Protecting Your Rights: Serving Sand Lake, Spenard and Turnagain

December 17, 2019

In this issue:

• Governor Releases Budget

• Update on Adult Assistance

• Private Prisons & Prisoner Outsourcing Presentation

• Community Events

Dear Friends and Neighbors,

On December 11, Governor Dunleavy released his proposal for the operating, capital, and mental health budgets for Fiscal Year 2021, which will begin on July 1, 2020. The proposal is a marked departure from the budget the governor proposed for FY20.

Governor Dunleavy Releases FY2021 Budget

Last February, the governor proposed over $1 billion in cuts to the operating budget, slashing funding for services ranging from the university to the ferry system to Medicaid in an effort to create a balanced budget that included a $3,000 dividend. This year, in contrast, he has proposed a budget that largely flat funds essential services when compared with projected spending for FY20 (the FY20 budget plus an anticipated $225 million supplemental budget), with funding for many services remaining unchanged from the current fiscal year.

But the governor's proposal for FY21 also includes funding for a 2020 dividend estimated to be $3,170 per person. Paying a $3,170 dividend will cost a total of $2 billion and, given the limited cuts the governor has proposed for FY21, will require draining $1.5 billion from the Constitutional Budget Reserve (CBR), one of the state's last savings accounts. And it would leave just $500 million in that account.

This FY21 expenditure (not counting any FY20 supplemental expenditures the governor may propose) would leave the state unable to cover future deficits projected in the governor's 10-year budget plan (the deficits in future years assume roughly $2 billion or more in dividend funding each year) and would make it difficult for the state to respond to potential emergencies like a major earthquake.

In addition to the 2020 dividend, the governor has indicated that he will request a supplemental payment of roughly $1,400 per person for the 2019 dividend (while the governor has stated that this is his intent, it has yet to be included in writing in any budget proposal). The total cost of the governor's proposed supplemental dividend would be $883 million. When combined with the anticipated $225 million supplemental for state services, the total comes to $1.1 billion in supplemental spending for our current fiscal year.

To pay for the supplemental dividends, the governor has proposed ignoring the statutory limit on draws from the Permanent Fund earnings reserve account (ERA). The statutory limit on ERA spending was passed in 2018 (Senate Bill 26) in an effort to create a sustainable method for funding state government and to protect the Permanent Fund for future generations. Making a draw beyond the SB 26 statutory limit risks lowering the value of the Permanent Fund over time.

While a budget like the one the governor has proposed for FY21 is not sustainable for more than one year, the governor's 10-year budget plan indicates that he is open to considering new sources of revenue like a tax, restructuring the dividend formula, and making further reductions to various state services to achieve balanced budgets in the future.

Though the budget is largely flat-funded, the governor has made reductions (beyond those made in FY20) to offset increases in formula-funded services like education and Medicaid and increases to the Department of Corrections and the Department of Public Safety. The following are some of the services cut (or cuts sustained from the FY20 budget) in the governor's FY21 proposed budget:

$3 million from VPSO Program (sustained from FY20)
$250,000 eliminating funding for Civil Air Patrol (sustained from FY20)
$6.5 million from Behavioral Health Treatment and Recovery Grants (sustained from FY20 with additional $400,000 reduction in FY21)
$3 million from Public Broadcasting (sustained from FY20)
$38 million from Alaska Marine Highway System (sustained from FY20)
$3.4 million from Ocean Ranger Program (sustained from FY20)
$2.5 million from Power Cost Equalization
$1.5 million from Rural Energy Assistance
$3.4 million eliminating Economic Development line item
$5.8 million from Alaska Seafood Marketing Institute
$25 million from University of Alaska (on top of $25 million cut in FY20)
$9.4 million from Pioneer Homes
$16.6 million from Palmer Correctional Center (instead of reopening PCC, the administration is moving forward with plans to send prisoners out of state)
$398,300 from Suicide Prevention Council
$3 million eliminating Emergency Medical Services Grants
$5 million from Pre-Kindergarten Grants
$232,900 from Online with Libraries (OWL)

