Legislature(2025 - 2026)SENATE FINANCE 532
04/02/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Department of Labor and Workforce Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 56 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 2, 2025
9:03 a.m.
9:03:28 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:03 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
Senator Mike Cronk
ALSO PRESENT
Dan Robinson, Chief of Research and Analysis, Department of
Labor and Workforce Development.
SUMMARY
SB 56 APPROP: OPERATING BUDGET; CAP; SUPP
SB 56 was SCHEDULED but not HEARD.
PRESENTATION: DEPARTMENT OF LABOR and WORKFORCE DEVELOPMENT
Co-Chair Hoffman discussed the agenda.
^PRESENTATION: DEPARTMENT OF LABOR and WORKFORCE
DEVELOPMENT
9:04:13 AM
DAN ROBINSON, CHIEF OF RESEARCH AND ANALYSIS, DEPARTMENT OF
LABOR AND WORKFORCE DEVELOPMENT, discussed a presentation
entitled "Key Economic Trends in 2025," (copy on file). He
relayed that he brought a number of slides to present, most
of which were a result of questions from the committee.
Mr. Robinson looked at slide 2, "Alaska Economic Trends,
Recent Issues," which showed a picture of four issues of
"Alaska Economic Trends" publication. He expanded that his
presentation included data from various sources including
the Institute of Social and Economic Research (ISER) and
the federal government. He discussed the extraction of
trends from data, and the importance of accuracy. He shared
that he would primarily be available to answer questions
during the presentation.
Mr. Robinson spoke to slide 3, "Topics You Asked about":
Data and Research on Housing
Mr. Robinson relayed that the Department of Labor and
Workforce Development (DOL) worked with the Alaska Housing
Finance Corporation (AHFC) on a couple of projects,
gathering data on lending activity and an annual rental
survey. He noted that housing was a key part of the economy
and impacted things like migration trends, population
growth, and jobs.
Mr. Robinson referenced slide 4, "Housing Prices Have
Climbed Sharply," which showed a graph representing average
sales prices for a single-family Alaska home from 1992 to
2023. He commented that sales prices had gone up a lot, and
sales prices had increased at a higher rate than inflation.
He observed that there was a sharp upward trajectory in the
previous four to five years.
Mr. Robinson turned to slide 5, "Low Levels of New Unit
Permitting," which showed a bar graph of new housing units
permitted in Alaska, 1960 to 2023." He pointed out housing
booms in the 1970s and 1980s, the housing crash in the
1980s, and a normal range of permitting. He observed that
from 2008 and 2009 forward, there were fairly few housing
units being permitted, which he attributed to the great
recession. He emphasized that housing supply had been
constrained for a while, which was part of what drove
housing up.
9:08:34 AM
Mr. Robinson considered slide 6, "New Home Costs Have Gone
Up More," which had a bar graph illustrating sales price
increases in new and existing Alaska homes from 2004 to
2023. He pointed out that housing markets responded to
supply and demand, so the strong increase for prices in new
homes were an additional factor driven by supply chain
issues. He discussed the increase of building supply
materials, and labor shortages, both of which contributed
to delays.
Mr. Robinson displayed slide 7, "Housing Has Become Less
Affordable," which showed a graph of housing affordability,
which signified an affordability index that combined wages,
home prices, and interest rates. He cited that in recent
years, the average number of wage earners required to own a
home had gone up. Average mortgage rates had gone up 350
basis points in two years.
Mr. Robinson highlighted slide 8, "Median Rental Costs by
State, 2023," which showed a list of states with the median
rental rates shown in a 90 percent confidence interval. He
cited that the Alaska rental rates were below the national
average. He cited that Alaska ranked 20th in rental costs
in 2023 and ranked sixth as recently as 2016.
9:12:07 AM
Mr. Robinson looked at slide 9, "Alaska Incomes/Rents Used
to be Highest," which showed a graph of average household
income and average rent costs for states. He noted that
Alaska was formerly a very high wage state as compared to
other states, which was part of what attracted people to
the state. He commented that Alaska was mostly a slightly
higher-than-average wage state.
