Money for local projects, $3,200 for residents and new rules governing Alaska’s alcohol laws all crossed the finish line at Alaska Legislature’s regular session this year. The body adjourned sine die on May 18, closing out the two-year legislative process.

Lawmakers approved what they’ve called a “turducken” budget through which Alaska’s capital budget was approved within the state’s operating budget.

The state budget includes almost $60 million for Alaska’s juvenile justice system, including about $2.23 million for the Kenai Peninsula Youth Facility. It also includes $841.4 million for the University of Alaska System, including $16.3 million for Kenai Peninsula College.

Listed among the grants for municipalities section of the budget is $6.5 million for Kenai Bluff Erosion, which the City of Kenai has said it plans to use to cover their local match for the project. Rolled into an omnibus education bill was a $30 per student increase to Alaska’s Base Student Allocation, which falls short of what leaders at the Kenai Peninsula Borough School District had hoped for.

Sen. Peter Micciche, R-Soldotna, said in January that his biggest priority heading into the session would be a long-term fiscal plan for the state. Such a plan, Micciche said, would include a state spending limit and a statutory 50-50 Alaska Permanent Fund dividend, which he said would end the state’s annual fight over payments.

“The number one obstacle (to) Alaska moving forward together and realizing our ultimate destiny and potential remains the lack of a sustainable fiscal plan,” Micciche said. “I’ve had discussions with the governor and key members of the House about working offline to possibly still solve that issue this year.”

Micciche announced last week that he will not seek reelection this fall after serving in the Alaska Legislature for 10 years, saying he wants to spend more time with his family. In the time he’s spent as a state lawmaker, Micciche has served on every Senate standing committee, special committee and finance subcommittee.

Candidates currently vying to represent the central and northern peninsula in the Alaska State Senate include Gov. Mike Dunleavy’s former chief of staff Tuckerman Babcock, and Kenai Peninsula Borough Assembly member Jesse Bjorkman, who is also a teacher at Nikiski Middle/High School.

PFD

Included in the budget are payments of roughly $3,200 for Alaskans, including dividend payments of roughly $2,600, plus a one-time energy relief payment of $650.

That figure came after disagreements between the House and Senate and will depend on how many residents applied for a PFD this year.

Micciche said that even though the PFD isn’t as big as the Senate had hoped — senators initially proposed a $5,500 payment — it’s still the largest ever paid out.

“We felt that it was a difficult year across the board for Alaskans with the price of energy and inflation issues and just some of the supply chain issues we’re seeing,” Micciche said. “We thought if there was a right year for statutory or larger PFD, this was the year so that’s really our only disappointment.”

As reported by the Alaska Beacon, this year’s PFD vote came down to the wire, with the final payment amount approved at almost 11 p.m. on the last day of the session.

As recently as mid-March, Dunleavy urged lawmakers to approve a $3,700 PFD citing a projected multibillion dollar surplus in state funding. Dunleavy in a May 19 release said that while the PFD is not statutory, $3,200 should “assist significantly with battling high rates of inflation.”

“Once again, I thank those legislators who prioritized Alaskan’s needs over everything else,” Dunleavy is quoted as saying in the release. “Our families are experiencing runaway inflation, soaring fuel prices and economic fallout — they are trying to budget accordingly.”

Education

The Kenai Peninsula Borough School District had its eyes on several pieces of legislation considered by lawmakers this session, some which passed and others which didn’t.

KPBSD Superintendent Clayton Holland called the $30 increase to the base student allocation a “step in the right direction,” but said he was “disappointed” the two bills didn’t go through as-is. Beginning in fiscal year 2024, which begins on July 1, 2023, and ends on June 30, 2024, the district would get about $500,000 through the $30 BSA increase.

The increase to the BSA also impacts the funding the Kenai Peninsula Borough contributes to the school district. The school district receives the bulk of its annual funding from the State of Alaska, the Kenai Peninsula Borough and from other sources like federal e-rate and interest earnings.

Each fiscal year, the borough is bound by a minimum and maximum level at which it can fund the school district. The minimum amount is what the State of Alaska requires the borough to contribute, while the maximum amount serves as an “up to” amount. The BSA increase approved by lawmakers this year will bump up the borough’s minimum and maximum contribution amounts beginning in fiscal year 2024.

The BSA increase is on top of $57 million in one-time funding the Legislature approved for Alaska’s schools this session. Of that, Holland said the Kenai Peninsula Borough expects to receive about $3.4 million in one-time funding.

