School funding, energy and ranked choice voting: Alaska statewide political

There’s no shortage of challenging questions facing Alaska state officials in the coming year, like how to keep critical offices fully staffed, how to fill a looming shortfall in natural gas supply to large parts of the state, or how to pay for critical services while contending with dwindling oil revenue.

But election years also mean tough decisions are even harder to make for Alaska’s lawmakers — 50 of whom will be up for reelection in 2024. Lawmakers know that their votes on controversial bills, like ones reshaping Alaska’s Permanent Fund dividend or introducing new taxes, can be used against them by political opponents once campaign season kicks in. And with a bipartisan coalition in the Senate consistently at odds with a Republican-dominated majority in the House, 2024 legislative races could have significant implications for the future balance of power.

”We’re now in an election year. I don’t know how much momentum is going to occur this year,” Republican Gov. Mike Dunleavy said in December when asked about a sales tax proposal he promised earlier in 2023 but never delivered. A lack of momentum could stall progress on a lot of the tough issues facing the state, but that doesn’t make them any less urgent.

Here are a few of the top statewide political stories to follow in the months to come.

School funding

2023 was the year when Alaska educators’ calls for an increase to public school funding reached a new pitch. The funding formula hasn’t changed significantly since 2017. In hearing after hearing, they spoke about the impacts of leaving the funding formula as-is, including bigger class sizes, fewer counselors, closed swimming pools, and shut-down enrichment programs.

The bipartisan Senate majority passed a bill in the 2023 session to increase the Base Student Allocation, or BSA, by more than 10%, from $5,960 to $6,640. The boost would have amounted to an estimated $175 million increase to the state’s education budget.

When the Republican-dominated House majority couldn’t agree to the Senate plan, the chambers compromised by putting the funding outside the formula, making it a one-time appropriation. Dunleavy then vetoed half that funding — leaving more than $87 million outside of this year’s budget.

[Alaska education commissioner says she no longer supports boost to school funding formula]

Alaskans can expect this issue to come roaring back when lawmakers reconvene in 2024. Educators say that with federal pandemic relief exhausted, a boost to the state’s formula is all the more necessary. Opponents of the boost — which include current House Education Committee Co-Chair Jamie Allard, R-Eagle River — have called instead for more state funding to go toward home-schooled kids.

Dunleavy’s budget draft — released in mid-December — didn’t include a formula change, but the Senate majority has already signaled that it would remain a priority for them. Whether enough House members agree will be the pivotal question. The 2023 legislative session ended with the House majority in disarray, and its Republican leaders promising to look inward for a clearer set of priorities. Education policy will likely be a barometer of their efforts.

PFD uncertainty

Dunleavy’s Permanent Fund dividend proposal would give out more than $3,000 to every eligible Alaskan, and leave the state insolvent within two years, by his own administration’s calculation.

The statute that Dunleavy used for his calculation has not been followed since 2016, but legislators have yet to agree on a long-term solution. Election years invariably make it difficult for lawmakers to agree on politically difficult topics, and disagreements on the issue are again likely in the legislative session and subsequent campaigns.

The bipartisan Senate majority passed a 75-25 dividend formula bill in May, which would use three-quarters of annual investment earnings from the Permanent Fund for state services and one quarter for the dividend. The size of the dividend — at roughly $1,300 in 2023 — could increase, but only with substantial new state revenue measures.

[One year and $250,000 later, Alaska’s new spending database has not been launched]

The Republican-led House indicated support for a formula that would result in a dividend twice the size of the Senate’s. The House formula would be more affordable than the current statute, but still leave the state unable to increase its spending on services like education and on track to run out of savings within a few years.

A House fiscal plan had a new PFD formula, a tighter legislative spending cap and a state sales tax combined with a corporate income tax…