Dunleavy offers past highlights, future hopes in final State of the State address
- Mark Sabbatini
- 2 days ago
- 7 min read
Updated: 1 day ago
Legislators say speech glosses over some hard truths, want more details about his fiscal plan and new agreements on Alaska LNG Project
By Mark Sabbatini and Jasz Garrett
Juneau Independent
Gov. Mike Dunleavy took a victory lap of his claimed accomplishments during the past seven years and offered a general glimpse of how he hopes the state will overcome its financial struggles in the years to come during his final State of the State address to a joint session of the Alaska Legislature on Thursday night.
The Republican governor’s 80-minute speech also highlighted what he called “milestone” agreements toward a long-discussed natural gas pipeline announced two hours before his speech by energy developers and producers. But some legislative leaders said that project is still many steps from becoming reality and expressed disappointment that he didn’t provide details of his promised fiscal plan.
Dunleavy said his time in office since 2018 has been filled with both natural and human-caused extremes, including 85 state and federal disaster declarations — a rate of about one per month. He also noted the state has seen oil prices range from $3 to $120 a barrel, and Alaskans have received both the largest and smallest (inflation-adjusted) Permanent Fund Dividend in history.
“So as I close out my last State of the State and enter the last year of my two terms serving the people of Alaska, I want to say to the people of Alaska this has been the greatest honor of my life,” he said. “I’m excited about the possibilities and I’m grateful for the opportunities to make Alaska the greatest state in the greatest country on the face of the Earth.”
Dunleavy spent about 50 minutes of his speech reciting what he considered to be achievements by his administration with the economy, infrastructure, crime and other issues. He also acknowledged the state is still struggling in many of those areas.
“I know there’s a feeling that things can be better, and of course they can, but our economy has been getting stronger and stronger every year of my administration, and diversifying as well,” he said.
Economic struggles are likely to continue during the next five years until new natural resource development projects — including the natural gas pipeline — significantly alter the state’s fortunes, Dunleavy said. He said that’s the motivation for the fiscal plan he plans to unveil during the coming week, some elements of which he has already discussed or submitted legislation for.
“As I’ve interacted with investors across the country and around the world, and engaged with those familiar with other states’ budget processes, it’s clear that this volatility is one of our greatest challenges to overcome,” he said.
Dunleavy said during a Cabinet meeting Wednesday he plans to introduce a seasonal sales tax. House Speaker Bryce Edgmon, I-Dillingham, said the governor has submitted legislation to limit annual state spending increases to 1% and alter management of the Alaska Permanent Fund, which will be formally introduced on Friday.
Leaders of the House and Senate majorities, both of which consist of bipartisan coalitions, said they felt Dunleavy took credit for some things that have been accomplished collectively by policymakers and put an overly rosy spin on the state’s overall situation.
Several legislators also said they doubt a comprehensive plan making changes to the state’s tax system and structure of the Permanent Fund — the latter of which will require a state constitutional amendment — is a realistic goal before the end of the regular session deadline of May 20.
The budget that gets passed for the coming year is likely to be very similar to the current one, said Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee.
“There won't be a lot of changes,” he said. “I think when we take a look at that issue, even if we move forward with this fiscal plan, it's going to take a couple of years to engage it and get the revenue collected. So this year tell the people around the state: expect something very similar.”
Other legislators noted that glossy statistics don’t necessarily match how residents around the state are feeling. Dunleavy said in his speech, for instance, that jobs “are forecast to reach a record high in 2026.” However, a recent state report notes 22.9% of workers were imported from out of state in 2024, the highest since tracking of that statistic began in the 1990s.
“I don't think that most folks are very happy with the level or the quality of state services being provided today,” said Calvin Schrage, I-Anchorage, who co-chairs the House Finance Committee. “That was largely one of my takeaways today, is the governor did a good job of highlighting some of the achievements from his administration, but I think in many cases they missed the mark on the reality felt on the ground.”
A key theme of Dunleavy’s speech was Alaska’s long-term economic future being bright due to natural resource development opportunities opened up by President Donald Trump. Two hours before the governor’s speech, a company taking the lead role in the Alaska LNG Project — Glenfarne Group LLC — announced agreements it states are moving the project from the planning phase into the execution phase.
“There is simply no shortage of good news about this project, and Glenfarne deserves enormous credit for this outstanding work that will benefit all of us,” Dunleavy said.
Legislators were more reserved in their assessments of the announcement, generally calling it a step forward on a project that still has many unknowns and obstacles ahead.
“It's great that some agreements were signed by companies, by support companies as well and oil companies, but we don't know what they look like," said Senate Majority Leader Cathy Giessel, R-Anchorage. “These are probably confidential. We'll be finding out and looking into it more. But as Senator Stedman said, we need to look at our current laws and do they work for this new project. So those are things we'll be assessing.”
House Majority Leader Chuck Kopp, R-Anchorage, while acknowledging a lot of pieces still need to be put in place, offered a more optimistic assessment.
“I think we need to proceed forward with assuming the best is happening,” he said. “From what we can see it's farther than we've ever gotten.”
Brendan Duval, Glenfarne’s chief executive officer and founder, said he sees it as very unlikely any of their partners would back out on the agreed terms. Glenfarne signed a non-binding letter of intent with Enstar Natural Gas Company for a 30-year supply of natural gas from the Alaska LNG pipeline to Enstar, which is subject to final documentation and approval by the Regulatory Commission of Alaska.
“This is a project of national and international attention,” Duval said. “It's got the attention of the governor, the state Legislature here, every member of the Cabinet in D.C. under President Trump knows the project intimately, and the president just called it out himself in his first year update. So nobody will have their name announced here lightly, this is an extremely serious step, and them consenting to their names being announced, I think, proves that.”
Duval said pipe could start being laid into its trenches as early as December 2026 into January 2027. The first phase of the pipeline would break it into four different spreads, approximately 200 miles each. The Point Thomson Transmission Line would carry gas from the Point Thomson Field roughly to Prudhoe Bay, meaning there are roughly five portions of the pipeline Glenfarne has allocated conditional awards for to different contractors, according to company officials.
“We expect all pipe to be in ground of what’s called mechanically complete by the end of 2028 and we’ll have commissioning during the first half of 2029,” Duval said.
Toward the end of his final State of the State, Dunleavy questioned the future of the state beyond his tenure. His last day in office is Dec. 7, 2026.
“So what will our future look like when change comes? How will future governors and legislators choose to respond? That's the bigger question,” he said. “Will they see new ideas and new technologies as threats, something to fear or resist because they challenge the status quo or will they see them as opportunities to make Alaska stronger, more independent and more prosperous? Let's not be afraid of what the future may bring. Let's not fear things like AI and robotics. Let's take advantage of these opportunities.”
In an interview following the speech, Sen. Matt Claman, D-Anchorage, the only active legislator among the 14 candidates hoping to be the state’s next governor, said he thinks the state must embrace future opportunities “in every form.”
Regarding the LNG pipeline announcement, Claman said he’s interested, but not a lot of details were given.
“We'll be hearing more details as early as tomorrow (Friday) morning,” he said.
As for the fiscal plan, he said “I'm optimistic we'll hear it as early as Monday.” Claman said when the governor spoke during a recent Senate retreat, he said details would be released the second week of the legislative session.
Claman said he thinks “we all share that goal” when it comes to growing the state’s economy and establishing a more stable fiscal structure.
He said Dunleavy articulated a strong vision for Alaska’s future, but “how much he can deliver on that vision is something we’re going to have to see how he does.”
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306. Contact Jasz Garrett at jasz@juneauindependent.com or (907) 723-9356.
