Dear Friends and Neighbors,
The two most pressing issues for the Legislature right now are passing an operating budget before a potential July 1st government shutdown and to put on overall fiscal plan in place to address our deficit.
I’d like to explain to you, my constituents, my perspective on what is wrong with the Senate’s budget and fiscal plan, as well as why the House has not concurred with their actions:
The Senate’s plan is reckless to rural Alaska while holding oil companies harmless. As rural residents, we have to ask ourselves: What kind of a solution do we want? I do not want an incomplete fiscal solution that drains our savings and rides the backs of my constituents, children, and seniors while holding oil companies harmless.
‘Why is the Senate’s plan unfair to rural Alaska?’
In rural Alaska, we rely on essential services that the state provides. Not only does the Senate’s budget contain dangerous cuts to the marine highway system, education, seniors, and the disabled, but their overall plan relies on $700 million in unidentified future budget cuts; while there is still some waste that needs to be carved out, the budget does not contain another $700 million in cuts.
Despite cutting the budget $3.4 billion since 2013, we have drained over $10 billion in savings. Economists have told us that Alaska cannot cut its way to prosperity and that every $100 million in additional cuts will eliminate 1,000 to 1,500 private and public-sector jobs. In order to reduce our strong dependence on the price of oil, we need a broad-based solution that provides additional revenue for the state.
Managing fisheries, plowing roads, maintaining ports and harbors, taking care of seniors, providing our children with a good education, and an operating marine highway system are not waste. (the Senate is proposing a $2.7 million cut to the Alaska Marine Highway System (AMHS) budget that has already been cut $23 million in recent years. According to the Department of Transportation and Public Facilities, even another $1 million in cuts to AMHS will result in 6 weeks of lost service to Prince William Sound and 6 weeks of lost service in Southeast Alaska.)
To further the regressive nature of the Senate’s plan, they are offering a 25 percent lower dividend than the House’s plan, which also disproportionately affects rural Alaska.
The Alaska House Majority Coalition has a plan that preserves essential services, fishing opportunities, schools, the university, marine transportation, pioneer homes, and Alaska’s economy. The Senate’s scheme slashes education, seniors, the marine highway system, and other essential services while paying an additional $328 million giveaway to oil companies. More importantly, it leaves a half-billion-dollar gap, prays that oil prices recover quickly, and does nothing to diversity our revenue base so that we do not end up in this situation the next time oil drops drastically. It should also be noted that the Senate’s plan would leave as the only state in the country without a broad-based tax.
Here is a comparison of the House’s versus the Senate’s plan:
| House Plan #AKHERE2STAY | Senate Plan #DRAINNPRAY | ||
| Economy | Supports a diversified economy and sustainable revenue | Drains savings while praying for oil prices to rise | |
| Education | Keeps qualified teachers in the classroom and educates our kids for the future | $90+ million of cuts to education, fires 700 qualified teachers and staff, ends all early learning, and devastates University of Alaska | |
| Seniors, Elders and Veterans | Honors our seniors, elders, and veterans by keeping Pioneer Homes open | Betrays trust by closing Pioneer Homes putting seniors, elders, and veterans at risk | |
| Jobs | Keeps more Alaskans working | Cuts result in more job layoffs, mostly in private sector | |
| PFD & Permanent Fund | Guarantees at least $1250/person, Protects the fund for the future and protects the dividend | Limited to only $1000/person, Threatens the fund and strictly limits dividend | |
| Oil Subsidies | Prioritizes Alaskans by standing up against corporate subsidies to oil and works to get Alaskans | Prioritizes oil companies with $1 million/day tax subsidy giveaway | |
| a fair share | |||
| Recession | Prevents deep recession and retains property values | Prolongs recession, costs more jobs, slows rate of recovery | |
| Infrastructure | Capital plan for safe roads, bridges, and airports | Threatens public safety with deferred maintenance and little support for road maintenance, snow plowing, and safety improvements | |
| Public Safety | Sustainably funds Troopers, VPSO’s, prosecutors, and programs designed to prevent crime | Funds Trooper positions through a one-time capital budget addition, reduces funding for VPSO’s, fails to address substance abuse and other known drivers of high crime rates | |
| Fish and Game | Champions Alaskan way of life with funding for fish and game | Funding cuts undermine hunting and fishing opportunities | |
You can find this table online at: http://akhouse.org/houseplan/
The State is currently burning through $8 million in savings per day and I cannot support the Senate plan for these reasons:
1 . It is not a complete solution that addresses our fiscal gap this year and stops our bleed of $8 million per day. It kicks the can down the road.
2. It is irresponsible to rural Alaska, seniors, children, and the economy while continuing to provide large subsidies to oil companies.
3. It is not fair or comprehensive.
4. It does nothing to broaden the State’s revenue base and prevent a similar crisis the next time the price of oil drops.
The Bottom Line
Our bipartisan House Majority Coalition passed a full budget with $80 million in rational cuts. The Senate countered with deep cuts to education, the university, the marine highway system, and basic senior, disability, and children’s services, as well as an additional $328 million payment to oil companies. They passed what the Governor is correct to call an incomplete revenue plan that leaves continuing deficits, drains our savings, and allows no ability to afford a modest, job-creating construction, road, and maintenance budget. Their plan favors oil companies while disregarding the essential services and needs of Alaskans.
The bottom line is that I was elected to represent you the best I can and make tough decisions during the worst budget crisis in Alaska’s history. The Senate is proposing an incomplete solution that kicks the can down the road at the expense of our savings and constituents, but to the benefit of oil companies. I will not support their plan as proposed.
I am confident, however, that good people on both sides of the aisle will reach a compromise on the budget well before the July 1st government shutdown. What that compromise will look like I am unsure of, but I promise you that I will work as hard as I can to make sure you are well represented in that compromise.
Please contact me with your thoughts. You deserve to hear my opinion on these issues, but I work for you and want to hear your opinion as well.
Also, if you have a moment, please fill out this survey. We want to know where you stand on these issues:
http://akhouse.org/housesurvey/
Whether your thoughts are on the budget, new revenue, fisheries or transportation issues, or something that is important to you and your family, I’m here for you and will always endeavor to work on your behalf.
Warm regards,
Louise Stutes
State House Representative for District 32
Serving Kodiak, Cordova, and Yakutat
(907) 465-3271
https://www.facebook.com/RepLouiseStutes
