SESSION UPDATE — April 7, 2025 | | |
Dear Friends and Neighbors,
April isn’t the typical month for rollercoasters but it’s looking like this year is an exception. I by no means claim to be a tariff expert or a stock market analyst or an oil price authority, but I do want to advise you to hold on to the safety bar across your lap. This ride has an end. Resist the doom and gloom and keep your chin up.
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» Perspective is key «
Here’s some perspective that might help your churning stomach. We had worse single-day drops in the Dow and S&P 500 in March of 2020 and November of 2008 than we had last week.
As far as oil prices, when they take a downturn, fuel costs for transportation are great; here in Alaska, however, where oil revenues provide for our state budget, it’s not so great.
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» Watching the trends «
Even so, we must remember that we’ve had worse oil price declines than the estimated 2-day 15% drop a few days ago. Do you remember when the price plummeted from over $130 per barrel mid-2008 to $39 in early 2009? I do. What about the 70% decline between mid-2014 and early 2016? Not a favorite memory. April of 2020, the price even dipped below $0 briefly. We survived, and we will get through this too.
There will be much speculation as to the cause of the decrease in oil prices: are they due to the tariffs or did they occur because of the OPEC decision to release an additional 137,000 barrels per day into the market? Or is it due to both (my guess is both had an impact).
Whatever the cause, we’ll be watching the trends because to balance the Alaska state budget, North Slope West Coast oil prices need to average $78 per barrel. As of this writing, the Department of Revenue hasn’t updated their ANS (Alaska North Slope) oil price since April 3. Since ANS West Coast price typically runs $5-6 more than West Texas Intermediate (WTI), we can guesstimate. WTI is posting at $59.38 at this moment, so ANS may be in the mid-$60’s range. Definitely not enough to balance the state budget.
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» Popping a few balloons «
This past weekend, my husband had a milestone birthday, and after the party, kids walked away with helium balloon bouquets. Inevitably, as we were cleaning up, the popping sounds began. I can’t help to think that some political balloons are beginning to pop in Juneau.
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🎈Tax Bill Balloons
Now that oil prices have dropped, I’m guessing the interest in new taxes and increasing taxes on the oil industry will wane. This certainly will pop a few balloons held by those who’ve been giddy about oil tax bills moving along in the legislative committee process.
This brings to mind that I certainly have had fun popping quite a few balloons in the Senate Resource Committee recently related to SB 92. I did a little poking while the eager beavers who want to raise oil taxes rushed SB 92 through and out of the committee. Would you like to know what I pricked with my pointy pin? Of course, you do! As a reminder, SB 92 is the new tax proposal on oil and gas S-corps. Here are some of the jabs I made:
- A corporate tax isn’t a severance tax; by imposing it as one, the bill butts up against the equal protection clause in the constitution.
- Massachusetts (a liberal state) has a 4.5% corporate tax and it doesn’t kick in until a company hits the $9 million mark. Why do legislators in Alaska want to impose a 9.4% corporate tax at the $5 million mark?
- Alaska’s corporate tax rate is among the top four highest in the nation. If we want to be business-friendly, shouldn’t we think about lowering it?
- SB 92 doesn’t create a level playing field – it creates an even more uneven one: an S-corp would pay $80 million more in taxes than a C-corp in the $1 billion scenario provided by a CPA to the committee.
- Changing tax regimes when we finally have federal cooperation for responsible resource development is not wise and absolutely terrible timing if we want to welcome companies to Alaska and grow our economy.
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🎈My Two Favorite Zingers
- Hilcorp provided $191 million in state and local taxes in 2022 to two states, New Mexico and Colorado, based on its work in the San Juan Basin. For roughly the same amount of oil production, Hilcorp provided $1 billion in state and local taxes and royalties for its work to one state in 2023: Alaska. This was a double-balloon-pop because Hilcorp testified that the cost to do business in Alaska due to the short season, the cold, the lack of roads, the distances, etc. in many cases is about ten times more expensive than their work in the San Juan Basin. Let me say that again: ten times more expensive. And the oil tax eager beavers want more than the $1 billion per year that Alaska is already getting? Time for a reality check!
