Public testimony and the operating budget

Dear Neighbors,

Friday marks the 39th day of Session, which means we’re closing in on the halfway point.  Read on for updates on upcoming public testimony opportunities, the latest budget developments, and several exciting programs/deadlines in my Heads Up section.

February 24, 2016: Delighted to meet students, teachers, and parents on a class visit from Haines. Especially enjoyed the smart, thoughtful questions posed.

Public testimony
Next week, House Finance will be hearing public testimony on the operating budget. If you live in a community without a Legislative Information Office, you can testify during one of the sessions for “Off Net sites.”

I have been hearing from many of you, and I appreciate your input.  From funding for the University of Alaska to access to safe and reliable sexual health information in schools, income tax, sales tax, and questions about using the Permanent Fund to pay for government services – your ideas matter and I appreciate everyone who has taken the time to call, drop in, write, and testify.  The legislature does its best work when we hear from you.  Keep it up!

Budget subcommittees
This week, the budget subcommittees are finishing up their work and “closing out.”  Budget subcommittees are sub-components of the main Senate and House Finance committees and are charged with reviewing, analyzing, and making recommendations concerning an individual department’s budgets.  I sit on the budget subcommittees for the departments of Transportation & Public Facilities (DOTPF), Education & Early Development (DEED), and Commerce, Community, & Economic Development (DCCED).  While I primarily focus on my committees, I’m also tracking programs and funding in other departments.  Here are some of the items that I’m keeping an eye on:

DOTPF: Alaska Marine Highway funding, road maintenance funding, and aviation maintenance funding.

DEED: Early childhood education, libraries and museums, rural broadband connectivity, teacher mentoring, and Mt. Edgecumbe High School funding.  I will also be tracking the Base Student Allocation (BSA) and supporting the Governor’s $50/student increment.

DCCED: Alaska Seafood Marketing Institute, Alaska Travel Industry Association, Alaska Energy Authority, Alaska Legal Services, and funding for alternative and renewable energy.

Other: Public broadcasting funding, senior benefits, Office of Children’s Services, and funding for forestry support.

February 20, 2016: Had a great time at the Filipino Community Dinner – thank you to the community for the warm welcome you extended to me and the entire legislature.

Budget
The budget is the primary focus of this year’s session, but cutting to government spending is only one side of the equation that we need to deal with—the other side is finding and carefully considering revenue-raising options that allow the state to keep providing essential services.

The FY2017 state general fund (GF) budget request is approximately $4.8 billion, and we are expecting approximately $1.1 billion in revenues.  This leaves us about $3.8 billion short of a balanced budget.  Of the $4.8 billion in GF spending, about $1.2 billion goes to education, about $850 million goes to non-expansion Medicaid (in Health & Social Services), about $1.2 billion goes to Statewide services, (including $500 million for debt service like retirement programs, and $250 million for construction like airports and highways), and the final $2 billion is what pays for every state agency providing services to the Alaskan public.   See the graph below for a breakdown of spending by agency.

Graph provided by the Legislative Finance Division – this graph does not show the latest changes and is meant to demonstrate relative amounts of spending.

We do not expect a dramatic turn in oil prices in the next year, so I do not see oil bailing us out this time around.  We will need a solution that involves many elements.  We will need to seriously look at sustainable revenue sources to pay for our essential state services.  Discussions are already taking place to identify a sustainable withdrawal from excess earnings of the Permanent Fund while maintaining a sustainable dividend, but that will only address about 1/3 of the gap.  We will also need to look further and consider reinstituting a state income tax, which will allow us to raise revenue from the 20% of workers in Alaska that do not reside in our state.  We do have the tools and capacity to bring our state to a sustainable budget; I just hope we are able to use those tools productively.

February 19, 2016: Visiting with Mark, Ramona, & Sabrina Schimscheimer from Anchorage on their trip to the Capitol.

Heads Up

1. Launch: Alaska works with early stage companies and offers them $25,000 and a 13+ week process to encourage rapid maturity. L: A is looking for people interested in participating from a startup/entrepreneur or mentor perspective, with a focus on the arctic technology sector and the energy sector. The application deadline is Feb. 29. For additional information contact Lance Ahern lance@launchalaska.com or (907) 360-3319.

2. SERRC Student Loan Forgiveness: Any full time public sector or government employee with federal student loan debt is eligible.  The loan forgiveness amount is individually determined and tax-free. For more information, go to: http://partners.isloansolutions.com/serrc/.

3. Alaska Housing Finance Corporation (AHFC) announced that, due to budget cuts, it will be closing its Home Energy Rebate Program to new participants, effective March 25, 2016. Families who are currently on AHFC’s waitlist can check the status of their application online. New participants have time to sign up at www.ahfc.us or by calling 1-877-257-3228 during normal business hours until March 25.

February 17, 2016: Sen. Egan and I met with the Planned Parenthood Teen Council – it’s a pleasure to hear from the next generation of engaged citizens.

4. Apply for your Permanent Fund Dividend: You can apply online at http://pfd.alaska.gov/, or call the Permanent Fund Dividend office at 269-0370 to find your nearest location and fill the application out by hand.

5. Alaska Robotics Mini-Con is a comic convention and artist camp taking place in Juneau, Alaska from April 22-26th, 2016.  For more information, click here.

6. Congratulations to the Juneau and Haines libraries, both in the running for a national library award. See the KTOO story here.  Libraries enrich our communities by providing access to resources, information, connectivity, and creative outlets.  Go visit your local library this weekend!

As always please don’t hesitate to contact me with any questions or concerns.

Sincerely,

Sam Kito III