Representative Louise Stutes-House District 32-Proudly Serving Kodiak, Cordova, and Yakutat.
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MAY 16th, 2017
Dear Friends and Neighbors,
As we approach the finish line, I want to keep you informed with our progress. Here is an update of where stand as our constitutional session reaches its deadline:
Legislature Headed into Overtime
Tomorrow is day 121 of the session, which is the constitutionally authorized amount of time for the Legislature to conduct its business. Unfortunately, with key pieces of legislation yet to pass and ongoing conference committee negotiations between the House and the Senate on the budget and the Permanent Fund restructuring, we will be going into extra innings.
What form this overtime will take remains unseen, but there are several options:
The first option is for the House and the Senate to agree on an extension for a pre-determined amount of time up to 10 days. The second option is for the Legislature to gavel out and be called back to special session by Governor Walker. The primary difference between the two options is that in special session, the Legislature can only hear items that the Governor placed on the call. The upside to this is that it narrows the focus of debate to specific issues, but the downside is that it limits the amount of available negotiation tools.
I regret that we were not able to finish on time, but leaving these items on the table for another year, digging a deeper hole for the state, is not an option we are willing to accept.
Conference Committee Appointed on Operating Budget:
Last week, the Senate did not rescind its changes to HB 57, the operating budget, and both bodies appointed members to a conference committee to negotiate and reach a compromise.
The House appointed Representatives Seaton (Chair), Foster, and Pruitt, while the Senate appointed Senators Hoffman (Chair), MacKinnon, and Olson to the committee.
The appointment of this committee marks the beginning of intense negotiations on the differences between the House and Senate budget numbers, as well as the initiation of what is known as the 24-Hour Rule. Once the conference committee has been appointed, this rule comes into effect and allows bills to be heard more quickly. Normally, a 5-day notice period is required prior to a bill hearing, but the 24-Hour Rule allows for a hearing with a 1-day notice instead. This allows concessions to be made quickly and expedites the negotiation process.
Senate Votes Down Income Tax:
After several hearings in the Senate Labor and Commerce Committee, HB 115 was pulled without any consideration of amendments, and was never heard in Senate Finance.
Instead, it was placed straight on the Floor last Friday to be voted down 4 yeas to 15 nays. Unfortunately, by failing to pass this measure, the Senate’s budget is left with more than a $500 million hole this year. This bill is part of the House’s four-pillar plan and a responsible move towards getting Alaska on a path of fiscal sustainability.
We are disappointed with this action to say the least as it results in a massive loss to our savings and furthers Alaska’s recession by creating more uncertainty.
Capital Budget in the Hands of the House:
As far as budgets go, there isn’t a lot left in this one. What used to be a very large budget has been whittled down in recent years to about $123 million of state participation. That amount will leverage about $1.2 billion in federal funds for infrastructure projects. While a bare-bones capital budget is necessary currently, part of the reason we need a broad-based tax is so we can one day have a robust construction budget again. A healthy capital budget is a massive stimulus to jobs and the economy.
The Senate’s version of the bill, SB 23, also contains an additional $288 million appropriation to oil companies for tax credits. Given that the Senate did not pass the income tax or a strong version of an oil and gas tax credit reform bill, it is very unlikely that the House will be supporting this large payment to oil companies.
I was very happy, however, to see that the $22 million for the replacement of the Tustumena remains in the Senate’s version of the budget. This amount will leverage another $222 million in federal funds, bringing the total funding for the new vessel to $244 million.
The capital budget is currently being considered in the House Finance Committee.
The delay of the Tustumena’ s return to service until July 18th and the corresponding cancellations in service from Homer to Seldovia, Port Lions, Ouzinkie, Kodiak, and Old Harbor perfectly illustrate 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 Alaska Marine Highway System (AMHS) announced on May 9th that CoastalTransportation, Inc. will assist AMHS customers impacted by the delay of the M/V Tustumena. Coastal Transportation, based in Seattle, will carry cargo on an “as able basis” from Homer and Kodiak, to Aleutian Islands destinations, at the same cost AMHS charges. Unfortunately, Coastal Transportation is prohibited from carrying passengers.
AMHS customers attempting to rebook their cargo with Coastal Transportation should let Coastal Transportation agents know they are displaced AMHS customers to ensure they receive the AMHS rate. Coastal Transportation can be reached at 1-800-544-2580 or 206-282-9979.
You can view the press release from the Department of Transportation and Public Facilities.
Joint Session to Consider the Governor’s Appointments:
Today at 1:00 p.m., the House and Senate are scheduled to meet in joint session to consider the Governor’s appointments to boards, commissions, and state agencies. The Senate has been unwilling to participate so far in both joint sessions that have been called and I sincerely hope we can get this part of our work behind us today.
Please stay patient, informed, and engaged. I am hopeful that we can reach a compromise soon that is responsible to Alaskans. I will be in touch with more information as things change.
Also, feel free to reach out to me with any suggestions or concerns you have. Whether your thoughts are on the budget, new revenue, fisheries or transportation issues, or something that is important to you and your family, I’m here for you and will always endeavor to work on your behalf.