- Last but not least. The Resource Committee was promised that we would be provided an independent analysis and modeling of the proposed new tax, so we would know how the tax would impact oil production, revenue, royalties, capital investment, jobs and the economy. We never received anything to even remotely give us an indication of the impacts. My final balloon punch was that it was absolutely wrong to pass the bill out of committee without this information. It is the Resource Committee’s job and jurisdiction to study and review this, as our constitutional duty is to ensure we are managing our resources to the maximum benefit for the people of Alaska. The committee did not do that. The oil tax eager beavers couldn’t be bothered.
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» Is NEA sending out action alerts to support oil taxes? «
Maybe, maybe not. The testimony supporting the oil tax bills sure sounds like it. More than half the testifiers are tying the taxes to wanting more money for K-12 education.
They all need to go back to school and study the Laffer Curve theory. If we raise taxes on the industry, we will be at the point of negative return. Not smart.
Do they not know that taxes impact behavior? Apparently, they somehow missed that in economics class. Increase the taxes on cigarettes and people buy fewer cartons and smoke less. Increase the taxes on oil, we’ll end up with less capital investment, less oil, less revenue, fewer jobs, and a lower GDP than we would otherwise. This is basic stuff.
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» Something strange afoot with HB 69 «
As one of the eight who was on the education package negotiation team earlier in the session (2 from each majority and minority caucus in the Senate and the same from the House), I am extremely disappointed in the bill the Democrat-controlled majorities have put forward, HB 69.
Knowing what we discussed in those negotiations and where we had agreement, understanding with the other seven that for the bill to pass and be upheld, it would need certain reforms focused on student learning, and seeing the absence of those items, I believe something strange and disconcerting could be afoot.
I am beginning to think some of the key players in the majorities actually don’t want to work together to craft a bill that will pass and be upheld – that this is more about the left blaming the right for failing to support K-12 education for political purposes and for the left’s efforts to rally support for new taxes.
If the majorities truly want to get more funding to the districts, they will work with the minorities and the governor to include some commonsense policy reforms aimed to improve student learning and remove the discriminatory provisions against the public charter and correspondence students, two wonderful public school choice options.
Right now, HB 69 incentivizes low proficiency, pulls dollars from public charter schools, puts testing and reporting requirements on public correspondence students beyond those required by students at neighborhood schools, avoids prohibiting the distraction of smart phone use by students, and does not include teacher retention bonuses. The bill is in bad shape.
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» STEP right up «
I’ve been studying and considering something for several years and working on it for the past year. I wasn’t sure when I would bring it forward but based on the bad condition HB 69 is in and the lack of progress the legislature has made in addressing student outcomes since the Alaska Reads Act passed in 2022, I decided it’s time to start talking about this proposal that would be a game-changer for our K-12 education system in Alaska. The STEP Act. The Student and Teacher Excel Package is a bill I have drafted but not yet filed. Along with proficiency incentives and teacher retention bonus, the bill sets up ESAs.
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Education Scholarship Accounts
Obviously, you’d like to know what an “ESA” is. An Education Scholarship Account. Seventeen other states have ESAs or a similar mechanism that I like to call “backpack funding” – the funds follow the child. Parents could choose whether or not they’d like to set up an ESA for their child rather than send their child to the local neighborhood or charter school. My bill draft sets the amount at $7000 which is a similar amount to what other states have established.
Using the ESA funds, parents would craft a customized education package to fit their child’s learning needs and style. For example, the funds could be used for a band class at the neighborhood school, a couple courses at the correspondence school, a half day at a non-profit private school, and participation in a community sport league.
The first year, the ESAs would be available only to special needs children, followed by low-income children the next year. In year three, ESAs would be available to the children of members of the military and children of Alaskans who are first responders. All children could access ESAs in the fourth year.
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Is it constitutional?
The allowance of ESA fund use for a non-profit private school given in the above example is based on the delegate discussion at the Alaska State Constitutional Convention. The delegates made clear that public funds could be used at private schools for three items that would benefit a child (not the assets of the private entity): bus transportation, nutrition/lunches, and tuition. My bill draft references the minutes of the Constitutional Convention.
Let's STEP right up, Alaska!