The following are some of the spending increases in the governor's FY21 proposed budget:

$1.6 million for Office of Public Advocacy
$1 million for Trial Courts
$17.8 million for Department of Corrections Out-of-State Contractual (part of continued efforts to send prisoners out of state. The budget proposal also moves allocations for Electronic Monitoring and Community Residential Centers under the Population Management appropriation, which would allow these funds, totaling $19 million, to go toward funding the out-of-state contractual at the discretion of the commissioner.)
$7.4 million restoring funding for Adult Public Assistance
$27 million restoring funding for Adult Dental Medicaid Services
$9.1 million for Alaska State Trooper Detachments

The governor's proposal is not fiscally sustainable without substantial new revenue or substantial reductions, and it is not a responsible action plan for Alaska. Thus, it will again fall to the Legislature during the 2020 session to come up with a responsible financial strategy that strengthens our economy, supports essential services, and moves Alaska forward. As we saw during the FY20 budget process earlier this year, public input will be critical.

Please email Rep.Matt.Claman@akleg.gov or call our office, 269-0130, with any questions or concerns.

The governor has stated that he would like to hear from Alaskans as the budget takes shape and plans to hold discussions with communities around the state. His office may be reached via email at this web page or via phone: 465-3500.

State Postpones $7.5 million Reduction to Adult Public Assistance

On Monday, December 9, the governor announced that he plans to delay a $7.5 million cut to Adult Public Assistance that would have impacted monthly payments for 19,000 elderly and disabled Alaskans. During the FY20 budget process, the governor initially vetoed $14.7 million from the program. After the Legislature restored the entire sum in House Bill 2001, however, the governor settled for cutting $7.5 million through a second round of vetoes. While this $7.5 million cut to Public Assistance has been delayed, it is likely that the administration will continue to pursue cuts to the program at a future date.

House State Affairs Committee Holds Presentation on Private Prisons & Prisoner Outsourcing

In November, my office reported on the Department of Corrections' (DOC) proposal to send 250-500 incarcerated Alaskans to Lower 48 prisons to serve their sentences. On Wednesday, December 11, the House State Affairs Committee held a hearing that raised questions about DOC's announcement that it would move forward with plans to send prisoners out of state, despite the $16 million legislators appropriated in Fiscal Year 2020 to reopen the Palmer Correctional Complex.

The capacity of the Palmer facility is 388. Instead of taking steps to reopen the facility, which internal department documents indicate would have cost less than the $16 million set aside by the Legislature and could have been accomplished in nine months, the department did nothing during this time period. Had they begun working to open the facility when the funds were initially appropriated, today, the prison would be a month away from opening, bringing with it new employment opportunities in the Mat-Su.

The department's plan to send prisoners out of state will result in a loss of economic opportunities for the state. It also raises safety concerns as prisoners incarcerated in the Lower 48 are more likely to be exposed to sophisticated criminal practices, are farther from family and support networks, and return home more likely to re-offend. Rep. Zack Fields has introduced legislation that would prevent the department from sending prisoners out of state.

Community Events

Mark your calendars for these upcoming events:

Public Hearing on Naming Lynn Ary Ball Field in Honor of Marty Smith

As part of the Anchorage Municipal Code naming process, the Assembly's Citizen Naming Panel is holding a public hearing on the "Marty Smith Diamond" proposal, which would give the name "Marty Smith Diamond" to the northwest diamond at the Marston Fields in Lynn Ary Park in honor of Marty's long-term commitment to the Anchorage West Little League (AWLL) and the playing fields at Lynn Ary.

Marty was raised in West Anchorage and developed a passion for baseball in his youth. As an adult, he spent many hours volunteering at the Lynn Ary Park fields by coaching, umpiring, serving on the AWLL Board of Directors, and providing leadership as president of AWLL in 2017. He finally stepped down due to cancer, which took his life in 2018 at the age of 51.

In February, I wrote a letter in support of naming the field in Marty's honor and was pleased to see that Turnagain Community Council passed a resolution this month 25-0 in support of the naming.