
That state’s Secretary of State said in a letter to federal officials that filings in a lawsuit showed that the department had shared sensitive information, including Social Security numbers, with “unauthorized persons,” and as a result, he could not guarantee that Idahoans’ identities would be safe.
In a pair of legislative hearings this week, Alaska lawmakers were unable to learn why Lt. Gov. Nancy Dahlstrom, Beecher, and the Alaska Department of Law reached a different conclusion.
Sen. Bill Wielechowski, D-Anchorage, grilled Beecher during a Wednesday hearing, pressing her to release the legal advice she received before the Division of Elections turned over its voter list.
“This is an issue of grave concern for hundreds of thousands of Alaskans, and you have the ability to provide us with those documents. You have the ability to waive any potential privilege. Would you be willing to do that?” he asked.
“At this point, I am not willing to waive that privilege,” she said.
Sen. Elvi Gray-Jackson, D-Anchorage, asked Beecher whether the department made a mistake by sharing the voter data and signing the memo that would allow the federal government to single out individual Alaskans.
“I do not, at this juncture, believe that the division made a mistake in signing the MOU,” she said.
This week’s toughest questions came from Democratic lawmakers. Beecher and Dahlstrom are both Republicans, and Dahlstrom is also a candidate for governor in this fall’s elections.
Republican lawmakers were generally silent in this week’s hearings.
Rep. Andrew Gray, D-Anchorage and chair of the House Judiciary Committee, said he was “in an awkward position” and reached out to a variety of experts in an attempt to avoid bias in a hearing he held on Monday.
During that hearing, Rep. Kevin McCabe, R-Big Lake, said he sees the state’s compliance as something like following the speed limit.
“When the federal government makes a law, we’re expected to follow it … it’s the federal government’s job, through whomever, to ensure that law is followed, and from what I understand, the federal government was merely attempting to make sure that Alaska followed the National Voter Registration Act,” he said.
The information transmitted to the Department of Justice goes beyond the publicly available voter information purchasable from the Division of Elections for $20.
It contains personally identifying information, such as birthdates, driver’s license numbers and partial Social Security numbers.
In a legal analysis performed last month, legislative attorneys called the DOJ’s request “unprecedented” and said the division’s handover would be legal only if the federal government requested the information “in compliance with federal law” and used “the information only for governmental purposes authorized under law.”
As of Wednesday, three separate federal judges — in Oregon, California and Michigan — have ruled that the federal government’s request is not in compliance with federal law.
Of the 48 states and the District of Columbia that have been asked for their voter lists, 29 and DC are fighting the federal government in court. The federal government has won none of those cases to date.
Legislative attorney Andrew Dunmire said he is also unaware of any federal law that allows the federal government to single out individual voters for removal from voter lists, as the MOU states.
On Wednesday, Beecher said the Department of Justice has not yet requested that any voters be removed from Alaska’s list. In addition, Dahlstrom said in December that the state would comply with the MOU only if the federal government’s actions are legal.
But with the Alaska Department of Law and the Division of Elections stonewalling legislators, it isn’t clear what the state considers a legal request.
Speaking to legislators this week, former Alaska attorney general Bruce Botelho advised lawmakers to continue searching for the legal advice given to elections officials by the Alaska Department of Law.
He also suggested that legislators consider filing a lawsuit to have the agreement with the Department of Justice declared illegal.
In a speech to the Alaska Legislature this week, Alaska Rep. Nick Begich III urged state lawmakers to boost the development of a proposed trans-Alaska natural gas pipeline.
“The federal path is largely cleared, but investors also need state level clarity, fiscal predictability and simplicity,” Begich said. “Scrutinize it carefully, model it thoroughly. But my request to you is not to become a roadblock.”
But legislators who are dealing with the pipeline on a daily basis say they don’t have answers to basic questions, including how much the pipeline will cost and whether the gas it carries will be affordable to Alaskans.
“I have not seen any figures,” said Sen. Cathy Giessel, R-Anchorage and chair of the Senate Resources Committee.
Senate President Gary Stevens, R-Kodiak, said legislators are not going to be a roadblock.
“We’re not going to throw sand in the works. Everybody wants a pipeline. We all hope that it comes about, but it’s got to be done properly and make sure that we know what’s going on.”