Mr. Robinson addressed slide 10, "Topics You Asked about":
Industry Details: Oil and Gas
Mr. Robinson advanced to slide 11, "Oil and Gas Jobs Down
But Rising," which showed a line graph of average monthly
Alaska oil and gas jobs from 2001 to 2024. He pointed out
the peak at above 14,000. He pointed out average monthly
counts including bottoming out at 1,500. He noted that the
state started to add jobs but was still way below the pre-
Covid period. He discussed additional oil and gas jobs.
Senator Kaufman commented that some of the changes were
driven by maintenance backlog and consent-degree
replacement.
Mr. Robinson noted that there were similar drivers when the
state was hitting the high numbers in 2012. He mentioned
taxes. He mentioned maintenance, old fields, and high labor
cost of expansion.
Mr. Robinson looked at slide 12, "Oil and Gas Wages Are
Highest in State
Average Alaska Wages for Select Industries (2023)
Oil and Gas: $181,200
Metal Mining: $125,532
Construction: $ 93,372
Health Care/Social Assistance: $ 70,800
Leisure and Hospitality: $ 32,316
Total: $ 67,956
Mr. Robinson commented that oil and gas was one area in
which the state had higher wages than other locations. Over
the previous few years, he was surprised to find a struggle
to find workers despite the high wages.
9:16:53 AM
Mr. Robinson showed slide 13, "Increasing Share of
Nonresident Workers," which showed a graph of the percent
of non-resident oil and gas workers from 2001 to 2023. He
relayed that non-resident criteria was the Alaska Permanent
Fund Dividend (PFD), which was a strict definition. He
pointed out a steady increase in the number of non-resident
workers.
Mr. Robinson referenced slide 14, "Topics You Asked about":
Industry Details: Seafood
Mr. Robinson turned to slide 15, "Fishing Jobs Have Been
Falling," which showed a graph of average monthly fishing
employment in Alaska from 2011 to 2023. He relayed that
fishing jobs were not part of the normal data set. He noted
an annual report on fish harvesting jobs, and pointed out a
sizeable decline.
Mr. Robinson considered slide 16, "More Than Half of Jobs
Are In Salmon," which showed a pie chart of Alaska fishing
jobs by species. He pointed out a peak in July.
Senator Kiehl asked Mr. Robinson to discuss how data on
jobs were allocated to various fisheries.
Mr. Robinson relayed that geographic location was assigned
from the permits, and the landing triggered the calculation
of the number of crew required to fish the permit. He
mentioned gear type and species as additional
considerations.
Senator Kiehl suggested a hypothetical scenario with job
apportionment for individuals fishing multiple species
throughout the year.
Mr. Robinson described monthly landings and consideration
of the jobs required to fish the species, and considering
employment by place of work.
Senator Kiehl asked if the data considered monthly
proportionality by fish type.
Mr. Robinson clarified that the calculation was more
monthly tally by fish type.
9:21:18 AM
Mr. Robinson displayed slide 17, "Declines for Both Permit
Holders and Crew," which showed a bar graph depicting the
number of active Alaska permit holders and crew licenses
from 2014 to 2023. The slide showed the activity level for
types of people involved in fishing, showing crew members
and active permit holders. In some recent years, permit
holders did not fish. Rather than tally the number of
permits, active permit holders with at least one landing
were considered. He noted that crew licenses were easy to
obtain, and he was fairly certain the individuals were
active. He observed a big decrease in people fishing in the
state, from over 35,000 in 2014 to 22,000 in 2023.
