APRIL 22, 2016
Representing District 17:
Midtown, University, and East Anchorage
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Juneau, AK 99801
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The Outstanding Issues
Dear Friends and Neighbors,
Rep. Josephson and Rep. Herron listen during a House Resources meeting
We are now 95 days into the second session of the 29th Legislature and there are still a number of issues that have yet to be resolved. These include the Omnibus Crime Bill (SB91), the Operating and Capital Budgets, a new plan for drawing from the Permanent Fund Earnings Reserve (SB128 & HB245), and a revision of our generous Oil and Gas Tax Credit System (HB247). At this time, most other legislation is essentially dead and the majority of the attention has been focused on these key issues. (Some bills, like the Campus Carry Bill could always resurface, however).
All of these issues were before us at the beginning of the session and the House even passed HCR23, which restricted committees from hearing bills that were not budget related, but still we find ourselves passed the voter-mandated, statutory deadline (90 days) again.
Now the construction has begun on the Capitol Building and most of the computer equipment and files have left and have headed back to the home districts of the many different legislators. There is still some optimism in the building that we will finish before the May 2nd deadline when we have to be out of the building, but I have a feeling a special session will be called.
The Operating Budget passed the House on March 10th and passed the Senate on March 14th. Since there were differences in the bills, conference committees were appointed to work out those differences and bring forth a bill to pass both chambers. Apart from accepting a massive $50 million cut to the University of Alaska (5-1 vote; Rep. Les Gara D-Anchorage was the only ‘No’ vote on the committee), the conference committee has done little so far.
The Capital Budget has still not passed the Senate and it is still unclear what all will have to go into that budget. The Senate and House Majorities will need to use the Capital Budget if they choose to buy the LIO since there is no money provided for it in the Operating Budget. There is also very limited money included in the Operating Budget for oil and gas tax credits, which means that the Capital Budget might also be the vehicle for those as well.
Oil and Gas Tax Credits
Speaking of oil and gas tax credits, HB247 is still being held in the House Rules committee after it was amended on the floor to the point that it did not have enough support to pass the House. There are many different sides of this issue and not just the ones between the Majority caucus and the Independent Democratic caucus. There are those that are concerned that changing the credit system will bring uncertainty and affect future investments by oil and gas companies. That is a valid argument, but our current system is unsustainable and it will bring even more instability to the industry if Alaska defaults on payments in the future. We have to find a balance between encouraging investment and generating revenue for the state.
The House Rules committee has been scheduled to take up the credits bill for the last couple of days, but has not met. I would expect to see a new version of HB247 come out once they do gavel in. I am very interested to see how it will balance the concerns of all the different groups.
At the end of the first session, Senator McGuire introduce SB114, which would allow for a draw from the Permanent Fund earnings reserve to help fund state government. Governor Walker also introduced his own version of the plan as a part of his fiscal package last fall. Just the other day the Governor invited all of the legislators and their staff to attend a presentation at Centennial Hall to discuss the plan and to answer any questions that they may have. It was relatively well attended, though I will say I wish more of my colleagues would have joined.
I am personally hesitant to draw from the earnings reserve until I am sure that Alaskan’s will not be giving up their dividends to help pay for oil and gas tax credits that the state simply cannot afford. That is, but one, consideration in my vote.
As always, please call or email with any thoughts, ideas, or concerns.
I Answer to You!
Representative Andy Josephson
State Capitol Bldg., Room 430