Interim Report: Legislature braces to tackle FY ’19 budget

Rising costs of public safety, prisons, Medicaid present challenge

Sen. Gary Stevens

Season’s Greetings. There are just a few weeks remaining in what has been a very active legislative interim and lawmakers are preparing to return to Juneau for the 2018 session, which begins Tuesday, Jan. 16. After four special sessions this year, I am hopeful we will complete our work, including passing the Fiscal Year 2019 budget, in the statutory 90-day session.

FY ’19 Budget

The budget dominates much of the discussion during legislative sessions, and that will be the case again in 2018. Our starting point is Governor Walker’s proposed $4.7 billion FY ’19 budget. This is a drop of 1.7 percent from the current fiscal year’s $4.8 billion budget.

With a proposed $34 million public safety initiative, a higher-than-expected prison population, and growing Medicaid healthcare rolls, state agency spending is higher than this fiscal year in the governor’s budget. Some savings will come with the elimination of over 200 state jobs.

Also in the budget, the governor is proposing to pay off tax credits still owed to oil exploration companies by issuing bonds. About $900 million will eventually be owed by the state under the tax credit program. Future participation in the tax credit program was eliminated by legislation earlier this year.

To help bridge an anticipated $2.5 billion budget gap, the governor is calling for the utilization of $1.9 billion in Permanent Fund earnings to help pay state expenses. The budget would also draw $400 million from the state’s Constitutional Budget Reserve, leaving $1.7 billion in the account.

The budget plan also calls for a payroll tax, with the goal of using this revenue to help pay for deferred maintenance and community infrastructure projects. The 1.5 percent tax is projected to raise $800 million over three years, and then sunset. A similar proposal introduced by the governor during this fall’s special session did not advance.

You can expect many changes to the governor’s budget as it works through each legislative body. The final budget will likely not be known until the last day of session.

Both the Senate and House Finance Committees will take public testimony on the budget. I hope you will have the chance to offer your thoughts on it during that time. Please contact the Legislative Information Office near you for more information on committee schedules, and information on how to take part in the public testimony process.

As always, I welcome your input on the FY ’19 budget, and any other matters coming before the legislature.

Committee Assignments for 2018

This year, I will serve as chair of the Senate Education Committee, and chair of the Senate World Trade Committee. I am also a member of the Senate Labor and Commerce Committee, and the Senate Finance Committee, which includes chairing the finance subcommittees responsible for the Education, Administration, and Judiciary budgets.

As a past national chairman of the Council of State Governments, I will continue serving on the organization’s executive committee and board of directors.

State Boards and Commissions

I hope you will consider lending your time and expertise to your fellow Alaskans by serving on one of the State’s boards and commissions. You can find out more about these panels online at You can also call the Office of Boards and Commissions at (907) 269-7450, and email them at

Permanent Fund Dividend Filing Period Begins New Year’s Day

The 2017 Permanent Fund (PFD) application opens Monday, January 1st at 9:00 a.m. and closes Saturday, March 31st. Again year, the Permanent Fund Division encourages you to apply online at, which I have found to be a very quick and easy process.

If you plan to file online, please do not forget to make a printed copy of your application for your records. If you file an application by mail, I urge you to send it by certified mail with a return receipt to ensure its arrival at the Permanent Fund Division office. Above all else, please double-check your application to make sure that all of the questions are answered accurately, and please do not miss the March 31 filing deadline, as applications not received or postmarked by that date will be denied as late.

For more information on the application process or eligibility questions, please contact the Permanent Fund Dividend Division at 907-269-0370.

Legislative Information Offices Available to Assist You

Senate District P is served by LIOs in Cordova, Homer, Kenai and Kodiak. These offices can help you follow bills and resolutions through the legislative process, participate in teleconferences, and contact legislators.

The Cordova LIO can be reached at 424-5461 and email at

The Homer LIO can be reached at 235-7878 and email at

The Kenai LIO can be reached at 283-2030 and email at

The Kodiak LIO can be reached at 486-8116 and email at

Office Schedule for the Remainder of the Interim

As we transition to Juneau for session, the District P Kodiak office will be closing Wednesday, Jan. 10 and reopen in the spring. Our Capitol office is open throughout the year.

Please give us a call if you need assistance with issues involving state government. The number in Kodiak is 907-486-4925. Contact us toll-free in Juneau at 1-800-821-4925.

You can e-mail me at:

Thank you to Senate District P’s media for giving me the opportunity to share this information with you through the Interim Report. My session column, the Capitol Report, will resume in late January.

On behalf of myself, my wife, Rita, my family, and the District P staff, I wish you a very happy and prosperous new year.

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Sen. Gary Stevens is the Republican senator representing District P in the Alaska state Senate. District P includes Kodiak Island, Cordova, Homer Anchor Point, Kasilof, Ninilchik, Yakutat, Seldovia and Tyonek. He can be reached at Call him in Kodiak at (907) 486-4925 or in the Capitol building at 1-800-821-4925.