Legislative Update: Cordova fares well in budget passed by Legislature

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,

I wanted to provide a recap on the budget, as well as other legislation in play during the last week of session.

The Legislature passed the budget last Wednesday, the final day of session, and adjourned sine die at midnight. As with the previous year, the operating and capital budgets were put into one vehicle, HB 281.

Overall, I am pleased with how Cordova fared in the budget. Aside from healthy Alaska Marine Highway System and Department of Fish and Game budgets, we received $21.8 million for the Cordova airport rescue and firefighting building replacement, $5.9 million for the Prince William Sound Science Center, a $200,000 reappropriation to the center that was previously vetoed, as well as $3 million for Cordova’s south harbor replacement. The Senate’s version of the budget moved to the Senate Floor with no harbor funding, and my staff and I worked hard on having an amendment offered to add $3 million back in, which ultimately passed. Your city manager, Helen Howarth, was extremely persistent in advocating for that funding as well, which helped swing support in the Senate.

HB 281 is a large budget to be sure, but it does not overdraw the Permanent Fund and allows $1 billion to be invested into our savings. The state’s operating budget is approximately $12.9 billion, with $7 billion of unrestricted general funds. The capital budget is around $2.8 billion, with $800 million coming from unrestricted general funds. Capital budgets have been practically non-existent in recent years, so I am thrilled with the jobs and other benefits the above projects will bring to Cordova.

Some major highlights in the operating budget are $711 million for the forward funding of K-12 education, $395 million to refill the Higher Education Investment Fund, a $57 million increase outside of the Base Student Allocation (BSA), as well as $299 million for school bond debt reimbursement. The school bond debt reimbursement increment included this year’s full statutory amount, as well as previous years’ vetoes.

AMHS was funded at $143.8 million, with $60 million from unrestricted general funds. Combined with the incoming federal ferry funds, the construction of the new Tustumena, and the passage of HB 322 (which I will cover later), our ferry system is headed in the right direction.  

Finally, HB 281 included a $3,200 cash payment to Alaskans ($2,550 PFD + a $650 Energy Relief Check) but I’d like to explain the process in arriving at that number.

The House included a $2,550 cash payment in its original budget ($1,250 PFD + a $1,300 Energy Relief Check) and the Senate sent back a bloated budget that contained a $5,500 cash payment ($4,200 PFD + a $1,300 Energy Relief Check).

After several days of deliberations, the House failed to concur with the Senate’s version of HB 281, and the budget was sent to conference committee to resolve the differences between the two versions. 

I know that some are disappointed that the House did not simply concur, as it would have resulted in a larger PFD. I also know that this has been a rough time for Alaskans who have struggled with the effects of COVID, rising inflation, and high fuel prices. I wish $5,500 penciled out mathematically, but it simply did not.

The reality is that the Senate’s version of the budget was an abdication of the Legislature’s fiduciary responsibly and jeopardized the services and projects that were in this budget, as well as those to be funded in future budgets. The Senate’s budget had us $1 billion into deficit spending, which would have required $1 billion in vetoes this year. Further, the budget is based on an extremely high price of oil. Once that price falls, which it will, the state (under the Senate’s proposal) would have been looking at a much larger deficit than $1 billion.

After three years of clawing back services that were cut from coastal communities during moderate oil prices, the House made the difficult but responsible choice to hold the line on reckless spending during unusually high prices.

The final conference committee report contained a $3,850 cash payment to Alaskans ($2,550, PFD + a $1,300 Energy Relief Check). Unfortunately, only $3,200 was funded as the three-quarter vote necessary to fund a portion of the Energy Relief Check failed by 1 vote. The vote required 30, but it failed 29 to 11 (I voted yes).

All that said, $3,200 is still the largest PFD in history, and the final budget is one that protects our district’s capital projects and essential services, and that positions Alaska on solid financial footing into the future.

The governor has yet to announce any vetoes to the budget, but I expect them to be sparse. I have urged the Governor to pursue early payouts of the PFD and Energy Relief Checks to get funding in the hands of Alaskans as soon as possible.

Please contact me if you have any questions or would like to talk about my votes. I am always happy to listen to and discuss your perspective.

