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Lawmakers overrode the governor's veto of an education funding bill this week.

It's the first time since 2009 that a veto override vote was successful.

And so, by a vote of 46 yeas to 14 nays, the joint legislative session has overridden the governor's veto of House Bill 57.

What else did legislators accomplish this year with the budget, the PFD and more?

We'll ask right now when lawmakers join us for Alaska Insight.

Good evening, and thanks for joining us for the final episode of this season of Alaska Insight.

Tonight, legislators join us to discuss what they were able to accomplish during the session that just concluded and what bills were left on the table that they will consider next year.

Before we get to that discussion, here are some of the top stories of the week from Alaska Public Media's collaborative statewide news network, without a single vote to spare.

The US House passed a mega bill on Thursday containing a number of national Republican priorities.

The bill cuts nearly $100 billion from Medicaid, and Snap also called food stamps, shifting many of those costs to the states.

In Alaska, the bill would put the state on the hook for more than $60 million in Snap benefits, while also cutting around 6 million in federal funds used to administer the program.

Health researchers say a work requirement to qualify for Medicaid could cause as many as 14,000 Alaskans to lose their health care coverage.

Alaska's only representative, Republican Nick baggage, voted yes on the bill.

In an interview Thursday, he praised the tax cuts as well as a section promoting oil development in the Arctic National Wildlife Refuge.

The bill goes next to the Senate, where it could pass with just Republican votes.

However, several Republican senators have already said they don't like the bill.

A grand jury on Tuesday indicted 44 year old criminal defense attorney Justin Facey on charges alleging he was involved with the distribution and use of controlled substances like fentanyl out of his Anchorage home.

Along with two other charges related to having firearms connected with drug trafficking and use, a memorandum filed by prosecutors on Wednesday alleges that Facey described himself as a cartel attorney working with a gang that smuggled hard drugs from Mexico to Alaska.

The memorandum accuses Facey of helping the gang to launder money and offering to smuggle a drug trafficker out of Alaska after they had nearly been arrested.

It also alleges that Facey was using up to an ounce of methamphetamine a day.

Alaska lawmakers on Tuesday voted to override governor Mike Dunleavy veto of House Bill 57, which aims to increase per student education funding in the state while also implementing a number of policy changes.

It's the third time in two years that legislators have passed a bill increasing the base student allocation.

But the first time one has successfully overcome a veto from Dunleavy.

It's the first substantial increase to the education funding formula since 2017.

It's also the first time the Alaska Legislature has overridden a governor's veto since 2009.

11 minority Republicans joined the members of the bipartisan in House and Senate coalitions to vote for the override.

In a social media post Tuesday.

The governor said the bill's policy reforms did not go far enough.

You can find the full version of these and many more stories on our website.

Alaska public.org, or download the Alaska Public Media app on your phone.

Now onto our discussion about the work done in the legislative session that just ended.

Besides an increase in school funding, lawmakers were able to pass a budget approved legislation to raise new tax revenue and more.

They got their work done with a day to spare in the first session of the 34th legislature.

But it was not without tension.

Most of that tension was between the bipartisan coalition and governor Mike Dunleavy.

The governor was adamant about certain elements related to education spending that he insisted were must haves.

And he expressed frustration at a press conference that negotiations were not successful.

But lawmakers said they were frustrated by a lack of engagement with the state's top executive.

When speaking to reporters on Tu A number of those things that were left out, for example, were, teacher incentive pay, which we had in the bill last year, a robust approach to charter schools, which you would have an author, alternative authorizers to authorize our charter schools, support for homeschooling.

A lot of this was left out in order to try and negotiate something this year.

We started off in a negotiation process early in January to try and come to a conclusion.

Obviously that didn't work.

It seems to me I mean, I don't want to complain too much about the governor, but he's just not been available.

He's not here.

You know that better than I do.

You probably haven't had a chance to talk to the governor is not available, and neither has his staff.

Joining me tonight to discuss the work that was completed and what will be in front of lawmakers next January is Senate Majority Leader Anchorage Republican Cathy Geisel and Speaker of the House Dillingham Independent Bryce Edgmon.

Welcome, both of you.

Thanks so much for being here with us.

Thanks, Lori.

Yes, I used to be here.

I know that Senator Stevens was referencing, the Fiscal Policy working group that the governor had wanted, but also a bit of general frustration about a lack of of engagement.

The video we just saw paints a very divergent picture about negotiations during the Senate this session.

The governor said he'd tried to negotiate earlier, and Senator Stevens said the governor was not available.

