Legislative Update: Our fiscal reality remains fundamentally unchanged

Dear Friends and Neighbors,

I hope this update finds you well and in good spirits.

The budget process is underway in Juneau, and I wanted to provide a quick update.

Opportunity knocks. Let’s take advantage

With an influx of billions of federal dollars and the price of oil at over $80 per barrel, the next few legislative sessions represent a generational opportunity for Alaska.

We have the opportunity to rebuild our marine highway fleet, repair our aging schools and infrastructure, invest in fisheries, education and public safety, and all the essential services that make coastal communities a great place to live, work, and raise a family.

During times of plenty, it can be difficult to remember the mistakes of the past or look to the future. The fact is that our fiscal reality remains fundamentally unchanged: Alaska still lacks revenue diversity, we remain in deficit spending, and the tough decisions on a fiscal plan and the Permanent Fund Dividend (PFD) have yet to be made. Moreover, oil that goes up must come down and the federal funding is a one-time opportunity.

The Capital Budget has been non-existent in recent years and state support to our communities has been waning.

The issue before the Legislature is whether to invest these new gains in infrastructure, economic development, and Alaskan communities, or whether to squander them on short-sighted budgeting and kick the can down the road yet again. 

The governor’s proposed budget embraces the latter concept. As a one-year snapshot, it appears reasonable. Services are generally funded at levels that Alaskans can support and there are two large PFD payments; however, it accomplishes that through a misuse/reliance on federal dollars, a spike in oil prices, maintaining deficit spending, and, in general, by showing a lack of fiduciary concern for the future.

The proposed Alaska Marine Highway System budget is a perfect example. Service levels are adequate (fall and winter service still need improvement), but upon closer inspection, most of the operational funding comes from a new federal program that expires in five years. I don’t want to see Cordova fighting to restore winter service in the budget, yet again, when the federal funding goes away. AMHS needs to be funded with state dollars, and federal funding should be used wisely for vessel replacement and repair, as well as increased winter service. I am pleased to say that I am back on the House Transportation Committee as of yesterday and am looking forward to holding DOT’s feet to the fire on this one.

The Alaska House Majority’s position on the budget remains grounded in fiscal conservatism. We firmly believe in seizing this one-time opportunity provided by our congressional delegation to ensure that short-term gains are realized into long-term success for Alaska. 

Yes, our bottom line has improved, but we’ve seen these swings before. Our district, and the state as a whole, need a 10-year plan, not a 10-month plan.

I will be sure to update you on public testimony opportunities as the budget moves through the committee process. As usual, my primary focus will be on the AMHS and ADF&G budgets.

Please monitor my Facebook page at facebook.com/replouisestutes for regular updates on public testimony, issues important to our district, and other legislative happenings.

In my next update, I will be breaking down the AMHS and ADF&G budgets in detail, discussing work towards a fiscal plan and the PFD, and covering the next steps in the process for the newly declared fisheries disasters.

Remember, I work for you. Please do not hesitate to contact me on any of these issues or anything else important to you and your family.

Sincerely,

Louise Stutes