“It’s not something we can plan for two years out on or anything like that,” Holland said.

Policy expanding Alaska’s pre-K programming, referred to as early education, also passed as part of the conglomerate education bill. Holland said the district is still working out exactly what the language means for KPBSD, but that there’s the potential to enhance programs the district already offers through federal Title I benefits.

Holland said that, overall, he feels optimistic about the traction issues important to KPBSD garnered this year, such as efforts to improve Alaska’s retirement system for teachers. The Legislature also this session made it easier for people to become teachers, with the goal of addressing statewide staffing shortages.

Capital projects

Multiple Kenai Peninsula capital priorities are included in the budget passed this year, including the Kenai Bluff Stabilization Project and money for the Silvertip Highway Maintenance Station, located near the Hope Junction on the Seward Highway, Micciche said.

As initially proposed by Dunleavy, the budget passed by lawmakers includes $6.5 million for the Kenai Bluff Stabilization Project. That project, which has been in the works for decades, aims to stabilize roughly 5,000 feet of bluff on the north shore of the Kenai River, starting from the mouth of the river and ending near Pacific Star Seafoods.

The project was identified as the City of Kenai’s top capital priority earlier this year and has an estimated total cost of $42 million, although Kenai City Manager Paul Ostrander has said he expects that total to be much lower. The cost will be split between the federal government, which will pay 65%, and the City of Kenai, which will pay 35%.

Using a projected total project cost of $35 million, the City of Kenai would contribute about $2.55 million to the project. Republican U.S. Sen. Lisa Murkowski secured $28 million for the project through the federal Infrastructure Investment and Jobs Act.

The budget also includes money for safety improvements to the Sterling Highway, including at the intersection of the Sterling and Seward highways and rehabilitation work near Moose Pass, according to the legislation.

Still, all legislation approved by lawmakers is subject to approval by Dunleavy, who has veto power. Micciche said last week that there are “some opportunities” in the budget for Dunleavy to veto. He said he’s met with the governor about a few of those opportunities, which would save “a few hundred million dollars” and aren’t specific to a project or department.

“I would expect that, because of the teamwork — working hand in hand with the House and the governor at the end — that the vast majority of what’s in the turducken — the capital budget inside of the operating budget — will remain intact,” Micciche said.

S.B. 9

Micciche successfully passed a long-awaited alcohol reform bill, which he sponsored. The bill, almost a decade in the making, overhauls Title 4 of Alaska State Statute, which governs the Alcoholic Beverage Control Board. Micciche estimates that the bill as passed by lawmakers is the product of more than 16,000 hours of work and more than 100 stakeholders, Micciche has estimated.

A key focus of the bill is the consolidation of Alaska’s existing licensing and permitting regulations. It creates several new retail license types, such as for breweries, wineries and distilleries, and allows those businesses to stay open later.

Doug Hogue, who owns Kenai River Brewing Co., said Saturday that he was excited to see the bill pass. He said he’s been active in providing input on the bill as it worked its way through the Legislature each year, including working with the Brewers Guild of Alaska, a nonprofit trade association that promotes the craft beer and wine industry.

“We’re super excited about it,” Hogue said of S.B. 9’s passage.

He said a key change made possible under the legislation is that Kenai River Brewing will be able to purchase a restaurant and eating place license, instead of just a taproom license. Under a restaurant license, Hogue said Kenai River Brewing could, among other things, stay open later, offer live music and have “guest taps” from brewers around Alaska.

“It would be pretty awesome,” Hogue said.

The legislation doesn’t take effect until 2024, which Hogue said gives Kenai River Brewing time to plan how they’d like to expand. He said the big push will be their outside area, where he’d like to see more covered seating and maybe a stage or outdoor kitchen.

“I don’t mind that far off,” Hogue said. “It gives us time to plan and do everything right.”

Micciche said that, while no bill is perfect, S.B. 9 got to the point where everyone could shake hands and agree to the path forward. While minor changes to specific parts of the language could be needed in the future, Micciche said the bill is a solution to Alaska’s collection of “hodgepodge” and “one-off statutes.”

Dunleavy has already said that special legislative sessions will not be needed because lawmakers delivered a budget that is “fully functional,” as reported by the Juneau Empire. The Legislature last year convened for four special sessions before the budget was completed.

Information about individual bills and the 32nd Alaska Legislature can be found on akleg.gov.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.