Where did those talks break down?

Senator, do you want to start us off here?

You know, Lori, the governor designated staff to negotiate with us.

And, the staff actually were were good to work with.

The problem came when, the governor didn't agree with what had been negotiated through his staff.

So.

So that's that's really what, Senator Stevens, president, Senator Stevens was, was was getting out there.

We actually need the governor himself to be in the room and to agree to meet with us and talk through these hard issues.

Yes.

Thank you.

Representative Edgmon, your thoughts about trying to work with the governor during this session?

Yeah.

I would echo what, Majority Leader just mentioned.

It's really hard to work with a governor who's not physically present in the building and who, you know, over the years.

Governor Dunleavy style is, I think, starkly different than the previous governor's I've worked with as a legislator, going back to the days of Sarah Palin, Sean Parnell, Bill Walker, you know, and Governor Donnelly being its seventh year Governor Dunleavy, focuses less, I think, on of sort of personal relationships with legislators and works more comfortably with, you know, more conservative legislators who are apt to be more supportive of him.

And I, you know, I think the whole education fight that we've been in really goes back to last year and even before, because in in calendar year 2024, we had an omnibus bill that was very controversial, two and came one vote shy of being overridden.

That was again last year.

This year, the 46 to 14 vote, I think, spoke volumes to a lot of things frustration, working with the governor, the fact that to his view, his world view of Alaska and the, you know, the state of, public education is vastly different than most of us.

And at the end of the day, we're coming together in a very bipartisan manner of Democrats, Republicans and independents to put together a very, almost unprecedented, you know, overriding of the governor really spoke volumes about the the extent of things.

Sticking with you a moment, representative House Bill 57, as we know, increase the base student allocation, the BSA, by $700.

It bans cell phones in school, changed how charter schools can be created.

School officials were hoping for at least a $1,000 BSA.

And one district superintendent said with inflation, the increase needed to be nearly $1,800.

How much have school leaders said this will help, and do you anticipate considering another increase next session or will that be it for the foreseeable future?

Well, at this point, superintendents, school boards and other education educators are willing to take whatever we give them.

You know, something is better than nothing.

And of course, we started our debate in January with, you know, an $1,800 BSA with some inflation adjusters attached to it.

We brought that down to $1,000.

It hovered around 680 until in the end, we finally agreed that $700 was, you know, sort of the number that best met the the fiscal realities in an era when oil prices were declining.

So, you know, next year, I think it's pretty unanimously felt, at least here in the Capitol at this point, that the fiscal environment is going to be more challenging.

The needs aren't going to go away.

And we really don't know what's happening back east.

But I'll close by just saying that the state of our public school systems in Alaska is very dire at this point.

They need a relief.

And, you know, they also need help.

You know, the policy end of things, which we view as a longer term, effort as opposed to a shorter term.

Senator diesel, the governor wanted teacher retention bonuses, 5000 for urban teachers, 10 to 15,000 for rural, saying teacher retention would be higher if they were getting an annual bonus.

What's your response?

What do you hear from districts and teachers about why they leave?

You know, Lori, it's a mixed message.

Sometimes.

One of the common themes is that our teachers in Alaska have no Social security as a safety net at retirement.

They also don't have a secure pension.

That's a factor.

We've always had long term teachers, not just in rural Alaska, but in urban Alaska.

But that's changed over the last approximately ten years, as we've seen more and more turnover happening because of of that particular issue.

Now, the the salary itself.

Absolutely.

Yes.

The governor proposed, a hiring bonus, so to speak, in rural Alaska would be $15,000.

And it would be for three years.

Right.

So at the end of that time when that bonus was up, we have a lot of, international teachers now, a lot of teachers from the Philippines who are doing a fantastic job in our rural schools.

But those, teachers now can let live or, excuse me, leave with $45,000 after three years, and we're still not retaining them.

And yet, the community in a small community, the the personal relationships, the knowing individual, knowing the teachers, knowing the students, that relationship is key to the trust that small relationships, that small communities have with their teachers.

That's a critical piece.

That's why retention is so critical, and that's why return learning to a modernized, very constrained, but still, livable retirement program is so important.

You know, the other thing I would add related to the BSA, one positive is that that's $700, even though it's only $20 per student more than last year is in the formula.

It will go forward.

And that's that's a strong positive for the legislation that we were able to pass.

Sticking with you, Senator, lawmakers overcame the governor's veto of the education bill, but he could decide to veto line items like that BSA increase that would take more votes to override.