AMHS and education legislation

I am thrilled with the passage of HB 322. This legislation, sponsored by my office and passed last Wednesday, is another critical component to restoring our ferry system. 

HB 322 protects the Alaska Marine Highway System and Vessel Replacement Funds from the constitutional sweep under Article IX, section 17(d) of the Alaska Constitution. Absent a three-quarter vote, which has impossible to achieve in recent years, those funds are swept into the CBR at the end of each fiscal year to repay outstanding debt. This legislation will remove AMHS from the yearly political battle over the reverse sweep and allow the system to bank its farebox receipts from year to year in a type of endowment fund to pay for operations and rebuild our fleet.

The bill is also a win for Alaskan students as it was amended on the House Floor to include the Higher Education Investment Fund and the WWAMI program which will prevent funding for Alaska Performance Scholarships and Alaska Education Grants from being swept as well. Students deserve to have scholarships honored by the state instead of an explanation of how the funding was “swept” into the CBR.

SB 111, the Alaska Reads Act, was also passed last Wednesday. SB 111 includes universal and voluntary pre-K, a reading intervention program, and the first BSA increase since 2016.

I advocated for a larger BSA increase, as well as a teacher retention legislation such as HB 220, but I was pleased to see this legislation come together in the last evening of session. It is an incremental step to address issues in our education system but an important one, nonetheless.

I remain optimistic and resolved that further progress on the BSA, as well as teacher retention, can be made next year.

Other legislation:

HB 308-DEMENTIA AWARENESS & HEALTHCARE CAPACITY also passed last Wednesday. Alaska has the fastest growing senior population in the country, and the number of families living with Alzheimer’s and other forms of dementia is only continuing to rise.

The bill creates a dedicated program within the Department of Health to address early detection and diagnosis, as well as build in and out-of-home healthcare capacity for the best quality of life for our loved ones. I am proud to be the sponsor of this legislation.

Work-in-Progress:

I am disappointed that HB 64-FISHERY DEVELOPMENT ASSOC.; ASSESSMENTS and HB 28-REGISTRATION OF BOATS: EXEMPTION met an unceremonious end in their final committee of referral in the other body, Senate Finance.

Modeled for fisheries like Cordova tanner crab, HB 64 would have allowed voluntary self-assessments in developing commercial fisheries to help fund surveys and expand opportunity. HB 28 would have exempted Commercial Fisheries Entry Commission (CFEC) registered vessels from duplicative registration requirements at the DMV.

The Department of Public Safety confirmed with me that troopers will not be citing CFEC registered vessels for failure to register with the DMV for the remainder of the season. Please let me know if you are issued a citation and I’ll make sure that it gets taken care of.

HB 26-CONFLICT OF INTEREST: BD FISHERIES, unfortunately, did not make it over to the Senate.

I plan on bringing all three fisheries bills back next year to pursue them again in earnest.

The failure of HB 234-POLITICAL CONTRIBUTION LIMITS — to move off the Senate Floor last Wednesday should be lamented. As it currently sits, Alaska has no campaign contribution limits. If there is one piece of legislation that didn’t pass but should have, this was it. Getting campaign contribution limits in place must be a top priority of the next legislature.

All-in-all, this session was a success for Alaska and, just as importantly, for Cordova

There was legislation I wish had passed and some I wish had not, but you can’t win them all. In the end, the Legislature set partisan division aside, enacted legislation that improved the lives of Alaskans, and passed a reasonable budget that invests in essential services and capital projects, provides a cushion of savings against optimistic revenue projections, and gives Alaskans the largest PFD in history. They say a good compromise is when both parties aren’t satisfied, and this is one of those instances.

I am very proud, in particular, of how far the House has come these past two years in terms of civility, decorum, and statesmanship.

My next update will cover what I see as the top priorities for District 32 during the interim and for next session.

I’ll be in Cordova for Copper River Nouveau next Friday and Saturday and am looking forward to seeing everyone. Senator Stevens and I will be hosting a legislative open house next Friday. I’ll update the LIO and the online paper once a time and place have been determined.

As always, remember that 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.

  • Louise Stutes