| April 21, 2016
Legislative update, day 94
Hello from Day 94 of our 90-day session!
Day 90 floor session
Sunday was scheduled to be the last day of our 90-day session, and since any bill not passed by the end of a second session of a legislature dies, we hurried to work through a lot of personal legislation. It was a marathon session, starting at 11 AM on Sunday ending at 3 AM on Monday. Both the House and Senate passed numerous bills, but with only one exception, the bills passed were sponsored by members of the majority. As happens sometimes late in the session and late in the evening, there were some pretty interesting pieces of legislation created by combining bills that were only distantly related in an attempt to get legislation passed. On the House side, legislation making changes to the Barbers and Hairdressers Board was inserted into a bill updating the Alcoholic Beverage Control Board statutes. On the Senate side, legislation granting Optometrists additional prescription and surgical authority, and legislation limiting smoking in public places were inserted into a bill making changes to the Barbers and Hairdressers Board. Neither of the hybridized bills passed that night which is a testament to the recognition that last minute major changes are not appropriate for the waning hours of session. Unfortunately, most of the bills that did pass on Sunday/Monday offered no resolution to the fiscal crisis, leaving us with a great deal of work left to do before we will be able to adjourn for the summer.
The issues that I touch on here are by no means exhaustive – if there are issues or bills that you have questions or concerns about that are not addressed here, please contact my office.
Image of the floor calendar in the final week or so of session – there is a lot to track, feel free to call with any questions.
House Bill 256: Operating Budget
The Operating Budget is the only task the Legislature is constitutionally required to complete during each legislative session. We have yet to reach an agreement, and the bill is currently under the consideration of the Conference Committee. There are three legislators from the House Finance Committee and three legislators from the Senate Finance committee who are tasked with reconciling the differences between the House and Senate versions of the bill. Their work is still in progress, and I consider those items available for discussion before we agree on a completed budget. So far in the conference process, education has taken a huge hit, with no funding for early education programs such as Best Beginnings, Parents as Teachers, and Pre-Kindergarten grants, as well as a $51 million cut to the University of Alaska system. The Alaska Marine Highway System budget has also taken a concerning turn as over half of the Alaska Marine Highway System Fund has been tapped to provide funding for the system, leaving precious little funding to bridge between receipt of revenues, and timely payment of bills and invoices.
Senate Bill 128 & House Bill 245: Restructuring the Permanent Fund
As we look to address the decrease in oil prices and significant budget deficit that has grown to around $4 billion, one of the topics of discussion is consideration of using the excess earnings from the Permanent Fund. To that end, there are several bills that have been introduced, and multiple concepts being discussed. So far, the concepts under consideration propose to restructure the way revenue flows into the Permanent Fund, and then provide for a stable and sustainable draw to fund essential state services. The latest proposal in front of the House Finance Committee proposes a draw of 5.25% of the funds value, which is estimated to be at the upper end of sustainability while still proposing a $1,000 dividend for Alaskan residents.
I do have concerns about this bill if we are not able to address the growing oil and gas tax credit problem that is estimated to cost our state over $700 million in the next year. I would hate to take $1,000 out of Alaskan’s dividend only to turn around and give that money to oil and gas companies who are not paying any taxes because of other deductions and credits.
House Finance has been hearing HB 245 and taking public testimony. If you haven’t already shared your views, I encourage you to email your remarks to: email@example.com
Our state is in need of a fiscal plan, and we need it now. Without it, our state’s fiscal outlook is troubling.
House Bill 247: Oil and Gas Tax Credits
One of the key pieces of the budget puzzle is oil and gas tax credit reform. It is not reasonable to ask individual Alaskans to pitch in to support state government when we are spending billions of dollars to support the oil and gas industries. Meaningful changes to our oil and gas tax credit system are critical to any reasonable, sustainable budget plan. At the Joint Minority press conference on Wednesday, our caucus made clear that HB 247, reform to the oil and gas credit system, is a priority before we can reasonably consider other potential revenue measures.
HB 247 is currently in the House Rules Committee. Although we considered it on the floor a couple weeks ago, it did not have enough votes to pass.
House Bill 379: Eliminating pay step increases for state employees
This bill caught everyone by surprise when it was introduced on the 91st day of session, after our 90-day session deadline passed. It proposes to eliminate negotiated merit pay and step increases for certain state employees, and directs the department to negotiate future contracts with those provisions included. The bill has received only one committee of referral, House Finance, and has already had two hearings. I appreciate everyone who has contacted my office on the subject, I share many of your concerns. Rushed policy leads to bad policy, and it is inappropriate for this bill to be thrown in this late in the game. The bill is a distraction from the work we need to be doing on fiscal sustainability for our state, and we are working to stop this bill before it gains any traction.
Thanks to all the folks who have taken the time to call, write, email, or drop by my office – I appreciate hearing from you. Please be in touch if I can be of assistance.
Sam Kito III