How concerned are you that he might do that in June?

And do you think you could muster the votes then to override it?

Well, we absolutely are aware he could do that in June.

You know, it was such a strong vote to override the governor on this policy bill, that I think there is a strong likelihood that we would have the three quarter vote it would take to override the appropriation veto.

An appropriation veto is a higher bar.

It's two thirds for a policy override, which is what we achieved.

So I'm I'm guardedly optimistic that we could override, a red pen running through that $700 BSA and representative Edmund, your, thoughts about that?

Do you think you could get folks back together?

And how quickly could that happen if, the governor did decide to veto in June?

Well, that's a great question.

Number one, if he did veto the appropriation, sort of, underlying, the base two allocation that we we put into law with the override, he would essentially be, you know, denying the force of the law, breaking the law.

Number one.

Number two, if he does it, I think it's going to change the political dynamic in a way that, that, will certainly gather his it, grab his attention.

Like Senator Chris was just saying a moment ago, the likelihood in January of getting to that 45 vote threshold of 60 member legislature, I think is very real, and it will be quite, you know, automatic for that to happen.

And, and I think the table is set for us to, to all come together in January.

But if the governor did that in June and you were able to override that veto, how would that affect school districts?

Would it be too late by then?

If it's in the middle of the school year and you're doing this in January?

Well, it's my understanding that school districts get their funding from the state in two different tranches.

In the second tranche is would be in the second part of the fiscal year, which would coincide with the opening of that, that the upcoming session.

So I think it's still been very material that we would override and, sort of force the governor's hand in terms of applying that or, you know, funding the entire $700, BSA amount, which, by the way, we have budgeted for in the budget that we're currently in the process of about to send him, where he has 20 days to take action on.

Representative, I want to stay with you for a moment.

One bill aimed at collecting new taxes was passed.

Tax would be collected from out-of-state companies selling to Alaskans online.

The governor said there was a game being played with the online tax concept because it was tied to school funding.

Has he clarified what he meant by a game being played?

Yeah.

I don't know what he means by that because, you know, education policy is is usually complicated.

It takes, in many occasions, two years, the full session, to sort of move through the committee process and to get consensus built and so forth.

And we did the best we could this past session on a lot of, topics that, you know, we, ordinarily would take a lot more time to, to do that in, in the bill, House Bill 57 that, we overrode him on.

There's a provision in there that calls for the formation of a task force that looks at a lot more longer term issues that, you know, that will take into consideration what the governor, is wanting.

But I found it really interesting that the governor was prioritizing some issues, like open enrollment and among a few others that really weren't a strong focus of the school districts.

They were a strong focus of the governor's desire and the Commissioner of education's, sort of leanings, but they certainly weren't being espoused by the broader education community.

So, you know, to put all of that, up against the funding that the school districts so badly need to me was a real head scratcher.

Thank you, Senator Gesell.

The governor said earlier this week that he isn't interested in signing tax bills until lawmakers have a comprehensive future fiscal plan.

How do you respond to that?

Should it be an all encompassing omnibus type fiscal bill or bringing new revenue in as plans develop, like the stalled oil tax credit reduction bill?

Lori.

Lori, I want to go back to your comment to the that the governor made about he he didn't like games being played.

There's no game here.

The fact of the matter is, Alaska does not have enough revenue to meet its core values, its core, services right now, Alaskans need to know that oil no longer pays the bills.

60% of our unrestricted general fund this year, 83.

$8 billion, came from the earnings of the permanent fund.

We have now flipped to those days back in 1976, when Alaskans, I being one of them, voted to create the permanent fund making oil revenue, actually grow for us.

So now we're depending on the earnings of that fund.

Oil is not paying the bills.

So you asked about, about new revenue.

Absolutely.

And the bill that funds, education, you're referring to a revenue bill that would put a tax on out-of-state corporations that sell internet across, into Alaska.

That make internet sales.

This would not tax Alaskans.

It taxes those corporations that are located in other states.

This would bring in revenue that helps fund education, prisons, public safety, roads.

We have to find new sources of revenue.

The Senate has proposed three potential.

One of them is Senate Bill 113, which we just referred to related to education.

Another one would, would remove a loophole related to corporate taxes and would include s corporations with our C corporations so that there was equity with our oil companies in terms of the taxes they pay.

The governor is asking for a full fiscal plan.

That's what we're aiming for.

We have tried to have this conversation with him.

He is not interested.

The proposals that we've made were actually recommended by his revenue commissioner in 2021.

