$288 Million Found and Given to… (Drum Roll Please)
May 17, 2017
Dear Friends and Neighbors,

It’s day 121 of the regular legislative session but plenty of work and negotiations remain undone. The conference committee on the operating budget has yet to meet for substantive purposes, the capital budget is in the House Finance Committee, the House and Senate remain at an impasse on oil taxes and worst of all, there is no comprehensive, sustainable fiscal plan. The plan is to gavel out tonight and come back in Special Session called by the Governor to start at 11:00am with budgets and all fiscal proposals on the table. 

Funding the State of Alaska: The Senate passed a capital budget on Thursday, May 11.  In her speech on the Senate floor, the Co-Chair of the Senate Finance Committee, Sen. Anna MacKinnon (R-Eagle River), mentioned they happened to find $288 MILLION in our Statutory Budget Reserve! Guess where they chose to use it? Not to fund education, the university, seniors, or the neediest – all of whom have already suffered cuts under the Republican plan. It went to the oil industry to pay discretionary tax subsidies.  All of it, even though $74 million had already been budgeted to oil companies. While Alaska teachers are receiving pink slips, I find this action unconscionable and reprehensible. The Senate Democrats proposed amendments to strip this appropriation and use this found money to fund our constitutional obligations and essential services like education, and the Pioneer Homes. Those all failed. I could not support this budget because of that. This budget does not reflect my values, or the values of most Alaskans. It only reflects the values of special interests.

The differences between the House and Senate versions of this operating budget will be ironed out in a conference committee co-chaired by Representative Paul Seaton and Senator Lyman Hoffman.  Other members include Reps. Foster and Pruitt and Senators MacKinnon and Olson.  The committee met on May 15, but as of today, has no future meetings scheduled.

The priorities of the Republican-led Senate majority are not in line with the priorities of Alaskans and are not in the best interest of our state.  They favor large oil companies, hurt Alaskan children, seniors, and all citizens by failing to produce stable and adequate funding for public services.  The actions we’ve seen, especially in these final days, send a clear message that the Senate Republican-led majority has no interest passing a complete fiscal plan. They have said so themselves. 

Income Tax Failed to Pass the Senate: This proposal, HB 115, spearheaded by Representative Paul Seaton (R-Homer), failed to pass the Senate on Friday, May 12, by a vote of 14-4.  You can watch my comments on the Senate floor below:

The Senate Republicans feel that it’s not time for an income tax.  They believe there is more we can draw down from our savings, more cuts ahead to education, seniors, transportation, health care, the university system, services for those with disabilities, etc.  When we look at the numbers provided by our non-partisan legislative finance division, one thing is very clear. They say we should not live off our savings, but in fact grow our savings to weather another potential shortfall.  And we must make changes, and diversify our economy to provide a stable fiscal future.  The House and the Governor have shown political courage in advocating and passing just such a proposal. It is truly unfortunate the Senate Majority did not share the same political courage.

Potential investors are watching our actions very carefully.  The inability and unwillingness to stabilize our economy creates greater uncertainty, which is the enemy of investment.  Republican Senate Majority members argued that implementing this tax during a recession is unwise and further lengthens the recession.  The truth is, any action we take has an impact.  The question to ask is which has the least harmful impact, and offers the best chance of closing our deficit and shortening our period of economic hardship.  The answer, according to economists and economic research conducted by the Institute of Social and Economic Research at UAA, is that an income tax has the least impact, especially on families.  Budget cuts and cuts to the PFD have some of the most significant impacts, harming more people, small businesses, and our economy 

TNC or UBER legislation back for another ride: Today the Senate pass HB 132, establishing Transportation Network Companies (TNCs) here in Alaska. The House version made some important improvements to the bill.  These include clarifying who would not be allowed to operate as a TNC driver including persons with previous criminal histories of crimes against persons, DUI convictions, or someone on the National Sex Offenders Registry.  Also included were provisions establishing a minimum age of 21 for a driver, and restricting vehicles older than 12 years from being used as rideshare vehicles. 

There were still some issues regarding local control that gave me pause and that we sought to address through amendments.  All of them failed.  In the end, I voted for this measure because I could not let “the perfect be the enemy of the good enough” on this issue.  I’m excited for Alaskans and visitors to Alaska to have more options for getting around our cities, and for the exciting opportunities for Alaskans to gain new employment opportunities.

Pink slips for state employees will go out on June 1st. I hope we don’t get to that point before we’ve answered some of these vital issues, but the differences between the House Majority’s comprehensive fiscal plan and the Senate Republicans’ lack thereof, means there is still a lot of work to be done.

In all the gloom and doom, I still have hope that we will find a way out of this quagmire.  I believe there is a path.  More on this later as things develop.  Someday, when we get home, I’ll be able to tell the whole story.  

I’m Berta and I’m listening,