Note: I should not neglect to mention that there is a lawsuit underway regarding the constitutionality of using public correspondence allotments for purchases of services at a private school. To accomplish a thorough review of this issue, the court should consider the delegates’ intent and debate when they adopted Article VII, Section 1 of the Alaska State Constitution.
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» Let’s put our bad Medicaid ratio to work «
Did you know that 1 in 3 Alaskans are on Medicaid compared to 1 in 5 nationally? Medicaid was designed for the vulnerable population in the US: impoverished elderly, disabled, and children, a population that couldn’t just run out and grab a job to make ends meet like the rest of us. Under President Obama and Alaska Governor Walker, the program was expanded to include low-income working age, able-bodied adults. The program is now not sustainable as a result, both federally and at the state level.
Here’s my idea: let’s train as many of the working age, able-bodied adults on Medicaid to help build the gasline, mine the 49 of the 50 critical minerals Alaska has, and work at Pikka, Willow and the coming Sockeye project. Train them for these good paying jobs and get them off Medicaid.
Who’s with me on this? I think it’s a marvelous idea. Yes, I’ve got details to figure out but, hey, you’ve got to start with a vision!
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» Income tax bill resurfaces yet again «
It initially snuck under my radar, but since it would impact many Alaskans, I wanted to make sure you were aware that Rep. Alyse Galvin introduced HB 152 a couple weeks ago. The bill would implement an income tax of 4% on single earners with an income over $150,000 and joint filers over $300,000. In addition, everyone would pay a flat tax of $150. The income tax is disguised as an “education tax” but because our constitution does not allow dedicated funds, the proceeds could be used to pay for anything in the state budget.
If the bill were to gain traction and pass, you can bet your bottom dollar that the threshold and rates would change over time to capture more Alaskans and more of their earnings. HB 152 is the seemingly harmless camel’s nose under the tent.
This reminds me: we really need a constitutional spending cap.
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» Too long, farewell «
Normally, it’d be “so long, farewell” but because there’s so much to share, so much you deserve to know, my commentary was admittedly too long this week. Thanks for hanging in there.
Scroll down to see pics and a super-duper press release about a timely bill I filed on your behalf considering our world situation. SB 139 will restrict our foreign adversaries from buying up land in Alaska near military installations or purchasing agricultural lands. It's a problem in the lower 48; let's prevent it from becoming a problem in Alaska. Please testify in support Friday at 3:30pm right after you testify in support of SB 128 Department of Agriculture! 844-586-9085 or Senate.Resources@akleg.gov.
Join us tonight for Facebook Live. We’ll begin airing sometime between 5:30 and 6:30pm. We hope to have a surprise guest, but you’ll have to tune in to see if it works out! (By the way, we had a great broadcast last week with Rep. DeLena Johnson and Rep. Kevin McCabe – thanks to both of them for the excellent updates and discussions!).
| | Superintent Patrick Mayer stopped by for a quick hello while in Juneau. His kids grew up in Palmer with Senator Hughes’ kids back in the day — such a small world! | | | |
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Lopsided Agenda
The main focus of the House and Senate majorities is on 8.4% of the state population to the neglect of the rest who are in the private sector.
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In Case You Missed It the First Time… | | |
Happy Report
The first Food Security Workshop in Palmer was a smashing success!
