Senator Berta Gardner

February 18, 2015

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Serving Midtown, Spenard, and UMed

State Capitol Bldg. Rm 9
Juneau, AK 99801
Phone: 907-465-4930
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Anchorage Office
550 W. 7th Ave, Ste 1700
Anchorage, AK 99501
(907) 269-7450

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Anchorage Office
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Anchorage, AK 99501
(907) 269-7460

There is Hope

Dear Friends and Neighbors,

Senator Gardner celebrates kuspuk Friday on the Senate Floor.
Senator Gardner celebrates kuspuk Friday on the Senate Floor.

Creating a state budget is always the center of a legislative session.  This year it is especially true because of the current $3.3 billion deficit, and the projected deficits in the near future.  Alaskans should be prepared for dramatic cuts as we focus on essential services, cutting deeply everywhere else.   

Bipartisanship will be key as we make tough choices in Juneau that will affect every Alaskan in multiple ways.  My own commitment is to consider all proposed cuts and evaluate them based on goals of creating and maintaining high quality education for all Alaskan students, supporting healthy families and communities, and protecting Alaskan jobs wherever possible.  This promises to be a very difficult and ongoing process for everyone.

     The Governor has taken the first step by submitting a capital and operating budget of $5.5 billion in undesignated general funds for FY16. This is down significantly from the $6.1 billion budget passed by the previous Governor and legislature for FY15.  I’ll take some time here to give you an overview of the budget proposed by the Governor and currently under consideration by the legislature. Many changes will come as the House and Senate take their turns in revising the budget. My hope is that, in cutting the size and scope of government, we don’t go too far and push our state into a recession.

The $5.5 billion undesignated general fund budget includes operations for each department in the state, pays for formula programs like education and Medicaid, covers statewide debt service, and state capital spending. In total, the Governor’s budget proposes a 2% decrease, in general funds, from the previous year. This in contrast to the annual 6% growth rate state government saw during the previous administration in operating budgets year over year. Every department witnessed cuts and contributed to this scaledown. 329 positions were eliminated, with the majority coming from vacancies which limits the total number of people who will have to lose their jobs.

Just a few years ago, when oil prices were well above $100, the state capital budget swelled to about $1.3 billion. As oil prices fall, and we look for savings in government, the capital budget is often the first place legislators look. I applaud the Governor for freezing a number of mega projects that, while laudable in their goals, are simply too expensive to build and maintain. The projects that were cut from the previous capital budget were the Ambler Mining Road, the Susitna-Watana Dam, the Kodiak Launch Complex, the Knik Arm Crossing Bridge, and the Alaska Stand Alone Pipeline. Cuts to these projects helped bring down the capital budget to about $150 million for FY16.

On specifics for the operating budget, much is still in flux. The majority of the state’s money is spent through departments and formula programs. The Juneau Empire published an excellent infographic for the more visual of leaners that you can find at this link. Here are some highlights of programs that are seeing not insignificant cuts or reductions:

•   Cuts to the Department of Administration at $6 million, or 22 percent in overhead functions

•   Public radio/television cuts

•   Streamlining information service functions

•   Eliminating some community jail services

•   Reassigning troopers to more efficiently deliver service

•   Many reductions in travel for departments (related to streamlining IS functions)

•   Juneau Alaska Public Offices Commission office closed

•   Reduction of 8 food safety inspectors in DEC

•   Revenue sharing cut (but the fund still solvent for three years)

      •   ($57.3 million in FY16)

•   $2.7 million reduction in Tourism Marketing

•   $1 million reduction in ASMI

•   $2 million cut to Broadband Funding Program

•   Slight reductions to Best Beginnings, AK Learning Network, Parents as Teachers

•   Reduction to Digital Learning Initiative

•   One time education funding repeal

•   $1.5 million DNR Public Access Assertion and Defense Unit

•   Department of Law Endangered Species Issues - $750,000

The state also plans to see significant savings from Medicaid expansion. In the first year, the Department of Health and Social Services predicts the state will save a total of $6.1 million across multiple departments as the federal government picks up more healthcare services. The state also continues to be well situated, in the short term, with about $11 billion in our savings accounts and $52 billion invested via the Permanent Fund. What this means is that we will be drawing on savings for the forseeable future to cover state spending. Last fiscal year, that draw was almost $4 billion and this year’s will be about $3.3 billion. It’s easy to see how quickly $11 billion will be spent.  The problems we face as a state are large, but we will spend our time in Juneau working to reduce the size of government as much as possible while attempting to maintain vital services for Alaskans.

 The legislature has begun its consideration of the Governor’s budget. The House will be closing out budget sub-committees next week, and I expect the Senate to begin meeting for their budget subcommittees around the same time. This is the setting where legislators are able to dig into the budget, propose changes, and interact directly with department heads. Many changes will come from these subcommittees, and I personally expect cuts to continue beyond the 2% proposed by the Governor. I’ll do my best to keep the district up to date about changes in the budget.

           I’m Berta and I’m still listening,

           If you have any questions, please feel free to contact my office

signed: Berta

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