Borough lobbyist says spring forecast and lease sale could ease pressure on Alaska budget; AKLNG, local school funding remain uncertain

Yuri Morgan, the Fairbanks North Star Borough’s lobbyist with Morgan Partnership, LLC, told the Assembly Committee of the Whole on March 19 that the state’s spring revenue forecast and a recent lease sale in the National Petroleum Reserve–Alaska have created the potential for a sizeable near-term increase in state revenues.

“The updated forecast projects an additional 540 odd million dollars for the current fiscal year and then an additional 500,000,000 or so for the next fiscal year,” Morgan said, and he added the NPRA lease sale could yield “another 160,000,000 or so,” funds expected to be paid to the state between now and September. Morgan cautioned that the gains derive largely from current oil-futures prices and remain volatile.

Why it matters: a sudden revenue uptick could reduce pressure to draw from the Constitutional Budget Reserve (CBR) and give lawmakers options such as adding to capital budgets, repaying past CBR draws or enlarging the Permanent Fund Dividend debate. Morgan said House Bill 289, a fast-track supplemental introduced earlier in the session, passed the House without the three-quarter vote required to use the CBR and is now in conference committee after changes in the Senate.

Morgan also outlined pieces of the governor’s broader revenue package and other tax measures under discussion, including a corporate apportionment change aimed at market-based sourcing to capture digital-economy income and a smaller education-related tax proposal. On the AKLNG project, he said the governor’s expected bill may replace the current 20-mil property tax treatment for oil-and-gas property with a volumetric throughput tax and that Senate proposals include expanded oversight of the Alaska Gasline Development Corporation and limits on confidentiality provisions.

Assemblymembers pressed Morgan on education funding. Assemblymember Guttenberg asked about efforts to increase the Base Student Allocation (BSA); Morgan said momentum for a BSA increase appears weaker this year than last. Mayor Hopkins described concrete local impacts, listing estimated district reductions tied to rising borough assessed values and urging consideration of targeted funding for maintenance and energy costs.

Morgan identified several bills the borough is tracking: a required-local-contribution cap (Senate Bill 278) that would limit municipal contribution increases to 2% over the prior year; House Bill 258 (a spay-and-neuter bill currently in the Finance Committee, with fiscal notes Morgan estimated at about $500,000 startup and ~$330,000 annually); property-tax exemption measures including a rental-conversion incentive (House Bill 13) and parity for hazardous-material volunteers (a possible exemption up to $10,000); and a road-service-area priority (house bill referred to Community & Regional Affairs and State Affairs). Morgan said the borough will continue to engage as committees take those items up.

What’s next: Morgan said conference committee work will continue on the supplemental and that the House will begin writing its operating budget while the Senate advances AKLNG-related measures. He offered to provide follow-up updates as legislation advances.