Mr. Robinson highlighted slide 18, "Big Shakeup in Seafood
Processing," which showed a bar graph of processing jobs in
facilities with announced closures or sales. He relayed
that the information was taken from an article the
department did on a historical look at processing
facilities that were closing or going up for sale. He
thought the information was a meaningful piece of the
total. He noted that for certain areas, the facilities that
were at risk may have been all that was available for the
area. He noted that the situation was still developing, and
the department had only just received third-quarter data
from 2024.
9:24:00 AM
Mr. Robinson looked at slide 19, "Seafood Processing Around
the State," which showed a map of the state denoting
seafood processing employment and number of facilities by
area.
Mr. Robinson addressed slide 20, "Processing Jobs Have Also
Been Falling," which showed a line graph with Alaska
seafood processing average and peak employment, from 2014
to 2024. He noted that in 2020, there was a big decline in
activity level. He discussed processing plants during the
Covid-19 pandemic. He observed a lower average monthly job
count.
Mr. Robinson advanced to slide 21, "A Growing Percentage of
Nonresidents," which showed a line graph of the percent
nonresident Alaska workers in seafood processing from 2001
to 2023. He commented on the high number of non-resident
seafood processing workers. There was not much question
that the number would rise again in 2024.
Co-Chair Hoffman asked if there was an idea of where the
nonresident workers were coming from.
Mr. Robinson mentioned nonresident workers with H-2B visa
applications, and noted that the data was difficult to
obtain. Previously there was an ability to identify
international workers based on the social security number,
but the process was now more difficult. He thought there
were more non-residents that were international versus
domestic. In the previous five years, there had been
applications from companies to be able to hire more
international workers.
9:27:38 AM
Mr. Robinson looked at slide 22, "Topics You Asked about":
Industry Details: Tourism
Mr. Robinson spoke to slide 23, "Tourism Has Been a Growth
Industry," which showed a bar graph representing cruise
ship visitors to Alaska from 2014 to 2025. He observed a
big increase over a relatively short period of time. He
pointed out an all-time high in 2023 and 2024 after very
low levels in 2020. He shared that it was hard to say how
much more growth to anticipate but the demand was strong.
He described the appeal of Alaska as an enduring economic
strength of the state.
Co-Chair Hoffman asked about the number of cruise ships
over time.
Mr. Robinson asked for clarification.
Co-Chair Hoffman asked about increases in the number of
ships.
Mr. Robinson relayed that part of the reason for increased
passenger counts was due to the construction of much larger
ships.
Mr. Robinson referenced slide 24, "Cruise Ship Stops
Scattered Around State," which showed a map of the state
denoting where cruise ships stopped and number of stops.
He observed stops concentrated in Southeast but with
scattered stops in other locations. He pointed out that the
travelers to Southeast often stayed in other parts of the
state and that tourism was a statewide industry.
9:30:53 AM
Mr. Robinson turned to slide 25, "A Growing Share of
Nonresident Workers," which showed a line graph depicting
the percent nonresident Alaska workers in visitor-related
jobs from 2001 to 2023. He discussed the difficulty in
obtaining data and considered that a subsector like whale
watching would show much higher data. He qualified that
most non-resident workers were from the United States and
that the number had increased.
Mr. Robinson considered slide 26, "Topics You Asked about":
Industry Details: Mining
Mr. Robinson displayed slide 27, "Strong Steady Growth in
Mining Jobs," which showed a line graph of the average
monthly Alaska mining jobs from 2001 to 2024. He remarked
on the short period of time for growth. He commented that
there was a lot more growth potential and that the state
had minerals that the world needed. The state was also
infrastructure-challenged, which was one of the reasons
mines in Southeast were somewhat more viable. He mentioned
the Ambler Road project.
Senator Kiehl thought the steadiness of employment growth
over 20 years as shown on the chart was remarkable. He
asked Mr. Robinson to discuss the consistent growth in
jobs.
Mr. Robinson completely agreed. He was fairly sure that
when a mine came online, it always had a life expectancy
and always extended the date. He used the example of the
Kensington Mine. He discussed expanded operations.
