By Marcia Kuszmaul

Homer Independent Press

Senate President Gary Stevens named six big issues for the 2026 Alaska legislative session at Homer City Council’s regular meeting Monday, Jan. 26. Council members discussed city priorities and positions they will take to Juneau the week of Feb. 16 for the Alaska Municipal League meeting and meetings with state legislators.

“My experience in the legislature is that we can handle two or three big issues,” Stevens said via Zoom. “But actually, I jotted down six of them that are very big.”

Stevens ticked off the budget, the gas line plans, Gov. Michael Duleavy’s fiscal plan, state retirement issues, election reform and the governor’s veto of Department of Transportation (DOT) funds.

Stevens said the governor’s operating budget takes about half of the $3 million in the Constitutional Budget Reserve.

“That’s our major savings account,” Stevens said. “So that’s pretty dangerous.”

Stevens noted reductions in education spending — $25 million less because of smaller K-12 enrollments — and a 50 percent cut in the Community Assistance Program — $14 million from the normal $30 million — which helps local governments provide basic services.

“But the really big problem is the capital budget,” Stevens said. “There is absolutely nothing for major maintenance.”

Stevens is working to restore a $70 million federal match for DOT projects that Dunleavy cut from the budget and to put funds back into the retirement system to staunch the flow of teachers, police and other state employees from the state.

On the revenue side, Stevens said lower oil prices have resulted in $181 million less oil revenue this year and projected $119 million lower for 2027.

“That’s a real problem we have to deal with, realizing that we are depending more and more on the revenues from the permanent fund to pay for government,” he said.

As for the governor’s fiscal plan, Stevens said it would take time to go through it and figure out how to pay for it. He called out the proposed seasonal sales tax of two to four percent that would be added to local sales tax and the guarantee of a large permanent fund dividend.

Stevens said he has spoken with Kenai Peninsula Borough Mayor Peter Micciche several times about the property tax break Dunleavy has proposed for the Alaska LNG project. He said Micciche is concerned about giving up any of the property tax that the borough receives.

“There are big issues that we’ve got to deal with in that fiscal plan,” he said.

This legislative session will be Steven’s last. He is retiring after 26 years in the legislature.

With the prospect of a minimal if any capital budget and insufficient information on the wide array of new bills coming before the legislature at the beginning of the session, the council postponed to Feb. 9 action on a measure to establish capital requests and legislative positions.

Jenny Carroll, special projects and communications coordinator for the city, reviewed a strategic capital request list of four large-to-small projects off the city’s Capital Improvement Plan should capital funds become available. Council member Shelly Erickson recommended Homer Spit erosion be considered for the capital list.

The council weighed in on a critical gap in the fiscal year 2027 State Capital Budget, passing a resolution to support funding the State of Alaska Municipal Harbor Facility Grant Program. 

The 50/50 matching program was established in 2006 to help local communities maintain the ports and harbors they inherited from the state.

This year $18,186,535 in projects were submitted to the DOT to be ranked and recommended to the governor and state legislature. 

“For the first time ever, DOT has not ranked the projects,” Bryan Hawkins, Homer port director, said. “It’s frustrating because, since it’s a match and these are big projects, communities have already done a lot of work and now they can’t follow through.”

In a call to DOT, Shannon McCarthy, communication director, said the ranking hadn’t happened “because there is no funding.”