Municipal lobbyist: Juneau budget choices likely to limit PFD; tapping CVR seen as difficult

Wendy Chamberlain, the municipality's state lobbyist, updated the Assembly Legislative Committee on the Alaska budget outlook in Juneau on Feb. 13, 2025, saying lawmakers face difficult tradeoffs that could limit the Permanent Fund Dividend to about $1,000 unless new revenue sources are found.

Chamberlain told the committee that "Both sides, particularly the Senate, has said we will not tap the CVR. We absolutely will not do it." She summarized staff budget work and said analysts recommend keeping a large balance in the CVR for disaster readiness.

Why it matters: Decisions in Juneau on the biennial operating budget, the amount transferred to the Budget Stabilization Account (BSA), and whether to use constitutional reserve funds will influence how much state support local governments receive and the size of the PFD distributed to Alaska residents.

Chamberlain gave specific figures the committee could use to understand tradeoffs. She said roughly $3,000,000,000 remains in the CVR and that some analysts recommend holding about $2,500,000,000 for disaster response. She explained that, under a near-status-quo operating budget, adding about $182,000,000 to the BSA would hold school district funding near current levels (the current comparable figure discussed was $175,000,000). Under those assumptions, she said, the PFD could be about $1,000 and capital projects would be minimal unless the legislature either taps the CVR or enacts new revenue measures.

Chamberlain also described revenue options under consideration in Juneau, including a tax on S corporations (referred to in the briefing as "S corp" taxes), a change to the per-barrel tax for oil producers (she referenced a "$3 per barrel" tax), or other revenue streams. She said a statewide sales tax had been mentioned by the governor but had not been formally proposed.

On energy and supply issues, Chamberlain reported that Hillcorp is negotiating to buy the Marathon facility and that the transaction price discussed in hearings was "somewhere in the hundred to a hundred and fifty million" dollars. She said if that acquisition proceeds it could affect supply planning and import options the state is evaluating.

Chamberlain said legislators and OMB budget staff are moving quickly and that specifics remain fluid. She concluded by noting the municipality is coordinating with legislative services and the mayor's office and will share written budget-comparison materials with committee members.

The committee did not take a formal vote on any municipal position during the briefing; members asked clarifying questions and the lobbyist said she would remain available for follow-up.

Next steps: Assembly staff will continue to distribute summary materials and track proposed budget and tax measures during the session, including during the Alaska Municipal League winter conference in Juneau next week.