Rep. Adam Wool's Update: End of Session

 

Friends, Neighbors, and Fellow Fairbanksans, 

I hope you and your family are doing well during this quarantine period. Thanks everyone for following the shelter in place guidelines and working to help each other and our community. 

I finally got out of Juneau on Sunday and I am now in my basement in Fairbanks separated from the rest of my family for my own quarantine period.

It was a busy last few days of the legislative session in Juneau. However, I feel we got a lot accomplished and ended up with a decent budget considering the time crunch we were under. While our work this year isn’t done yet, we have fulfilled our constitutional responsibilities and so we’re hunkering down at the advice of public health officials to slow the spread of COVID-19. The Shelter in Place mandate from the Governor is still in effect, even as cases rise around the State and in Fairbanks. You can read more about our Fairbanks cases here: 
http://www.newsminer.com/alerts/14-new-covid-19-cases-diagnosed-five-more-in-fairbanks/article_1844d440-73a7-11ea-adfd-bbc4e0ed7907.html 

Below are some of the highlights of both the budget and of the two bills we passed to help with the COVID-19 crises. One COVID-19 bill deals with the emergency declaration made by the Governor and specifies what powers would be included. The other COVID-19 bill protects individuals who will face the impending financial hardship that is sure to result from the economic reality that we are facing. Here are some highlights from those bills: 


COVID-19 Related Legislation- SB 241 and HB 308: 

  • We passed Senate Bill 241, which takes several important steps:
    • Extends the governor’s initial 30-day public health emergency until as late as November 15, unless the governor declares that the emergency is over sooner;
    • Provides $10 million from the Disaster Relief Fund to assist with any expenses that arise during response efforts, which is in addition to emergency funding authorized in other budgets;
    • Grants Chief Medical Officer Anne Zink the authority to issue standing orders for healthcare providers related to COVID-19;
    • Allows Lt. Gov. Kevin Meyer to initiate vote-by-mail elections in 2020 if in-person elections are deemed to compromise public health;
    • Pauses the eviction of tenants who are unable to pay their bills as a result of COVID-19, foreclosures on property owners, and preventing Alaskans who are struggling from having their utilities shut off;
    • Guarantees that first responders, nurses, and doctors will receive workers compensation if diagnosed with COVID-19;
    • Outlaws price gouging to prevent people from taking advantage of the crisis;
    • Gives the Division of Professional Licensing the ability to temporarily expedite licensing to individuals who have licenses in another state, and increasing access to telehealth;
    • Enables the Department of Community, Commerce and Economic Development to provide grants to small businesses to help continued operation;
    • Extends the PFD application period to April 30, 2020;
    • Provides Good Samaritan protection for Alaskans who want to address a critical shortage of personal protective equipment for health care workers and first responders.

 

  • We passed House Bill 308, which will make it easier for Alaskans to receive unemployment benefits. This bill:
    • Waives the standard one week waiting requirement to begin receiving Unemployment Insurance benefits.
    • Increases the weekly per-dependent benefit from $25 to $75, providing some relief for families who have lost childcare and income simultaneously.


Alaska's Budget- HB 205: 

House Bill 205, which contains Alaska’s capital and operating budgets, approves $4.74 billion in unrestricted general fund spending, including:

·        

    • $88 million for COVID-19 response efforts: 
      • $75 million for the Department of Health and Social Services
      • $5 million for the Disaster Relief Fund
      • $5 million for the Alaska Housing Finance Corporation
      • $2.7 million for the public health services provided by the Municipality of Anchorage
    • $151 million for the Alaska State Troopers and $14 million for the Village Public Safety Officer program to help make our state safe
    • $98 million for Pioneer Homes and $21 million for Senior Benefits to make sure the elders who built our state live their lives out with dignity
    • $1 billion to inflation proof the Permanent Fund so the fund won’t lose value over time, and $675.5 million a $1,000 dividend for eligible Alaskans;
    • $120 million in capital project funding that will provide work for Alaska’s construction industry.
    • A targeted $30 million investment in K-12 education that will help avoid teacher layoffs and larger classroom sizes.
    • $12.5 million to partially restore the University of Alaska’s budget, a move that helps avoid the closure of programs that prepare our best and brightest to grow our economy.
  • Because the House of Representatives and Senate each obtained supermajority votes for the reverse sweep, Power Cost Equalization and UA scholarships are not threatened.