9:35:28 AM
Mr. Robinson highlighted slide 28, "Nonresident Workers in
Mining Industry," which showed a line graph depicting the
percent non-resident Alaska workers in mining jobs from
2001 to 2023. He observed that the graph showed an
increasing percentage on non-resident workers and observed
a spike in non-resident workers when the Kensington mine
opened, which had later dipped before a rising trend. He
pondered that that the jobs might be less visible than jobs
in town and discussed means of exposing young people
through internships and other experiences. He relayed that
more often than not, resident and non-resident employment
grew and shrank together. He used the example of Skagway,
which could not provide all the workers for the summer
tourist industry.
Mr. Robinson looked at slide 29, "Other Key Industries and
Sectors
Industry Details: Construction
Mr. Robinson addressed slide 30, "Strong Recent Growth in
Construction," which showed a line graph depicting average
monthly Alaska construction jobs from 2001-2024. He noted
that Alaska had led the nation in construction growth at
different points in time over the previous three years. He
cited reasons such as of Willow and Pikka mines and
mentioned the Infrastructure Investment and Jobs Act
(IIJA). He thought attributing the growth to IIJA was
tricky because of lack of data. He mentioned jobs
associated with oil fields.
Mr. Robinson advanced to slide 31, "Jump in Nonresidents in
2023," which showed a line graph depicting the percent
nonresident Alaska workers in construction jobs, 2001-2023.
He pointed out a big jump in 2023, most likely due to a
labor shortage. He commented on the specialized work
developing Willow and Pikka mines, specifically in
pipelines, that would require hiring from an international
workforce. He mentioned that many of the workers in mine
development were always moving in the world to where the
oil and gas activity was.
9:39:26 AM
Mr. Robinson looked at slide 32, "Other Key Industries and
Sectors
Industry Details: Government
Mr. Robinson spoke to slide 33, "Government Jobs, 2001-
2024," which showed a bar graph of federal state and local
government jobs. Local government included municipal
government as well as K-12 schools. In all three cases, the
peaks were a way back. State government showed a peak in
2014. Local government peaked in 2010 at about 40,000.
Senator Kiehl asked if tribal government employment showed
up on the chart.
Mr. Robinson answered affirmatively. He mentioned tribal
government-specific growth in recent years.
Co-Chair Stedman assumed that state government numbers
counted actual employees and not positions that included
vacancies.
Mr. Robinson answered affirmatively. He noted that the data
included jobs that involved a paycheck.
Mr. Robinson referenced slide 34, "Private Sector Jobs Have
Grown Most," which showed a line graph of the annual
percent change in government and private sector jobs from
2002 to 2024. The slide showed how the private sector
compared to total government jobs over 20 years. He pointed
out that most of the time the private sector had been
growing at a higher rate, with the exception of the
recession in 2009/2010 and a small amount in 2015 to 2018
downturn. Government jobs fell less (by far) than the
private sector during the Covid-19 pandemic and had been
growing less since.
Mr. Robinson directed attention to the small box at the
bottom of the slide with more specific insight:
Total change in private sector jobs
2002-2024: 13.2%
Total change in government jobs
2002-2024: 2.5%
Mr. Robinson noted that over the period, the state's
population had grown by about 15 percent. He observed that
government jobs per capital had shrunk.
9:43:16 AM
Mr. Robinson turned to slide 35, "Overall State Economy Has
Improved
• We underperformed relative to U.S. and most other
states over the decade from 2013-2022 by most
macroeconomic measures (Gross Domestic Product (GDP),
employment growth, personal income, net migration)
• BUT, from 2023 forward we have overperformed U.S.
economy and most states in job growth (and in GDP for
at least 2023)
Mr. Robinson considered that he had looked over a
presentation he had given two years previously. at the
time, the state was at or near the bottom in almost every
economic measure. In the more recent period, the state had
generally outperformed the U.S. economy.
