Ferry service, education and raw fish tax funds at stake

Dunleavy administration continues to view AMHS as expendable

Rep. Louise Stutes speaks during the crab dinner at the Reluctant Fisherman on Saturday, March 24, 2018. (Photo by Emily Mesner/The Cordova Times)

Dear Friends and Neighbors,

As we approach day 120 of session, I wanted to update you on the status of the budget, crime and the Permanent Fund Dividend.

As I write this, it is Monday, May 14. Last week, the conference committee was appointed on the operating budget and the first meetings were held. For anyone unfamiliar, a conference committee is comprised of members from the House and Senate appointed to negotiate the differences on a particular bill.

Although there are many, three of the most pressing concerns for our district in the budget are ferry service, education, and the governor’s proposed repeal of the municipal share of the raw fish tax.

Ferry

As you know, the Alaska Marine Highway System’s (AMHS) funding has been under constant attack this budget cycle. Through its proposed budget, the administration has made it clear that it views our ferry system as an expendable fleet of equipment instead of the vital piece of transportation infrastructure that it is.

The governor proposed $97 million in cuts, which would only have funded ferry operations through October. The House begrudgingly passed $13 million in reductions, while Senate’s version of the operating budget cut a whopping $44 million. There are a lot of negotiations occurring on a daily basis between the House, the Senate, and the administration to find an amount that the governor will not veto that also ensures continuing ferry service. I understand that Cordova needs dependable, year-round service and am doing everything in my power to keep as much of the funding intact as possible.

Education

Regarding education funding, there are two major items in play: last year’s forward funding of K-12 education and the state’s school bond debt reimbursement program. Last year, to avoid a situation like this, the Legislature passed a two-year budget for education funding. The administration is now taking the stance that the forward funding of education was unlawful. Our attorneys strongly disagree, and both the House and Senate are standing our ground regarding our commitments to K-12 education. I do not believe the governor has the legal or moral high ground, nor the votes to win on this issue.

The school bond debt reimbursement is another important issue to our school district, municipality, and property owners. Under this program, the state reimburses local governments for 60 to 70 percent of the debt incurred to work on schools. The city of Cordova currently has about $9.5 million in outstanding school bond debt. The governor’s proposals would have eliminated that program entirely, adding over $962,072 in additional debt payments to the city in FY19, which would result in less services and/or tax hikes. The House added 50 percent of the funding back into the budget and the Senate added the remaining 50 percent. As it currently stands, both the Senate and the House strongly support retaining 100 percent funding for this program. The governor has the option to veto the funding, but both the House and Senate are in agreement, making that unlikely.

Fish tax

The governor’s repeal of the municipal share of the raw fish tax, HB 65, is another area of great concern for fishing communities. Under this proposal, the city of Cordova would lose $1,429,951 in revenue this year. Again, this would result in lost service and/or tax increases. Luckily that bill was referred to a committee I chair, and I can assure you that it will not be moving on to its next committee. Again, even with the bill stopped, the governor can attempt to veto the appropriation itself from the budget. As with the previous two issues, however, this proposal is strongly disliked by both bodies and I am hopeful that the votes would be there for a veto override.

A positive note out of conference committee is the survival of our district’s comfish projects. Specifically, $50,000 for Prince William Sound Tanner crab surveys, $189,000 for the Prince William Sound Otolith (Coded Wire Tag) Program, $200,000 for weir operations in Kodiak and Chignik, and $40,000 for additional areal salmon surveys in Kodiak were all included in the Alaska Department of Fish and Game (ADF&G) compromise. These projects have had a long and tumultuous journey. They were originally excluded from the governor’s budget, but I was able to add them back in during the ADF&G budget subcommittee. The projects were again removed by the Senate, only to be included in the conference committee’s final report. I worked hard to keep these projects in the budget and am very pleased that they remained after the dust settled. They will provide direct fishing opportunities for fishermen in our district and will lead to more revenue for the state. The otolith program in particular is one that is vital for Cordova’s salmon fisheries. The conference committee on the operating budget should be concluded by the end of the week and I will update you with the results.

Crime

The rising crime rate is another issue on the minds of many Alaskans. To address that, we are taking a hard look at what was passed in SB 91 and making the appropriate revisions to our criminal justice code.

HB 49, which repeals and replaces most of SB 91, was passed by the House last Wednesday. The bill increases sentencing ranges, adds stronger penalties for drug dealers and distributors, puts in place additional tools to prosecute theft crimes, reduces limitations on theft sentences, closes sex offender and sex offender registration “loopholes,” and improves reporting on sex offenses. The bill also gives judges more discretion regarding pretrial release and custody. The legislation is now headed to the Senate for consideration. There are a number of other criminal justice reform bills being worked on by the both bodies and it is generally understood that a crime package being passed by both bodies and signed into law is a must for Alaskans this year.

PFD

The size of the Permanent Fund Dividend (PFD) and the budget are important to every Alaskan. The two are also intrinsically linked. The larger the PFD, the smaller the budget and vice-versa. The Senate included a full $3,000 PFD in its operating budget. I believe they did this less as an endorsement of that number and more to leave open negotiating room with the governor. I am confident that Alaskans will receive a healthy-sized PFD this year, but it is doubtful that the amount will settle as high as $3,000.

As a lawmaker, the size of the PFD is a very difficult choice. I understand what the PFD means to Alaskan families, particularly rural ones, and I want the amount to be as large as possible. However, it is also my duty to pass a responsible budget that maintains essential services like the marine highway system, fisheries management, a strong education system, revenue sharing and assistance to communities, road and airport maintenance, healthcare, etc.

The administration’s proposals target services to coastal communities unfairly in a single-minded pursuit of providing as large of a dividend as possible. Until we can agree on new revenue, I must support a more moderately sized PFD that allows essential services to continue. Leadership in the House and the Senate will continue to negotiate with the governor on this issue.

I know this is an uncertain time for many across Alaska. Please stay engaged, informed and remain patient. I will update you on all these issues as soon as I know more. In the meantime, remember that I work for you. Please reach out to me with your thoughts on these or any other issues that are important to you and your family.

Sincerely,

— Rep. Louise Stutes