Representative Louise Stutes-House District 32-Proudly Serving Kodiak, Cordova, and Yakutat.
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MAY 5th, 2017
Dear Friends and Neighbors,
Greeting from Juneau!
Marine Transportation Alert: Tustumena return to Service Delayed!
I regret to announce that the M/V Tustumena, which was originally scheduled to be out of the Vigor Shipyard in Ketchikan and back into service on May 27th, has had its return to service delayed until July 18th. The delay is due to the discovery and necessary repair of additional extensive steel wastage in the engine room.
Here is the press release from the Department of Transportation of Public Facilities.
Our Alaska Marine Highway System (AMHS) is doing a great job operating under a very reduced and constrained budget; however, what this means for our district is that the Tustumena’s scheduled rout from Homer to Seldovia, Port Lions, Ouzinkie, Kodiak, and Old Harbor that was to begin on May 27th is now not expected to start until July 18th.
This is very unfortunate for our district and truly underscores the need for a replacement vessel. There are currently only two AMHS vessels that are certified for cross-gulf operation and the Tustumena is one of those; unfortunately, it is also 53 years old, which increases the cost and frequency of repairs. We need a vessel that can provide dependable access in and out of our communities.
The capital budget that the House passed over to the Senate contains a $244 million appropriation for the construction of a replacement vessel for the Tustumena. The Senate version, SB 23, is in the Senate Finance Committee and also contains that appropriation.
Access to and from our coastal communities is vital to the daily life and economy of our district. I strongly encourage you to submit written testimony to the Senate Finance Committee at email@example.com in support of leaving that appropriation intact.
It is day 109 of the legislative session and I would like to take this opportunity to update you on where we are and what the path forward will be.
First, I want to thank everyone who testified this year or contacted me with concerns, questions, and ideas. The public participation has been outstanding and whether you agree with my viewpoint or not, please keep contacting me and testifying. Your opinions and ideas help move the conversation forward in a positive way.
Although we are statutorily obligated to adjourn by day 90, the constitution allows for a 120-day session. Unfortunately, the House and the Senate have very different views on how to solve the state’s fiscal gap. We are facing some of the most difficult decisions in Alaskan history and compromising on a solution that both bodies can agree to is taking additional time.
Please stay engaged, informed, and be patient.
None of the paths to Alaska’s financial recovery involve elements people want to embrace. Whether it be taxes, cuts, a Permanent Fund restructuring, or a reformation of oil subsidies, all of these pieces have detrimental impacts on people and the economy; however, they are necessary parts of getting us back on track. As I mentioned in my previous update, Alaska has spent $10 billion in savings over the last three years despite enacting very deep cuts. If we do not act decisively, we will be in a much worse situation soon. Hard decisions must be made and any solution will not be a popular one.
Prior to the start of session, the House Majority committed to each other and Alaskans that any solution must be equitable for all of our residents, that it must include multiple mechanisms, and that it must create economic stability now and into the future.
I believe that Alaskans are willing to contribute to a plan to solve our fiscal crisis as long as it does not unfairly burden one segment over another. The House has submitted that plan to the Senate.
The bottom line is that the House and the Senate both want a prosperous Alaska, but disagree on the policy that will get us there. Both bodies want to protect the private sector and grow the economy, but the House Majority believes, as economists have testified to, that Alaska cannot cut its way to prosperity. The public and private sectors do not exist in a vacuum independent of each other. Another $700 million in state cuts, as the Senate is proposing, would have a massive impact on both the public and private sectors.
The Senate believes that state government is still too large and that we should cut another $700 million. The Senate also does not support a reformation to oil subsidies or a progressive, broad-based tax to offset the regressive nature of a Permanent Fund restructuring. In my view, and based on our economic studies, cutting another $700 million will hurt the economy more and cost more jobs than an income tax; furthermore, cuts do not address the underlining issue of our dependency on a single revenue stream. To provide a stable future for the state, we must diversify our revenue and avoid wild fluctuations due to oil prices.
The House recognizes that we have cut the budget by 44% since Fiscal Year 13 and that further large-scale cuts will have disastrous impacts on essential services. I try my best to represent your interests and in rural Alaska, we rely on an operational marine highway system, robust fisheries management, good schools, strong public safety, and the proper upkeep of our roads, airports, and harbors. As a result, my colleagues and I support an income tax. We are the only state in the country without a broad based tax. The following report by the Institute on Taxation and Economic Policy shows that under an income tax like HB 115, most Alaska households would pay less than they would under a 3% sales tax even if the sales tax exempted food, childcare, and rent:
Last week, the Senate Labor and Commerce Committee heard testimony on the income tax and by my count, 61 were in support, 48 opposed, and 5 were undecided.
There is also an eye-opening presentation from the Governor’s office that has a list of discontinued state programs, a map of closed facilities, and chart of department reductions since Fiscal Year 2015 here:
Where is the light at the end of the tunnel?
At this point in the session, everything is on the table and the 4 pillars of the House’s plan are before the Senate for consideration. For the good of all Alaskans, it is time for both bodies of the legislature to put our differences aside and find common ground on which to reach a compromise this year.
These compromises will hopefully result from work by conference committees. For those who aren’t familiar with that process, a conference committee is special committee to which both bodies appoint members to resolve the differences between the House and the Senate versions of a bill. The entire point of these committees is to find common ground and reach compromise.
I am hopeful that through the conference committee process, we can find a solution this year that both legislative bodies, the state, and more importantly you, my constituents, can live with.
Last week, a conference committee was appointed for SB 26, the Permanent Fund Protection Plan. The House appointed Rep. Foster (Chair), Rep. Seaton, and Rep. Thompson. The Senate appointed Sen. MacKinnon (Chair), Sen. Hoffman, and Sen. Egan. I will keep you updated as the committee begins meeting to negotiate the differences between the House and Senate versions of this bill. There will likely soon be a conference committee appointed on the budget as well.
While we must compromise and find common ground, there is one tenet of the House Majority that we stand resolute on: we will not kick the can down the road another year! We will not stand by while we drain the state’s savings and future into the ground by supporting incomplete solutions and half measures. This is a bicameral legislature, with the House comprising one part. While I cannot guarantee that the Senate will pass all 4 pillars of our plan, I can assure you that the House has made the hard choices and will put as much pressure as we can to force the Senate to act.
Again, whether you support or oppose my views, please reach out to me with your thoughts because I work for you and will always listen.