Representative Sam Kito III
Facebook Twitter Share on Facebook  April 17, 2017  

Session Overtime Begins

Dear friends and neighbors,

As of Sunday, April 16th we have passed through the statutory end of session, and we are now officially into overtime.  Our state budget has passed the House and the Senate, but we have not yet started the conference committee process.  There is still work to do on our fiscal plan, and this week we took a major step towards sustainability.  With the passage of House Bill 111 and House Bill 115, and passage of the House amendments to Senate Bill 26, we have all of the pieces out on the table to get us much closer to a comprehensive fiscal plan – you can read this for more information.

Sustainability – Alaska’s Fiscal plan

Our sustainable solution is a four-pillar plan that balances the impact across all Alaskans.  This plan will bring our state to within $400-500 million of balancing our budget.  This is much better than the current $3 billion revenue shortfall.  I say revenue shortfall because the situation we are in is a result of declining revenues, and not excessive spending as some are trying to insist.

Four Pillars of Alaska's Fiscal Plan

1) HB 111 restructures Alaska’s oil and gas tax subsidies. This bill ensures that we limit our losses as a result of an oil and gas tax policy that did not anticipate such low oil prices.  The revenue gains are modest, but the future income losses have been limited significantly.

2) HB 115, the “Education Funding Act”, provides for a progressive tax on income made by those working in Alaska that will be directed to the Public Education Fund.  This act is anticipated to generate approximately $680 million.

3) HB 57 is the FY18 operating budget that holds the line on agency spending.  The House version of the bill limits unnecessary budget reductions while providing funding for essential programs such as education, healthcare, public safety, transportation, the Alaska Marine Highway System, Pioneer Homes, public broadcasting, and the University of Alaska.

4) SB 26 restructures the Permanent Fund Earnings account payout providing an annual dividend of $1,250 and allowing a percent of market value (POMV) draw to support necessary and essential state services. The House made changes to this bill reducing the payout to a more sustainable 5% of recent historic value, and stipulating that the bill will not be enacted unless the fiscal solutions in HB 111 and HB 115 are also enacted.  Linking SB 26 to HB 111 and HB 115 insures that we will end up with a comprehensive sustainable fiscal plan, and not just one pillar of our four pillar plan.

This fiscal plan puts us on the path towards fiscal stability and sustainability.  With all of the pieces of the fiscal plan on the table, the next step will be negotiating with the Senate to put all of the pieces into place.

Presenting the proceeds of the annual Sham Jam fundraiser to The Canvas, Community Art Studio & Gallery. Many thanks to the volunteers who made is a success!
Presenting the proceeds of the annual Sham Jam fundraiser to The Canvas, Community Art Studio & Gallery.
Many thanks to the volunteers who made is a success!

We need to protect public education and Alaska’s seniors

We have seen that the Senate has proposed significant and dangerous cuts to public education and the Pioneer Homes in addition other cuts.  Throwing reductions into the budget at the last minute—without the ability to fully explore the consequences of such cuts—is a clear path to crippling our economy.  Our current fiscal situation is not due to uncontrolled spending, our situation is due to a precipitous drop in oil prices that is not expected to turn around appreciably in the near-term.

Articles discussing the Senate’s proposed reductions can be found here and here. Providing for the education of Alaska’s children is our primary responsibility, and to me is equivalent to paying the mortgage on a house.  Education of our children is an investment in our future.

In addition, the Senate also recently proposed a 10% cut (about $6.5 million) to Alaska’s Pioneer Homes (read more here). I appreciate everyone who called or wrote to me and the rest of my colleagues in the legislature. Alaska’s Pioneer Homes do wonderful work in communities around our state, and I am committed to ensuring they have the support necessary to continue that work.   We are certainly in a challenging time, but we do need to support our seniors and, when we are able, begin preparing for the “silver tsunami” of aging Alaskans who have a desire to age in place or receive care in community close to family. 

April 13, 2017: HB 48 passes the Senate.
April 13, 2017: HB 48 passes the Senate.

Personal and Sponsored Legislation

In addition to the fiscal plan there are other day-to-day responsibilities of legislating for our state.  To that end, I have several pieces of legislation that my office has been working on this session.  Three of the bills are occupational licensing sunset extensions, two are bills that my Labor and Commerce Committee is working on for the Department of Labor and Workforce Development and the Department of Commerce, Community and Economic Development, and one is a personal bill establishing Benefit Corporations in Alaska.

  • HB 48 extends the Architects, Engineers, Land Surveyors Board and passed the Senate on Thursday. It is awaiting transmittal to the Governor.
  • HB 49 extends the Board of Direct-Entry Midwives and passed concurrence on the House Floor on Monday. I’m optimistic that it too will be headed to the Governor shortly.
  • HB 121 is a Labor & Commerce Committee bill by request of the Department of Labor and Workforce Development. This bill updates Alaska’s occupational safety and health penalties to conform to federal requirements so that Alaska’s Occupational, Safety and Health program is in good standing. HB 121 has made it through the House and is currently awaiting a hearing in the Senate Labor & Commerce Committee.
  • HB 124 establishes a new corporate entity called a benefit corporation in Alaska statute. A benefit corporation is a for-profit corporation which incorporates public benefits and community improvement into its business practices, no matter the principal service or product provided. HB 124 had its first hearing in House Finance on Monday April 17th.
  • HB 144 extends the Board of Veterinary Examiners and is a companion bill to SB 51. These two bills have been progressing through the respective bodies and are nearing passage.
  • HB 157 is a Labor & Commerce Committee bill by request of the Department of Commerce, Community, & Economic Development. HB 157 updates the Alaska Guaranty Association Act to remain consistent with the latest national standards set forth in model legislation. HB 157 has made it through the House and is currently awaiting a second hearing in the Senate Labor & Commerce Committee.

Thank you to everyone who has visited, called, or emailed – I appreciate hearing from each of you. Please be in touch if you have questions or comments.

Best wishes,

Sam Kito III


Phone:  (907) 465-4766
Toll free:  (877) 465-4766
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Alaska State Capitol
Room # 403
Juneau, AK 99801