Legislative Update: Operating budget now in hands of Senate; other bills under consideration

Dear Friends and Neighbors,

I wanted to update you on the operating budget, Board of Fisheries confirmations, as well as other bills under consideration by the Legislature.

Budget Picture

Last Saturday (April 9) the House passed HB 281, the operating budget, by a vote of 25-14. It is now under consideration in the Senate.

The bi-partisan process during budget amendments on the House Floor was extremely refreshing. Majority and minority members resoundingly voted to rule 20 unconstitutional amendments (18 of which were sponsored by one minority member) out of order. Last week, statesmanship prevailed over partisanship, and the process in the House was respectful, efficient, and resulted in a good product.

This year, Alaska’s budget picture looks quite different. With a windfall of revenue from high oil prices and one-time federal funding, paying this year’s bills isn’t the immediate concern.

However, Alaska has experienced firsthand the volatility of oil, we have overspent during times of plenty, and it is worth noting that nothing has fundamentally changed about our fiscal reality. The state still lacks revenue diversity, it will be back in deficit spending once the price of oil drops, and the tough decisions on a fiscal plan and the Permanent Fund Dividend (PFD) have yet to be made.

Although I remain a staunch advocate for a comprehensive fiscal plan, it simply isn’t a political reality this session.

As such, my focus has been on an operating budget with robust essential services, investments in education, infusions to our savings accounts, as well as strong community support in the capital budget.

So, what’s in HB 281?

For starters, the Alaska Marine Highway System (AMHS) is funded with $59 million in state funding, for a total operating budget of $141 million. This is a vast improvement over recent budgets. Moreover, AMHS is set to receive $200 million per year over the next 5 years from the federal infrastructure bill, which presents an opportunity to rebuild our fleet, bank farebox receipts for future operations, and augment winter service.

With this progress, the newly formed Alaska Marine Highway Operations Board, and the construction of the new Tustumena, the future looks bright for AMHS.

Education is a primary focus of the House Majority Coalition and that is reflected in the operating budget as well. K-12 education is fully funded this year and forward funded at $1.2 billion next year. There is a $57 million bump in one-time K-12 funding, $395 million to restore the Higher Education Investment Fund, a $5 million increase to pre-K funding, and the School Bond Debt Reimbursement and Community Assistance Programs are fully funded.

HB 281 invests in our savings with deposits of $2.2 billion to the Statutory Budget Reserve and $1.2 billion into the corpus of the Permanent Fund.

With 14 new trooper positions and 10 VPSOs, public safety is a focus in the budget as well.

It is also important to remember that after two years of COVID, Alaskans are suffering from the negative economic impacts of business closures, decreased work hours, and other missed opportunities. 

Recognizing this, increasing fuel prices, and the fact that the state is in a position to help this year, the House Majority has taken the lead by including a one-time $1,300 energy relief check to Alaskans in addition to this year’s PFD. 

And finally, the budget contains a $1,250 PFD for every eligible resident. I have asked the Governor to pursue early distributions of both checks.

Other noteworthy items include $18 million for AMHS vessel replacement, $31 million for community assistance, $1.5 million to public broadcasting, as well as $1.6 million to attract medical professionals to a wider swath of Alaskan communities.

My main concern in HB 281 is the inclusion of $4.9 million for the state to assume primacy of 404 wetland permitting from the federal government. Aside from my obvious consternation over adding 28 positions in the Department of Environmental Conservation, there are significant concerns that this would lead to the fast-track permitting of largescale mines, such as Pebble.

Although I am generally supportive of streamlining regulations and permitting, the implications on Bristol Bay fisheries, particularly with this governor’s stance on the Pebble Project, is all I need to know. I am keeping a close eye on this provision as the budget moves through the process.

Those concerns aside, the operating budget is a document that I am proud of. It doesn’t have everything I want, but it’s a fair compromise. It supports the essential services that Cordova relies on by investing in education, public safety, fisheries management, and AMHS. Finally, it provides much-needed relief to individual Alaskans while still living within our means and rebuilding savings.

Over the coming weeks, HB 281 will be considered by the Senate, amended, and passed back to the House for concurrence on the changes. At that point, a conference committee consisting of members from both bodies will be appointed to resolve the differences between the two versions of the budget. I will update you on any major changes as the bill moves through the process.

Board of Fisheries

I am very pleased with governor’s recent appointments of Cordova’s very own Tom Carpenter, as well as Mike Heimbuch of Homer to the Board of Fisheries.

Carpenter, who was appointed to fill Gerad Godfrey’s seat, was a driftnet permit holder for 15 years, has seined for herring and salmon, and currently serves as the chairman of the Prince William Sound Aquaculture Corporation Board. I met with the governor multiple times in support of Tom, and I’m thrilled with the appointment.

Heimbuch, who would fill the vacant seat, is a gillnetter and current CFEC permit holder.

Given the trend in recent years, this is a great step towards returning balance for commercial users on the Board of Fisheries.

With broad support on both sides of the aisle, I anticipate both individuals will be confirmed by the Legislature. I will update you on Facebook when the appointees are scheduled for public testimony before the House Fisheries Committee.

Education Legislation

As previously mentioned, improving our education system is a top priority. Aside from increments in the budget, the House Majority is pursuing increases to the base student allocation (HB 272 and 273), as well as teacher retention legislation (HB 220).

As I write this, it is Tuesday, April 12. HB 229, which would protect the Higher Investment Education Fund from the reverse sweep, is on Wednesday’s House Calendar. Additionally, the Senate passed SB 111-the Alaska Reads Act over to the House this morning. Both the Senate and House have committed to passing legislation improving our K-12 education system.

What exactly that will look like and which bill, or combination of bills, will be the vehicle(s) remains unknown. However, I expect additional education funding and reform, beyond what you see in the current operating budget, to come to fruition in the final adjournment package.

AMHS Legislation

I am currently sponsoring HB 322-AK MARINE HWY SYSTEM VESSEL REPL. FUND, which would protect the AMHS Fund and Vessel Replacement Funds from the reverse sweep.

The idea behind this legislation is that the farebox receipts will continue to build in the AMHS Fund year after year, as a sort of endowment fund, while we rely on a mixture of state and federal appropriations to operate the system. This bill would assist AMHS in getting back on its feet, and I am hopeful to get it passed this year.

Infrastructure Bill and the Capital Budget

The governor recently introduced HB 414, which is the administration’s proposed Infrastructure Investment and Jobs Act bill. All I can say is that the legislature is just getting its first look at this bill and will be amending it substantially.

The capital budget is currently being worked on in the Senate. I am working diligently with my counterparts to ensure that rural communities are not left behind, but in particular, to secure funding for Cordova’s harbor, as well as language amendments for a $5.9 million appropriation to the Prince William Sound Science Center.

At this point, I am optimistic that both items will be in the budget.

I am out of space this week, but I will provide a short update next week with more detail on the infrastructure bill, as well as the capital budget.

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