Dear Friends and Neighbors,

I want to wish everyone happy holidays! May the celebration of Christmas and Hanukkah and the coming New Year bring you and your loved ones joy and good health. Today also marks winter solstice—the year’s single shortest day measured by length of daylight. And while Alaskans tired of the darkness can take heart today, I recently learned that we actually get more daylight in the summer here in Alaska than we have darkness in the winter. So here’s to celebrating the coming of light in Alaska.

Governor’s Fiscal Plan

Last week, the Governor released his FY2018 budget proposal that includes additional government reductions, restructuring the Permanent Fund Earnings Reserve, and re-introducing a statewide motor fuels tax. The FY2018 Governor’s total unrestricted general fund budget is $4.3 billion, which includes an unrestricted operating budget of $4.2 billion and an unrestricted capital budget of $115 million.

Since 2015, the unrestricted state operating and capital budgets has been reduced by a total of $1.7 billion, which is a reduction of over 28%. In their budget overview, the proposed FY2018 budget “reduces government agencies by $123 million in unrestricted general funds and a net $73 million cut when accounting for reclassification of the motor fuels tax. Nearly half of the reduction—$30 million—was provided by the legislatures action on Medicaid and criminal justice…the remaining cuts are from additional executive branch agency personnel cost reductions resulting from reorganizations, consolidations, hiring restrictions, healthcare premium increases, mandatory furloughs, proposed state employee pay freezes, as well as lease reductions and travel restrictions.”

In his budget proposal, Governor Walker also re-introduced a version of the Permanent Fund Protection Act. The bill creates a formula for a sustainable draw from the Permanent Fund’s Earnings Reserve Account (ERA) to provide consistent funding for government services. The calculated sustainable draw totals $2,507 million. The bill also ensures a dividend of at least $1,000 for 2017, at an estimated cost of $695 million. Governor Walker also proposed a motor fuel tax. The motor fuel tax would increase from 8 cents to 16 cents in FY2018 and to 24 cents in FY2019. The tax for jet fuel is increased from 3 cents to 6 cents, for aviation gasoline from 4 cents to 9 cents, and for marine fuel from 5 cents to 10 cents per gallon. The tax bill designates the revenue to transportation and will bring Alaska’s motor fuel tax closer to the national average of 25 cents per gallon. The estimated revenue is $40 million in the first year and $80 million in the second year.

Even with continued reductions in state spending, use of Permanent Fund earnings, and increased tax revenue from the motor fuel tax increase (a sales tax that Alaska already collects), the proposed FY2018 budget leaves an $890 million gap between spending and revenue. As we work to address Alaska’s financial challenges and work toward a responsible action plan for Alaska, we will need to consider all reasonable revenue proposals. As we approach session, I will continue to carefully review the Governor’s proposal and support his efforts to bring Alaskans together.

Community Events and Opportunities

Winter Solstice Festival

Wednesday, December 21st, 5 – 8pm at the Cuddy Family Midtown Park.

Join Anchorage Parks and Recreation for skating, sleigh rides, fat-tire biking, sledding, holiday music, bonfires, and even snow yoga. All activities are free. To visit the event page, click here.

Zoo Lights

December 15th – January 8th, 5 – 8pm at the Alaska Zoo.

The Alaska Zoo invites you to visit their lighted parade of animals nightly, seven days a week during these Christmas Break dates (closed Christmas Day). For prices and more information, click here.

Twas the Week before Christmas

December 19th – December 22nd, at the Anchorage Community Theatre.

ACT is excited to present four unique shows this holiday season. Admission to each show will be by donation, and no reservations are necessary. All shows are family friendly. To learn more about the performances and to find show times, click here.

As always, please let us know if you have suggestions or concerns.

Sincerely,

    Rep. Matt Claman

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