| | Senator Hughes sat down with Justin LaCross from Mat-Su. He was there representing the NEA to discuss school funding issues. | | We thought you might like to see what both the mainstream media and alternative, independent media are saying. Below are some links to recent news items. | | Senator Hughes sat in Resources last week and heard testimony on SB 130, Fisheries Prod. Development Tax Credit, and SB 135, Refund of Fish Business Tax to Munis. | | Patty Farren, principal of American Charter, stopped by my office while she was in Juneau. American Charter currently has 197 students and expects to increase enrollment once the new building is fully constructed next year. | | “We have lots of oil coming on line in the coming years and I see no reason to add a tax to Hilcorp. They came up here when BP left and are doing a good job. Let’s keep them.'” | “We already have an unfunded liability of over 7 billion owed in defined benefits. ...No one in the private sector is guaranteed this type of benefit. We just can NOT afford to go back to this. It is not sustainable.” | “Stop taking money from the PFD. It was set up for a good reason and has worked for years. Learn to budget what we have and use it wisely. Every program does NOT need more cash. It needs accountability.” | “You are a voice of reason and hope!” | “Right on about your land [bill] in Alaska! I think every Governor in each state in the lower 48 should follow your lead and introduce the same type of bill! Our land in Ohio has been brought by foreign countries as well as our steel mills! I hope your Bill passes!” | “Some research indicates that increased funding alone does not guarantee better outcomes,
but I believe the key lies in ensuring that education funding aligns with inflation, as proposed in HB 69.” | “Those running education have neglected academic education for far too long. We need educational leaders that recognize, encourage, promote, and reward academic progress and achievement.” | “Giving more money to those now running education only encourages them to do more of what has caused the failure of the system to begin with. Fixing education requires higher academic standards and expectations and a Legislature willing to enforce them.” | “Alaska’s agriculture industry is growing, and we have so much potential to do more. We need a Department of Agriculture to more quickly and fully realize the potential of the agriculture industry.” | “I feel like the state is at a breaking point. We're out of funds, and we're taxing our citizens who are low on and out of funds. How much more can we take? Please, please help us.” | “If I have to choose between name brands and generic to balance my personal spending, then the state can do the same. Trim, Baby! Trim!” | “This bill [SB 92] will be a signal that Alaska's business environment is not only uncertain, but punitive, arbitrary, and very high tax thanks to that 9.4% rate.” | “Hilcorp is the primary supplier of natural gas to Southcentral Alaska, and the imposition of this tax jeopardizes heating security for thousands of Alaskans.” | “Senate Bill 92 risks undermining the state’s natural resource sector by deterring private investment and discouraging economic growth.” | |
View some of the latest happenings in Juneau with members of the caucus. | | |
Senate Assignments:
- Health & Social Services Committee
- Resources Committee
- Alaska Food Strategy Task Force, Chair
- Food and Farm Caucus, Co-Chair
- Special Committee on World Trade
- Department of Education & Early Development Subcommittee
- Department of Environmental Conservation Subcommittee
- Department of Commerce, Community, and Economic Development Subcommittee
Other Appointments and Assignments:
- NCSL Law and Public Safety Committee, Vice Chair
- NCSL Task Force on Agriculture
- State Agricultural and Rural Leaders, National Board Member
- Article V Phoenix Correspondence Commission, National Commissioner
- NCSL AI & Cybersecurity Task Force
- CSG National Interbranch Affairs Committee
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CSG West Education and Workforce Development Committee
- WICHE Legislative Advisory Committee, Member
- Energy Council – Full Council Committee Member
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Click the bill code in green to see more details and follow the individual bill's progress online. | | This bill works to protect individuals from potential harm due to use of artificial intelligence by state entities, regulates personal data storage and collection, and use of deepfakes in political media. We have submitted a hearing request. | | This bill requires districts to assign one or more highly trained, stable and responsible individuals to conceal-carry on school grounds and coordinate with local law enforcement. Every second makes a difference. An on-site immediate response will save lives.We have submitted a hearing request. | | The bill provides an incentive for consumers to shop for healthcare. A patient who uses their insurer's price comparison tool and chooses a less than average cost provider, will receive a portion of the savings in cash back. The Act will allow free market principles to operate within our healthcare system and over time, costs will nudge downward. What a win this would be for Alaskans! The bill will be up for a third time this week on Wednesday at 1:30pm. Email your support to SLaC@akleg.gov and ask Chair Bjorkman to please move the bill out of committee! | | School/University Employee Health Insurance | The bill gives districts the option to participate in the state employee health plan, AlaskaCare. If passed, Senate Bill 5 could ease the financial burden of school districts and