Juneau lawmakers warn of tight state budget; prioritize education, housing and flood relief

Juneau City and Borough Assembly members heard an overview of this year’s state and federal priorities on Jan. 23 as state legislators and the city’s lobbyists described a smaller legislative budget picture and said they will press for education, housing and flood relief funding.

Sen. Jesse Kiel, addressing the assembly, said the Senate majority is bipartisan and that the state faces a larger budget gap than last year. “The revenue picture ain’t as pretty this year as it was last year,” Kiel said, adding that the governor’s December budget shows about $1.5 billion in red ink and that actual supplemental needs likely push toward $1.7 billion.

The funding outlook matters for local priorities the delegation raised: long-term mitigation of glacial lake outburst flooding at the Mendenhall area; housing projects and infrastructure; education funding; and targeted disaster-relief supplemental requests. “We’re gonna be advocating for both more money into the statewide fund as well as specific disaster responses in my community,” Kiel said about the state disaster fund and requests tied to Juneau.

Rep. Andy Story, who told the assembly he is co-chairing the House education committee this year, said the House will take up an education-funding bill next week. “We are starting out full speed ahead,” Story said, listing foundation funding and pensions as legislative priorities.

Rep. Sarah Hannon said education was a top concern for constituents and for both legislative majorities. Hannon and others urged durable increases to the state’s education formula to stabilize school funding.

Child care also drew discussion. Kiel described a statewide program that provided roughly $7.5 million in additional assistance to child-care providers and said Juneau providers received about 4.6% of that statewide funding. He said the legislature is also watching a corporate income tax incentive included in last year’s legislation, which is currently the subject of litigation over a single-subject rule; the legislature may reintroduce elements of that law to preserve incentives if the court challenges stand.

Housing and capital projects drew sustained attention. Assembly members asked whether the Alaska Housing Finance Corporation (AHFC) or other state entities could provide a steady funding stream for housing programs. Lawmakers and staff described a range of possible mechanisms — including using returned AHFC funds, state low-cost lending, or Industrial Development and Export Authority financing — but said there is no consensus in the legislature yet. Senator Kiel and representatives said some state vetoes last year reduced the dollars available for local projects; they also noted about $40 million in statewide support for new housing builds enacted the prior year.

The assembly also heard federal-advocacy updates. Katie Katchell, the city’s federal lobbyist, and Kevin Jardell, the state lobbyist, said the congressional delegation had inserted language in the federal disaster supplemental that directed an Army Corps of Engineers study on glacial-lake outburst flooding and helped speed technical assistance deployments. “Getting Army Corps here immediately with technical assistance” was an early success, Katchell told the assembly. City staff and lobbyists said follow‑up will be required to ensure the Army Corps’ work plan and subsequent allocations reflect congressional intent and local needs.

Assembly staff briefed members on the city’s draft legislative and federal priorities list. City staff recommended the assembly submit up to five federal priorities this cycle, focusing on short‑term Mendenhall mitigation (Hesco barrier work), long‑term Mendenhall mitigation, wastewater treatment, and a resubmission of a previously requested wave attenuator project. City staff noted vertical construction (for example, new housing or civic‑center buildings) is generally the hardest category to match to federal funding buckets.

Other topics raised during the delegation visit included commercial fisheries and seafood marketing support, the moratorium on new school bond debt and its possible expiration, retrofitting existing housing stock, and the Marine Highway and airport funding outlook. Lawmakers said the overall capital budget will likely be thin this year and that the permanent fund draw and oil-price forecasts remain major budget drivers.

Assembly members and staff asked lawmakers and lobbyists for help in moving specific Juneau projects, and lobbyists encouraged members to coordinate with the delegation before making external advocacy moves so the city’s requests align with available federal and state funding opportunities.

The assembly did not take votes on policy items during the delegation session. Lawmakers urged continued local engagement as the session progresses and said many outcomes will depend on upcoming supplemental requests, the governor’s actions and federal appropriations.