Reliance on oil production is not a long term solution

Finding a way forward with a sustainable fiscal plan must happen this year

Rep. Louise Stutes, House District 32

Greetings from Juneau,

The House Finance Committee is working its way through the 96 amendments on the operating budget, and I expect to see it on the House Floor late this week or early next week. I have to say, we are really seeing the effects of the “cut more” philosophy. While it sounds good, the services we rely on across Alaska are noticeably reduced. Roads are getting plowed slower or not at all, our marine highway system cannot set an advance schedule for the busy season (more on that below), there is reduced funding for fisheries research and weirs, and our schools are operating at a funding level that has not kept up with inflation for the last 10 years.

We are at the very real and tangible line in the sand where we must realize that our reliance on oil production and price-per-barrel is not a long-term solution. Unfortunately, “a hope and a prayer” is not enough to get us through hard times. While I appreciate many of the cuts that have been made in the last few years and agree that an efficient government is a lean government, we all must now understand that trimming the fat is one thing and cutting off limbs is something else entirely.

A byproduct of this kind of thinking is the need for the fast-track supplemental budget which passed the House on Monday. While a supplemental budget is an annual occurrence, this year (and the reason it is referred to as “fast-track”) it is filled with emergency items including $24 million to allow the Alaska Marine Highway System to operate beyond mid-April of this year. Additionally, $30 million was inserted for Community Assistance; $5 million for the AK Permanent Fund’s external management fees; and $4 million for the Disaster Relief Fund.

I’ve heard it stated by legislators that we probably won’t hear anything on a broad-based tax because it’s an election year. I would argue that every year is an election year and we can’t use elections to justify not doing the right thing for the State of Alaska.

Passing a responsible budget without incapacitating vital state services and finding a way forward with a sustainable fiscal plan must happen this year. I believe that all 60 of us representing every community in Alaska want what is best for our state, and I am hopeful that the legislature can reach agreement in these final weeks of session.

Transportation
On Thursday, March 8th, the House Transportation Committee heard from proponents of the Alaska Marine Highway Reform Initiative where it was requested of the committee to draft and sponsor legislation establishing the Alaska Marine Highway Corporation. With a vote of 5-2 in favor, legislation is now in the works that would transform the Alaska Marine Highway System(AMHS) into a public corporation. In my opinion, the argument for this transition is simple: stability is next to impossible with an ever-changing legislature effectively controlling annual operations for AMHS.

As we saw on Monday in the fast-track supplemental budget, the legislature has not been very good at anticipating operating costs for AMHS, and this only hinders ridership and cost recovery. Creating a public corporation would take AMHS out of the political arena and allow for stable planning.

My friend and co-chair, Rep. Adam Wool made a great point during the meeting last week in which he questioned whether the success of the Ted Stevens International Airport would be possible were the legislature in charge of operations. I suspect it would not be.

There is no question we have a long road leading to the establishment of a public corporation for AMHS, and I’m glad to report that the legislature is beginning that journey.

Fisheries

Last week, the House Fisheries Committee passed out the following bills:

HB386 By Rep. Paul Seaton
This legislation seeks to remedy an increase in vessel abandonment and derelict vessels by bringing in line the ownership of a vessel to that of other motor vehicles requiring a title, registration and vehicle number.

HB231 by request of the Governor
HB 231 would reduce the number of commissioners on the Commercial Fisheries Entry Commission (CFEC) from three to two and would better align CFEC with comparable commissions by adjusting salary levels of commissioners and changing the employees over to classified status from exempt. This puts them under collective bargaining agreements and unionizes them.

HB354 by Rep. Dan Ortiz
This bill is necessary for the Southeast Alaska Regional Dive Fisheries Association, the only dive fishery association in the state regulated by AS 43.76.150-210, to amend the process undertaken to modify the tax on the geoduck, sea cucumber and sea urchin fisheries it represents. Each fishery can tax itself at a different rate. At present, a majority of permit holders are required to initiate the petition to change an assessment tax and then vote on the change. Many of the permits are nontransferable and less than half of the CFEC permit holders in these fisheries are actively participating in said fisheries. Due to the low involvement of permit holders, a majority participation of permit holders is unrealistic. The proposed legislation allows for a change in assessment tax to be initiated by a ¾ vote from the Board of Directors and the vote to accept the change pass with a majority vote of permit holders participating in the vote.

 

HB379 by Rep. Dan Ortiz
In 2010, the Legislature amended the Fishermen’s Fund statute to allow a vessel owner to receive 50% of the owner’s Protection & Indemnity insurance deductible from the fund in cases where an injured crewmember made a claim against the Fund and against the P&I policy. The intent of this amendment was to encourage vessel owners to obtain P&I insurance to fully cover crewmember’s medical expenses in the event of an injury, and to reduce the financial burden on the State. HB 379 seeks to allow an owner to fully recover the P&I deductible from the Fund up to an amount of $5,000. This would provide further financial incentive for vessel owners to obtain P&I insurance to fully cover crewmembers in the event of an injury or illness at sea.