Mr. Robinson considered slide 36, "Stronger Job Growth in
2023 and 2024," which showed a line graph representing the
percent annual change Alaska and U.S. job growth from 2005
to 2024. From 2012 to 2023, the state was below the U.S.
with greater effects of Covid-19 but in 2023 the state
bumped up and was comfortably above the country's job
growth in 2024.
Mr. Robinson displayed slide 37, "Stronger GDP Growth in
2023," which showed a graph depicting the percent of annual
change Alaska and U.S. Gross Domestic Product (GDP) growth
from 2006 to 2024. The U.S. was far less volatile than
Alaska. The line representing the state was jagged. He
thought GDP was driven by oil prices primarily. He relayed
that sometimes the department considered GDP without oil.
He observed growth in 2023 and noted that the data did not
show increased production from Willow and Pikka.
Mr. Robinson showed slide 38, "Negative Net Migration for
Last 12 Years," which showed a graph of Alaska in migration
and out migration from 2005 to 2024. He noted that for the
previous 12 years more people had left the state than
migrated in. He remarked on the size of the numbers and
noted that in 2024, 92,000 people either moved to or away
from Alaska, which was well above 10 percent of the total
population. He thought it was worth talking about why
people left.
Mr. Robinson looked at slide 39, "Working-Age Population
Has Fallen," which showed a graph of Alaska's working-age
(18-64) population from 1990 to 2024. He pointed out that
there was a decline in the people coming to the state, and
the people that came stayed for a shorter amount of time
than previously. He mentioned declining birth rates and
baby boomers aging out of work. He observed that in the
last two years the declines were less steep.
9:48:08 AM
Senator Kiehl thought Mr. Robinson had mentioned a data
point on slide 38 that indicated people that came to the
state stayed for a shorter time on average than previously.
He asked about what factors were contributing to the
effect.
Mr. Robinson relayed that he did not know, and contemplated
reasons for moving such as jobs, housing, family, and
health. He qualified that it was impossible to know with
precision. He mentioned that the division had recently
written an article on seniors, who were leaving the state
at a slightly higher rate than previously. He pondered that
seniors were not finding something in the state that could
be found elsewhere. He mentioned an article that explained
that states with strong net gains in senior populations
were the mountain Western states. He thought jobs were a
part of the effect and noted that jobs in the country were
strong. He thought the question mattered for the economic
future of the state.
Mr. Robinson addressed slide 40, "Current and Durable
Economic Strengths
• An abundance of resources the world needs or wants
(minerals, oil and natural gas, fish, wildlife,
dramatic natural beauty, rich cultural heritage)
• Location/size, in some contexts: military, air
cargo, potential new international shipping lanes
• Strong reputation as a big, beautiful, adventurous,
outdoor entertainment-rich place to live
Mr. Robinson relayed that the items on the slide were seen
as economic assets in the past and for the future. He
acknowledged that fisheries were experiencing challenges
but it was a world-class resource that would not go away.
He reminded that not very long ago the state was talking
about closing Eielson Air Force Base in Fairbanks.
Mr. Robinson discussed the state's reputation and thought
its brand was strong. He pondered migration by age, and
thought the state attracted young people, and
disproportionately males.
9:52:52 AM
Mr. Robinson advanced to slide 41, "Economic Challenges
(Some Enduring)":
• Unprecedentedly sticky trend of negative net
migration and working-age population decline
• Most volatile tax revenue of any state and an
ongoing transition to a new set of revenue and
spending assumptions
• Location/size in some contexts (distance from major
markets, small local population, expensive travel to
and from, energy sources and connections)
Mr. Robinson noted that negative net migration was not
happening in all places, but in certain states. He
clarified that the phenomenon was not happening in every
state and was a weakness. He cited a study that identified
Alaska as having the most volatile revenue of all the
states, which he thought was less of a challenge when the
state's savings accounts were large. He discussed unique
factors in the state listed on the bottom of the slide.