Sen. Bill Wielechowski, D-Anchorage, said he has heard “from very credible sources” that the price of gas through the pipeline could be $50 per million cubic feet by 2046.
The current cost of gas from Cook Inlet for Southcentral Alaska is about $10 per MCF.
“Just imagine if you have utilities locked into 30-year contracts for gas at $50 an MCF. That would be catastrophic,” Wielechowski said. “That’s the sort of thing that we’re trying to protect Alaskan consumers all up and down the Railbelt from — an absolute catastrophe to our economic system.”
As currently proposed, the pipeline project consists of two phases. The first phase includes an 807-mile pipeline from the North Slope to the west side of Cook Inlet, with a tie-in to existing natural gas infrastructure around Anchorage.
The second phase would extend the pipeline to the Kenai Peninsula, where an export terminal would be built. The second phase would also include a processing plant on the North Slope.
Since the acquisition, Glenfarne has signed a number of nonbinding agreements with potential gas purchasers and gas sellers, but it has not disclosed estimates for the project’s cost, and it hasn’t disclosed what it expects the cost of gas to be.
Last year, company officials said they expected to make an investment decision by the end of 2025. In a subsequent filing with the Federal Energy Regulatory Commission, they said they would make the decision in February. A new timeline hasn’t been made public.
The lack of data is particularly problematic because legislators are considering whether to offer a property tax break to pipeline developers.
Those taxes are significant. Because Alaska does not have a statewide income tax or sales tax, its state budget suffers when people move into the state. More people means more demand for things like schools, parks and roads, but no increased revenue to pay for those things.
“That bill should be next week,” Dunleavy said during a Thursday news conference with U.S. Interior Secretary Doug Burgum, confirming the 0.2% rate will be part of the new legislation.
“Last couple weeks, we’ve been working with municipalities, getting their input as to what this should look like before (we) put the bill out,” he said. “So look forward to probably next week on that PILT bill, so that we can look at the economics of this line and also ways to ensure that municipalities benefit from this directly.”
This week, Begich expressed some support for a lower property tax rate, saying it could encourage people to invest in the pipeline.
“The classic 2% tax burden that would apply, say, to a $50 billion asset, would be a billion dollars in cash flow early in the project’s life cycle,” Begich said. “If that cash flow coming out of the project lowers the rate of return for investors, they’re not going to show up and invest. And so we need to make sure that our tax policy is A, doing what’s right for Alaskans. B, is not impeding the ability for the project to move forward. And I think we can do both of those things with some creative thinking and conversations with the industry.”
While a lower tax rate would benefit pipeline developers, it has the potential to harm residents who live near the pipeline.
If pipeline construction and operation mean more people moving to Alaska and municipalities are unable to raise revenue to meet the resulting demand for services, local governments could be forced to raise taxes or cut basic services in order to pay for the pipeline subsidy.
Last week, the Senate Resources Committee introduced Senate Bill 275, which imposes some transparency requirements on the pipeline project, eliminates a tax exemption relevant to the project, and imposes a new surcharge on gas processing plants.
That bill was introduced just days before Begich urged lawmakers not to be a “roadblock.”
Giessel, who chairs the resources committee, said she didn’t think Begich’s comments were directed at her or her committee’s bill.
“We’re not being a roadblock. We’re doing exactly what we’re supposed to do according to our constitution,” she said.
Asked whether he was thinking of Giessel’s bill during his speech, Begich said, “It was not my direct intention. No, I think it’s always worth having the conversation about the tax structure, about the incentive structure, though that’s an ongoing discussion that happens at the state legislature in Alaska. I think it’s important that when we have those conversations, they’re done in a way that is going to encourage, rather than discourage, industry from coming in and saying, ‘Yes, this is a good place for us to invest in.’”
Speaking to reporters after his speech, Begich said the state would benefit by getting more information from Glenfarne.
“I welcome more information,” Begich said. “I recognize that they’ve got certain restraints on what they can share. But look, I’d like to see more information shared. I’d like to see more of the economics of the project shared so we can understand what the full potential is and what’s on the table. I believe that’s going to come with time, but more information is better.”
