JUNE 23, 2016
Representing District 17:
Midtown, University, and East Anchorage
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Anchorage, AK 99501
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The End of Special Session
Dear Friends and Neighbors,
Rep. Josephson speaks during the last day of the Special Session
They say when one door closes, another door opens. Apparently the same holds true for special sessions in Alaska because as soon as the Legislature adjourned the Governor called us back to Juneau for the 5th special session of the 29th Legislature. You can read Governor Walker’s proclamation here. (Note that, one new addition to the “call”—the bills before us—is a sales tax. I’m not sure this is an especially good sign, but am willing to review the idea).
During the last special session the Legislature passed a budget, but that budget did not include any new revenue and required a large draw from the Constitutional Budget Reserve. This is the main reason why Governor Walker called the Legislature back. The Governor had put forth multiple tax measures before session began, but none of them could pass the House and most were never considered by the Senate. All of these taxes will be on the call for the next special session along with a sales tax.
The biggest of these new revenue measures involves restructuring the Permanent Fund into an endowment account that would allow for sustainable draws from the Permanent Fund Earnings Reserve Account to help pay for government services. That restructuring legislation, SB128, was voted on in the Senate and passed by a vote of 14-5, but was unable to make it out of the House Finance Committee when it failed to garner the six votes needed to advance to the House floor.
The Governor just recently received the budget from the Legislature and he will likely take a hard look at it with his veto pen in hand should we fail to act during this next special session. I will be heading back to Juneau come June 11th to continue to work to find an answer to Alaska’s budget problems, but I believe that there is a lack of focus and motivation from the current legislature to take any real action.
SOME FURTHER CANDOR FROM YOUR LEGISLATOR
My caucus wants, to coin a phrase, a fair and balanced fiscal plan. We don’t take the position that only one such plan exists. We are flexible in this regard. However, the House and Senate Leadership did not accept our invitations (as proposed by a Ways and Means Committee and/or a Caucus of the Whole), to hash-out something workable for all. That was unfortunate.
My caucus first wanted true oil and gas tax credit subsidy reform. This failed when a bi-partisan measure passed by the State House was not accepted by the State Senate. This was the most painful let-down of the session for me, as I had been integrally involved in the reform effort.
Failing that, my caucus wanted everyone to feel some pain—everyone to contribute-- in what remained of the Governor’s fiscal plan. However, in the end, the only measure that seemed to be moving forward was a Permanent Fund Restructuring with Permanent Fund Dividend Reform bill. The risk of these reforms is that, once the dividend was cut, and Permanent Fund Earnings began to be used to finance government, the budget would close to such a point that –not wanting to raise taxes on industry and lacking the courage for other revenue measures—no further reforms would happen in the near term.
Still, my colleague, Rep. Les Gara (Anchorage-Downtown), worked hard to improve the Permanent Fund Restructuring bill (SB 128), by:
1) Lifting the impacts of a spending cap that would stop legislators from engaging in a debate about the proper role of government, what’s affordable, what isn’t, etc. This cap could have suffocated funding for public education, for instance.
2) Increasing the dividend over the Senate’s version from $1,000 to $1,500.
3) And linking future, larger dividends to the oil and gas production tax.
This measure, as noted above, failed in a 5-6 vote and the bill never reached the House Floor.
As always, please call or email with any thoughts, ideas, or concerns.
I Answer to You!
Representative Andy Josephson
State Capitol Bldg., Room 430