Mr. Robinson looked at slide 42, "Questions or to Subscribe
to Trends":
[email protected]
(907) 465-6040
Mr. Robinson noted that there was a QR code displayed on
the slide, which provided access to the publication Alaska
Economic Trends.
Senator Kiehl thanked Mr. Robinson for the information and
insights. He pondered diversification of the state's
economy and thought it was encouraging to see private
sector job growth that had occurred. He asked what else the
legislature should be considering.
Mr. Robinson referenced ISER economists that had discussed
diversification and emphasized maximizing value of what the
state did best. He mentioned success in changing product
forms in seafood processing. He mentioned seafood
processing, tourism, and mining. He emphasized that the
state did not have as much infrastructure as other states.
He discussed advantages of Southeast. He mentioned strong
schools and universities, which he described as "a breeding
ground for thinking" for entrepreneurs.
9:58:21 AM
Co-Chair Stedman referenced slide 3 and thought it would be
helpful to include the numerics on the slide on state
government employment. He thought it was interesting to
think about the decline in the state's employee base while
looking at changes in overall expenditure.
Mr. Robinson agreed to provide the information. He pointed
out that despite declining employment, wages had gone up.
He noted that there had been a small uptick in state
employment, with a little success in filling some of the
many empty positions.
Co-Chair Stedman considered growth in government and
thought it would be interesting to see the decline in
employment versus the agency spending, which had been
fairly flat.
Mr. Robinson relayed that six or seven years previously he
had been frustrated hearing people discussing a lack of
cuts in government versus the private sector. He clarified
that the governor did not generally cut jobs by layoffs but
rather through attrition. He thought the University's
decline roughly matched the non-University decline in
positions.
Senator Kaufman thanked Mr. Robinson. He referenced slide
37 and asked about the effect of inflation.
Mr. Robinson noted that the data was inflation-adjusted and
had been sourced from the Bureau of Economic Analysis.
Senator Kaufman mentioned slide 17, and Alaska permit
holders. He asked about the transition from in-state to
out-of-state permit holder.
Mr. Robinson clarified that the numbers showed holders of
Alaskan permits, and would include non-resident permit
holders. He noted that there was an increasing number of
non-residents holding Alaska permits. He referenced a
recent article on the topic.
Senator Kaufman observed that there was a diverging trend
of fewer permits and less permits in Alaska.
Mr. Robinson answered affirmatively. He cited that the
decline would be bigger if it showed only Alaska holders of
Alaska permits.
10:02:49 AM
Co-Chair Stedman referenced his earlier question and
suggested that the University positions be factored out of
the state agency job data he requested.
Mr. Robinson agreed.
Co-Chair Hoffman addressed the general topic of economic
trends and asked about what role the PFD program and funds
had on the trends.
Mr. Robinson relayed that mathematically, the PFD made the
state richer. It was harder to ascertain whether the funds
were spent or saved. He noted that there was not a lot of
good data on how the funds were spent. The funds increased
collective wealth. The division had written in 2016 that
when a state struggled over an extended period of time,
something other than a business cycle was happening. He
mentioned items such as reduction of the PFD, reduction of
state government, and increased revenue. He relayed that
ISER had done work to contemplate the short-term effect of
the factors.
Mr. Robinson continued and commented that there was no
state that had a lower tax burden than Alaska. He had heard
economists say that the state had powerful levers that had
not been engaged yet. He mentioned the resistance to
engaging the levers, which was political and due to people
"being used to things." He pondered whether the state had
more government than its share, which was inherited from
the heyday in the 1980s along with high wages and
retirements. He cited that in the 1980s, Alaskan teachers
made 70 percent more than average, while now they made
average wages.
Co-Chair Hoffman discussed the agenda for the following
day.
ADJOURNMENT
10:07:43 AM
The meeting was adjourned at 10:07 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 040225 RA Economic Trends Presentation Senate Finance 4.2.2025.pdf |
SFIN 4/2/2025 9:00:00 AM |