give the State of Alaska more leverage to negotiate with healthcare providers, improving services, and leaving more funds for classroom use. We have submitted a hearing request. We have reiterated our request. | | Election Ballot & Count Deadlines | The bill requires all ballots be received and counted after polls close on Election Day without delay. It addresses the handling of ballots delayed by weather or mechanical issues requiring secure storage and delivery once conditions improve. The bill will improve the timely reporting of election results. SB 52 had its first hearing and public testimony on February 4. We sought another hearing but the Chair and Senate Majority had other plans. They introduced a committee substitute to another election bill which did not include any of SB 52 's provisions. | | The bill creates the Alaska Sunset Commission, an independent, apolitical body responsible for conducting detailed audits of state departments on a rotating basis. The Commission will evaluate performance and costs, providing recommendations and necessary statutory changes to the legislature. To prevent a division from being eliminated and its duties defaulting to the department's commissioner, the legislature must review and act on the audit report. The bill was heard in Senate State Affairs three weeks ago. Please email your support to SSTA@akleg.gov, Sen.Scott.Kawasaki@akleg.gov and Joe.Hayes@akleg.gov. Ask Chair Kawasaki to please move the bill out of committee. | | Alaska Critical Infrastructure and Land Ownership Act | The bill was crafted to protect Alaska’s security, economic independence, and sovereignty by establishing clear, enforceable prohibitions on land ownership by citizens and entities of foreign adversarial nations near critical infrastructure, military installations, and agricultural regions. With increasing global tensions and strategic competition, this bill addresses the pressing need to safeguard Alaska’s unique assets from potential adversarial foreign influence, ensuring that our state remains a stronghold of stability, self-reliance, and security within the United States. The bill is scheduled for a hearing this Friday in the Senate Resources Committee at 3:30pm hearing request has been submitted for the first committee of referral. Please participate in public testimony by calling 844-586-9085 or emailing Senate.Resources@akleg.gov. | | For Information on bills I'm co-sponsoring | For information on all bills filed during this session | | Image courtesy Theresa Wolstad, Office of Senator Robert Myers. | | O P P O R T U N I T I E S F O R Y O U T O W E I G H I N T H I S W E E K | | |
If you’d like to provide public testimony for any bill, enter the bill number (for example "HB 22") into the search bar here to learn the date and time. Scroll down toward the bottom of this newsletter or view the highlighted bill images to find the public testimony call-in phone numbers.
Can't call in during the hearing? You can also submit your comments in written form by emailing the bill sponsor, hearing committee, and the committee's members. Committee information can be found within the listings here. Click the committee title to see its e-mail and those of each member.
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The following "News from Hughes Alerts" are highlighted bills for this week but please note that this is not an exhaustive list.
🖱️ Click on the image to view the referenced bill.
| Click the button below to see all public testimony opportunities
occurring within the next seven days. | | The 📣 indicates that the topic is slated to be accepting public testimony at its hearing. |
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MONDAY, APRIL 7, 3:30pm
SENATE EDUCATION
Consideration of Governor’s Appointees:
Professional Teaching Practices Commission: Angie Alston, Kathryn Baird, Patrick Frymark
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TUESDAY, APRIL 8, 3:30pm
SENATE STATE AFFAIRS
Consideration of Governor’s Appointees:
Alaska Police Standards Council: Daniel Carothers, David Ross, Timothy Collins
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THURSDAY, APRIL 10, 3:30pm
SENATE STATE AFFAIRS
Consideration of Governor’s Appointees:
Alaska Public Offices Commission: Walter Monegan
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FRIDAY, APRIL 11, 3:30pm
SENATE RESOURCES
Consideration of Governor’s Appointees:
Big Game Commercial Services Board: TBA
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| *Due to a change in FB policy (Feb. 2025), Live broadcasts will only be available to view for 30 days from their original air date. | | | | SMS Bill Tracking! Once you know what bill(s) you want to monitor, here’s a convenient way to track what’s happening. Text any bill number (ex: SB1) to 559-245-2529 to enroll in text alerts for that particular piece of legislation. You’ll receive an enrollment confirmation as well as instructions on how to unsubscribe. | | From Whence Cometh Our Revenue to Pay for State Government? | | Contact Alaska’s US Senators and Congressman | | |
Lisa Murkowski - Senator
Anchorage: 907-271-3735
Mat-Su: 907-376-7665
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Dan Sullivan - Senator
Anchorage: 907-271-5915
Mat-Su: 907-357-9956
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Nick Begich - Representative
Anchorage: 907-921-6675
| | You can watch senate floor sessions, typically Mondays and Wednesdays at 11:00 am
and Fridays at 10:30 am online or on your local 360North television channel. | | Follow and connect via social media platforms, web, and e-mail. | | Copyright ©2025 Office of Senator Shelley Hughes, All rights reserved. | | | | |