Lori, the other thing we need to correct for Texas, that permanent fund itself.

We need to turn that fund into an actual endowment and create a spending limit on the earnings of that fund.

That would take a constitutional amendment.

We have a resolution to do that.

We weren't able to get that completed this year.

We're looking hopefully to do that next year.

It's one of the pieces of legislation that we need to keep working on.

In our second session, and related to the permanent Fund, the dividend was set at $1,000, the lowest adjusted for inflation in the history of the payouts from the fund.

Talk about how you were able to get consensus on something that we know is the third rail of Alaska politics, and that many Alaskans have come to depend on.

Lori, it's absolutely true that there is a portion of our population that counts on that dividend to pay bills, for heating, for rent, for food.

There's also a significant portion of our, our population that doesn't depend on it.

And said to us, spend some of that dividend, we were actually able to move about $200 million into, education because of constraining that dividend from the $1,400 we had last year to every man, woman and child to the thousand dollars this year.

Lori, we are at a time of having to make those hard choices.

We've checked all the cushions in the couch.

We've pulled all the change, all the change out.

We've made one time movements of money we will not be able to duplicate again to pay the bills.

This year.

Next year is going to be even tighter.

So Lori, that's another reason that we need to protect that permanent fund because otherwise we will not be able to fund a dividend at all in the future.

The permanent fund, statutes, the constitutional amendment needs to be passed to protect that fund, create a spending limit and create secure revenue going forward.

Thank you, Representative Eggman.

The governor says he wants a fiscal plan.

What do you think he means?

After offering a budget with a huge deficit and no new revenue plans, you said on Tuesday that unless the governor gets involved and make some hard choices, this could all be for naught.

What do you want to see from him in this regard?

I want to see some action, and I also want to see him put some political capital, some skin into the game, and really get involved in a meaningful way that helps sort of, allay the concerns that a lot of us have had that, we've heard this story before, and, you know, we've seen the governor on the cusp of introducing a sales tax a couple of years ago.

Before that, he was talking about, the lottery system with maybe a lottery tax, and so forth.

But nothing really has transpired from, from that point forward.

And, you know, I've been around long enough as a legislator to know that in order to take on big structural problems like, you know, putting a spending cap in a place or coming up with a statewide revenue source, whatever it might be, you know, everyone has to be all in.

We need to the executive branch with his state agencies to do the four mentioned analysis.

We certainly need the legislature to have skin in the game, and we need the business community.

And, you know, we need, communities around the state to be part of that because it all involves political risk to to make tough choices.

And absent the, the executive branch, who has the biggest bully pulpit, the loudest bullhorn being involved, and really telling us in the legislature, I'm going to veto any revenue measure, big or small, that you put on my desk.

Really?

Constraints, from the get go or the ability to have the conversation.

So if he is really serious, I want to see some skin in the game from him, and I want to see some action.

Well, let's talk about that for a moment more.

Senator Geisel talked about a constitutional amendment.

The governor always pushes for a so-called full PhD.

This year it would have been nearly $4,000.

Lawmakers have the appropriation power for that annual payment.

Do you see a path to changing how the PFD is calculated to take the heat out of this annual debate?

It's not going to happen.

I will tell you that without, involvement and a real commitment of, again, applying political capital by the governor, it just simply isn't going to happen.

And I was, you know, looking at preparation for this conversation tonight, I was looking back a few years ago, and since 2015, we've had 16 special sessions.

16 a lot of those have been, you know, sort of, because of fights over the size of the PFD or the inability to get, a three quarters vote to tap into our constitutional budget reserve or largest savings account.

But, you know, it's very difficult to to put, this big pieces into place and everybody has to be involved.

Well, thank you so much to both of you.

This time went by too quickly.

I really appreciate your time tonight.

Lawmakers, along with all Alaskans, now wait to see if the governor will sign the bills they pass this session or veto them or specific budget items within them.

As you heard from lawmakers tonight, Alaska's fiscal constraints mean tough decisions will likely have to continue to be made to ensure that permanent fund earnings, now contributing more than half of the revenue for the annual state budget, are protected into the future.

That's it for this edition of Alaska Insight, visit our website.

Alaska public.org for breaking news and reports from our partner stations across the state.

While you're there, sign up for our free daily digest so you won't miss any of Alaska's top stories of the day.

Thanks for joining us this evening for our final episode of season eight of Alaska Insight.

We'll be back next fall with a new lineup of programs.

Thanks for your continuing interest and ideas.

I'm Lori Townsend.

Good night and have a great summer.