A monumental moment for state leaders is expected Friday with the release of an official forecast of how much extra revenue Alaska’s government may get due to the Iran war.
Oil prices have skyrocketed since the United States and Israel attacked Iran on Feb. 28, which had legislators on Thursday commenting on the grim reality the conflict may mean hundreds of millions of extra dollars for Alaska.
“I understand that we’re all feeling awkward about the unfortunate reason for the optimism, which is that mankind can’t stop itself from fighting,” said Andy Josephson, D-Anchorage, who co-chairs the House Finance Committee.
The day also saw lawmakers pull a $373.5 million supplemental budget off the House floor due to a bitter disagreement about tapping into a reserve fund to pay for it. Dissenters, all members of the Republican minority caucuses, said that decision should be made after the updated revenue forecast.
“I find it really interesting that we’re taking up this item the day before we actually know how much money we have and what the size of our deficit is,” Rep. Will Stapp, R-Fairbanks, said during floor debate. He said after talking to executive and legislative financial staff “I’m pretty confident that the vast majority of items in this are probably going to be able to be funded in this specific bill through the current (year) surplus.”
Members of the bipartisan House majority accused the minority caucus of playing Russian roulette with critical budget items such as transportation projects scheduled this year. The supplemental budget includes $70.2 million needed to secure about $630 million in federal funds for such projects — and public and private transportation leaders have been imploring lawmakers to move quickly on those funds so the window for this year’s work season isn’t missed.
“We’re saying, ‘Eh, we like to build, but we want to see what the revenues are later on,’” said Rep. Calvin Schrage, I-Anchorage, another House Finance Committee co-chair. “We’re going to continue to wait. We’re going to continue to leave people hanging. We’re at the verge of being too late. I’m getting texts as of this morning from industry leaders that if we don’t deploy this money now we’re jeopardizing hundreds of millions of dollars that would hit the road this summer. What are we doing?”
The transportation funds are needed because Gov. Mike Dunleavy vetoed them last year as part of a political fight involving the Cascade Point Ferry Terminal, which his administration favors and allocated tens of millions of dollars toward. Legislators voted to divert $37 million in so-called Juneau access funds to other projects — and questioned his support of the terminal since a state study says it will have negligible benefits for travlers, but benefit a planned gold mine in the area. Dunleavy subsequently issued his veto.
Other significant items in the supplemental budget are $98.7 million for wildfire response and up to $75 million for disaster relief.
Also included is about $130 million to replenish the Alaska Higher Education Investment Fund, which provides scholarships, after lawmakers tapped it last year to cover a deficit in the current year’s budget when the House minority blocked an effort to tap the state’s $3 billion Constitutional Budget Reserve, which is typically used for shortfalls.
The lack of minority support was again key during Thursday’s supplemental budget vote.
The House passed the supplemental budget by a unanimous 40-0 vote, following the Senate’s unanimous passage of it Wednesday. But a House vote to fund the budget by tapping the CBR fell short by a 22-18 vote since a three-fourths majority is necessary to access the fund. Rep. Mia Costello, R-Anchorage, was the lone minority crossover to the bipartisan majority coalition vote.
That resulted in the House majority voting to rescind passage of the supplemental budget and pull it from the floor, returning it to the Rules Committee. The House then adjourned until Monday — and House Speaker Bryce Edgmon, I-Dillingham, said it is not a certainty the bill will be brought back to the floor then even if the revenue forecast is known, since there also needs to be assurance the budget can be funded.
The $64 question: What will oil prices average this year and next?
Alaska lawmakers last spring passed a budget that balanced if North Slope oil prices average $64 a barrel for the fiscal year ending June 30. The official revenue forecast at the time was prices would average $68. But a grim revenue forecast in December stated this year’s prices would be $65.48 and next year’s about $62.
Oil was $92 a barrel on Tuesday.
House majority lawmakers said Thursday that if oil prices were to average $90 a barrel between now and June 30 it would mean about $300 million in extra revenue. That means the supplemental budget would still need additional funds — and presumes the war in Iran will last that long and cause sufficient disruption to oil markets in the process.
However, some analysts say oil could go above $100 a barrel. Oil prices at that level for a full year would generate an extra $1.5 billion more for the state compared to the most recent revenue forecast.