 

About UAF | UAF

 

Permanent Fund Dividend payments are set at $1,000 this fall: 

  • The PFD this year should help to provide an additional boost a few months after the arrival of the federal COVID-19 stimulus check.
  • In the span of a couple weeks, the Permanent Fund lost more than $8 billion in value. This is a reminder of why we need to be fiscally conservative.
    • Oil prices are now in the twenties per barrel. Even if people start traveling more when COVID-19 restrictions end, Russia and Saudi Arabia are engaged in a price war that’s caused oil futures to drop to a point that Alaska will face massive deficits for the foreseeable future.

 

 

Exciting Disney Cruise Line Port Excursions in Sitka, Alaksa ...

Cruise ships bring thousands of passengers to Alaska each year, and with them thousands of dollars to small businesses around the State

 

 

Tough Times Ahead for Alaska: Time to Be Resilient


The hardest thing for Alaska to face is the multi-pronged problem created by COVID-19, social distancing, and the fall of oil prices. For one there is the health crisis of the Coronavirus and the potential overload of our healthcare system. This has happened in many other places in the world and the news stories are terrifying. Hopefully the social distancing campaign will slow down the spread of the virus and keep our hospitals functioning and also prevent the introduction of the virus into rural Alaska- which has very little capacity for critical care patients as has been the need everywhere else.

The second problem is that the social distancing which is necessary for public health has the effect of shutting down the economy. Many businesses have to close and this is coming at the tail end of a multi-year recession. Some businesses won't open again and our summer tourism season will be greatly affected which will also affect many businesses that depend on that industry. Many workers won't have jobs and many communities will be seriously affected. There will be dire consequences. 

The other major problem is the falling price of oil and the stock market in general taking a huge hit. Alaska right now has two major revenue sources:

  • Oil (taxes and royalties)
  • The POMV draw (5.25% of the total value of the Permanent Fund).

Oil prices have dropped dramatically even since the beginning of the legislative session in January. 

Both of these revenues are in serious decline, especially the oil component. The Permanent Fund has lost several billion dollars in value and hence the 5.25% value has dropped but oil revenue is down approximately $700M from last year (at $30/bbl oil prices).

What this all means is that our budget can't be balanced without going into savings. In fact it can't be balanced even with a zero dollar PFD check. This session we passed a budget with a $1000 PFD which costs Alaska an additional $680M. The savings account that we have remaining had a balance of $2B at the years start. After we passed the FY21 budget it is slated to have around $500M in the account. Remember in 2014 it had $14B. So basically after this next year, and including a possible large expense such as more wildfires or more COVID-19 funds needed (which will probably be the case) our savings account could essentially be wiped out. We have been told in the past to have at least $1.5B in the account for cash flow and for emergencies. We will soon have under $500M which is not recommended. This will likely lower our credit rating and have other implications that we cannot yet forsee. 

That being said, I still say this year's budget did some good things. We added some funding to the ferries, we ended up cutting UA by $12.5M instead of $25M, and we added some funds to education, public safety, and capital projects. We did pay a $1000 PFD which some say is too high and some say is too low, so maybe that's a good compromise. Many people will sure be able to use a check this fall, but this will again be a big issue next year, and that's an understatement.

I am not sure what next year will bring in terms of PFD or available revenue but it probably will be even more challenging than this year. Add to that the challenge of the greatest public health crisis we've seen in 100 years and we are really in for some trying times. I think we as Alaskans are tough and have a great community spirit which is needed right now. So please, follow the lead of our public health experts, endure these restrictions so that we can lift them sooner and be kind and understanding to those around us.

Hang in there during these tough times
, but we are resilient and can get through this. As always, feel free to reach out to me with your questions and concerns. 
 

 

Best Wishes,