With veto of HB 78, Gov. Dunleavy makes it clear who he serves

The Alaska Legislature fails to override Gov. Mike Dunleavy’s veto of a public employee pension bill on Tuesday, May 19, 2026. (Mark Sabbatini / Juneau Independent)

By Chris Heidemann

Gov. Mike Dunleavy will be remembered for eight years of the Dunleavy Decline and as the worst and least productive governor in Alaska history.

With his veto of HB 78, outgoing Gov. Mike Dunleavy has delivered one last illustration of exactly whose interests his administration serves. Unfortunately, his allegiance is not to his constituents in the state of Alaska, but to outside special interests, the billionaire class and his own ego. 

In 2006, Alaska closed its traditional defined benefit pension system to new employees. The legislature at the time was reacting to an unfunded liability in the system due to actuarial errors and fraud. In short, the inflows from current employees, along with investment income, were not enough to pay for the outflows to retirees. It bears noting that the legislature in 2014 in pursuit of short-term savings, extended the repayment term.

Overnight, Alaska became the only state not to offer a pension for public service. 

Since 2006, new members of the Public Employee Retirement System (PERS) which includes public safety, state employees, and educational support professionals, as well as the Teacher Retirement System (TRS), which includes teachers and school administrators, have only had the option of a 401K style defined contribution account. While clearly better than nothing, most financial experts agree that pension benefits are superior in almost all cases because they offer an income that cannot be outlived. 

Opponents of a return to a defined benefit system have offered many arguments as to why that would be a bad idea and those reasons have been debated for more than 20 years. One argument opponents have used frequently is that pension benefits are largely a thing of the past in the private sector and that public employees should not be given a benefit that most in the private sector will not receive. The reality is that public servants are asked to gain the same advanced degrees and training as professionals in the private sector, and in some cases accept risks to their lives and health, while accepting far less in lifetime compensation and benefits than their peers. Teachers do not even have access to Social Security or supplemental options like SSI. The pension system was a way to take care of public servants for making this choice. In short, the public service sector asks for varsity-level talent while offering junior varsity-level compensation. 

Since adopting the defined contribution only system, Alaska has seen its ability to attract and retain public servants eroded. The lack of a pension for public service has clearly played a role in this. While the state’s chronic underfunding of education and other sectors is also a factor, attempts to address salary alone have not proven effective in improving recruitment and retention.

While HB 78 was not a perfect law, it attempted to provide a means to bring Alaska back in line with the other 49 states and honor public service with a modest pension. This bill would have improved our ability to bring professional servants to our state and would have provided lifetime security for those who have devoted their careers to the state over the last 20 years. HB 78 represented the culmination of 20 years of collaboration, problem-solving, and soul-searching. It was a bipartisan solution to a problem supported by a majority of both chambers of the legislature. It was a bill by the people of the state, for the benefit of the people of the state. 

So what was Dunleavy’s reaction to this bill that acted in the best interest of the educators, police officers, firefighters, and countless other public servants of his state arriving on his desk? He immediately attempted to use it as a bargaining chip to achieve a massive tax giveaway to an outside company. He demanded the legislature agree to his list of demands in record time at the end of the session to give money away to a corporation. And when they were unable to do that, in a last act of petty spite, he vetoed a bill that would have been a life-changing benefit for actual individual Alaskans. 

The biggest shame in all of this is that the gas line deal will almost surely be struck in a special session. The company in question will receive some or all of its desired tax breaks and the possibility of the line being built will remain alive. The veto of HB 78 comes down to retaliation for the governor not getting his way when and how he wanted it. And when that happened, he was fine with his revenge damaging his constituents. 

HB 78 is dead. There will certainly be similar bills introduced in the next legislative session, and the work will continue. The biggest question remaining seems to be, what type of executive will the people of Alaska elect next? As for our current executive, a former Alaska educator and administrator, I sincerely hope he enjoys his pension benefits in retirement. 

• Chris Heidemann is a Juneau educator and the former president of the Juneau Education Association union.