Fisheries News


I have some exciting fisheries news to report.

A few weeks back, I reported that myself and Senator Stevens wrote a letter to the Board of Fisheries asking for reconsideration of Proposal 165, as amended by RC 331, at a recent meeting in Sitka. This proposal closed commercial fishing on a significant portion of the Tsiu River.  Despite being introduced and noticed as a housekeeping measure, what ultimately passed was a large shift in allocation.

I am very pleased to announce that due to a large volume of public support, the Board passed RC 65 by a vote of 4-2 at its March 6th-9th meeting in Anchorage. This established a board-generated proposal to revisit the issue at a special meeting to be held on April 24th in Anchorage. I applaud this vote by the Board. The proposal will now go out for 30-day public notice and will then be addressed at that meeting well ahead of the upcoming Coho season.

This issue affects Cordova in a fairly direct way as setnet permit holders in Cordova can fish on the Tsiu as well. Many thanks to Cordova District Fishermen United for adding its support of the reconsideration to the public record.

The effect the public can have through engagement in the process is a testament to Alaska’s system of resource management. Nothing is settled yet though as the Board will be revisiting the original language of the proposal. In order to make sure that the proposal stays fair for allocation on the river, we will need all the public support and comments we can get.

If you would like to submit comments or want further information on the issue, please contact my fisheries aide, Matt Gruening, at Matt.Gruening@akleg.gov or head to the Board of Fisheries website: http://www.adfg.alaska.gov/index.cfm?adfg=fisheriesboard.main

I am also very excited that Governor Walker and Lieutenant Governor Mallott wrote to the U.S. Department of Commerce requesting a fisheries disaster for 2018 Gulf of Alaska Pacific Cod Fishery. They also Cc’d our congressional delegation. I have included the text of the letter below:

March 8, 2018
The Honorable Secretary Wilbur Ross
United States Department of Commerce
1401 Constitution A venue, NW
Washington, DC 20230

Re: Federal Fishery Disaster

Dear Honorable Secretary Ross:

In accordance with Section 312(a) of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), we are writing to request that you declare a fishery disaster for the 2018 Pacific Cod Fishery in the Gulf of Alaska. The MSA authorizes the Secretary of Commerce to determine if a commercial fishery failure has occurred, and we ask your soonest possible review of this matter due to the importance of these fisheries to local, regional, state, and national economies.

Harvest opportunities are significantly limited because the 2018 Pacific Cod total allowable catch for the Gulf of Alaska was reduced by 80% compared to 2017. Due to the severely reduced catch limits, several directed Pacific Cod Fisheries were preemptively closed. Remaining Pacific Cod Fisheries throughout the Gulf of Alaska have performed poorly resulting in drastically reduced value. Due to poor fishery performance and low catch limits, value of the 2018 Pacific Cod harvest is expected to be $7 .0 to $8.0 million, or an 81 % to 83% decline in revenues from the most recent five-year average.

Throughout the Gulf of Alaska, direct impacts will be felt by vessel owners and operators, crew, and fish processors, as well support industries that sell fuel, supplies, and groceries. Local governments will feel the impact to their economic base and the State of Alaska will see a decline in fishery-related tax revenue. We believe these impacts are severe enough to warrant this request for fishery disaster declaration for this area, and have directed the Alaska Department of Commerce, Community, and Economic Development and the Alaska Department of Fish and Game to provide National Marine Fisheries Service and your office with any additional information needed to make a determination.

We appreciate your prompt attention to this matter.
As we have experienced with the pink salmon disaster, the road to securing federal disaster funding can be long and tenuous. Nonetheless, I am happy that the Governor’s office took this important first step.

My office has been communicating frequently with Senator Murkowski’s and Sullivan’s office over the last few weeks to get you some solid information about when our district can expect distribution of pink salmon disaster relief, how to apply, and how much of a share we will receive. Please remain patient as we try our best to sort through the quagmire that is the federal process. I will update you about this, as well as the status of the Pacific Cod request as I know more.

SWAMC
Last week I was happy to be able to attend and speak at the annual Southwest Alaska Municipal Conference (SWAMC) in Anchorage. It is always an interesting conference focusing on coastal issues and setting priorities for our diverse region of the state. It was great to see so many old friends, many of whom I only get to see once a year at SWAMC!

Public Testimony
Every Friday, I post the legislative schedule for the following week to my facebook page. Your input is crucial in the crafting of legislation and I want to encourage you to check the schedule at the end of each week so you do not miss any chances to testify.

If you would like to take part in any of the public testimony opportunities on any bills of interest, please let my office know by calling 465-4648, or by emailing me at Rep.Louise.Stutes@akleg.gov

All meetings can be viewed at www.akl.tv

As always, please contact me and tell me how you feel. 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.

Sincerely,

Louise Stutes

State House Representative for District 32

Proudly Serving Kodiak, Cordova, Yakutat, and Seldovia

Rep.Louise.Stutes@akleg.gov

(907) 465-2487

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