|Protecting Your Rights: Serving Sand Lake, Spenard, and Turnagain|
|April 30, 2016
Dear Friends and Neighbors,
On Sunday, the legislature will be 14 days into the extended legislative session and we have not reached an agreement about revenue and expenses for a state budget. The House will be considering the Criminal Justice Reform bill early next week. As the session continues, I will continue my work for a responsible action plan for Alaska.
Alaska currently faces a $4 billion budget deficit, and the legislature and Governor Walker agree that we cannot solve this challenge through spending cuts alone. West Anchorage residents strongly believe that we must responsibly address both state revenue and expenses, and we must take action this legislative session. The legislature is considering several bills that address revenue as well as the operating budget.
· Oil & Gas Tax Credits
As I discussed in a previous newsletter, Governor Walker introduced House Bill 247 to make changes to oil and gas tax credits. As originally proposed by Governor Walker, the bill creates total combined savings and revenue of approximately $500 million for next year (FY 17). Without any change, next year, the State will owe approximately $775 million in credits and incentives to the oil and gas industry. The House Finance Committee made amendments to the bill that reduced the total combined savings and revenue for next year (FY 17) to less than $50 million. The amended bill lacked enough votes to pass the entire House, and the House Rules Committee has now prepared another amended bill. According to the Department of Revenue, the most recent amended bill with produce total savings and revenue of less than $10 million in FY 17 and will have increased savings and revenue in future years. Both of the amended bills result in less combined savings and revenue than Governor Walker’s original proposal. There is a general sense in the State Capitol that the legislature will not consider the other revenue bills until after it has approved reforms to oil and gas tax credits.
On Monday, May 2nd at 9:30am, the House Finance Committee is taking public testimony on the latest version of HB 247. I encourage you to call in and share your views.
· Permanent Fund Restructuring
Permanent Fund restructuring is a key component of the proposed solutions to Alaska’s fiscal challenges. In addition to earlier proposals by the Walker-Mallott administration, Senator McGuire, and Representative Hawker, the House and Senate Finance Committee recently introduced a hybrid proposal to restructure the Permanent Fund. I reviewed the hybrid proposal in a previous newsletter. Highlights of the hybrid Permanent Fund restructuring plan include an annual dividend of $1,000 for the next three dividend years and allocation of 5.25% of the total value of the Permanent Fund to fund state government. All of the Permanent Fund restructuring bills are currently held in the House and the Senate Finance Committees and have not been scheduled for consideration by the full House or Senate.
· Motor Fuel, Fishing, and Mining Tax Increases
Earlier this month, the House Finance Committee introduced a rewrite of Governor Walker’s Motor Fuel tax billthat combined the Governor’s mining and fishing tax bills with the motor fuel tax increase. Rather than considering three separate bills, the package to increase these taxes allows the legislature to vote once on the three proposals. Since introducing the combined bill, the House Finance Committee has not held any further hearings on the bill.
· Income Tax Proposals
Both the Walker-Mallott administration and Rep. Paul Seaton (R-Homer) have introduced income tax proposals. Thus far, the House and Senate majorities have shown little interest in either proposal.
· The Operating Budget
As of March, the House and Senate had each approved an Operating Budget. Due to differences between the two budgets, we appointed a conference committee to review and reconcile the two proposals. So far, however, the conference committee has not finished its work to reconcile the two proposals. As with the various revenue proposals, there is a general sense in the State Capitol that the legislature will not finalize the operating budget until after it has approved reforms to oil and gas tax credits.
Criminal Justice Reform
On Wednesday, the Criminal Justice Reform Bill was amended and passed out of the House Finance Committee. The bill is scheduled for a vote on Monday, and I am optimistic that the Legislature will approve this important reform bill before the session adjourns.
Governor Walker introduced House Bill 200 to reform our adoption laws to protect our most vulnerable children. The bill assures that adoption proceedings for children in need of aid are conducted in a manner that will allow more children, including Native children, to find permanent care with relatives or tribal members. Governor Walker has explained that this bill is a high priority for Alaska, and he is committed to getting this legislation passed this session.
Even in the midst of Alaska’s fiscal challenges, we still must keep in mind the needs of Alaska’s children and families by passing legislation that supports stronger families, foster children, and tribal communities.
As always, please let us know if you have other suggestions or concerns.
Rep. Matt Claman
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