March 11, 2020

Dear Friends and Neighbors,

The Operating Budget Passes the House

The operating budget, HB 205, passed the House last week and is now in the hands of the Senate.

This year, the House budget process went very quickly. I felt that there was a broad sense of cooperation and respect in the crafting of this year's budget.

The bill outlined a 2.7% overall reduction in the FY 21 operating budget from last year's budget for a savings of over $100 million UGF.

During floor debate on HB 205, the House voted on 20 budget amendments. The amendments from members of the minority proposed increasing spending by $5.28 billion (in fairness this was largely proposed PFD increases), while their proposed cuts totaled only -$2.27 million. This shows that, through years of tough decisions by policymakers, we have arrived at a responsible level of spending on government.

Though the budget we adopted didn’t include everything that I would ideally like to see funded and I specifically disagreed with the reduction of the UA budget by $25 million (the amount laid out in the compact between the Governor and the Board of Regents, rather than the smaller reduction we proposed in the University Budget Subcommittee) a lot of positive items were included that allowed me to ultimately support this budget. Some of these were:

Full Funding for Medicaid services, including the restoration of the Adult Dental Program.
Restored partial funding to the Alaska Marine Highway System.
Major investments in public safety including:
- Funding to establish a new recruitment and retention division in the Department of Corrections to help with staffing shortages
- Funding to hire 36 additional Alaska State Troopers and a $1 million investment in the Village Public Safety Officer Program
- $7.6 million targeted at inmate rehabilitation to support prisoners with mental health and substance use disorders in order to help reduce recidivism
- Funding to address inefficiencies and backlogs in the court system
Targeted reductions to the Department of Law to curb excessive use of expensive outside legal representation by the Attorney General
Restored partial funding for public media, specifically targeted at public radio

I hope that as the budget makes its way through the Senate, the spirit of cooperation continues.

Weigh-in on a Sustainable Permanent Fund Dividend this Week

One of the most contentious and potentially transformative issues we face as a legislature and a state is the future of the Permanent Fund Dividend. The state’s single biggest asset is the Permanent Fund and how the earnings from this account ought to be used has long been at the center of fiscal debate in Alaska. Personally, I will continue to advocate for responsible use of Permanent Fund earnings and a sustainable dividend for generations to come. This week, Alaskans have an opportunity to share their thoughts.

Two PFD related bills will come before the House Finance Committee this week: HB 300, sponsored by Representative Wool, and HB 306, sponsored by the House Rules committee.

There will be public testimony on both bills Thursday, March 12^th from 1:30 to 3:30 PM and from 5:00 to 8:00 PM.

Both of these bills are part of the important ongoing dialog about how to most responsibly determine the amount for the annual dividend and how to ensure the continued resilience of our Permanent Fund and Earning Reserve accounts. Please call 907-563-9085 or email the House Finance committee to weigh-in with your thoughts on the Permanent Fund and our state’s future financial solvency.

On a somewhat related note, don’t forget: the deadline to file for your 2020 PFD is March 31^st!

HB 30- Workers Compensation Reform Update

I am happy to report that HB 30 passed out of House Finance today! The main thing that this legislation aims to do is to update our state’s rates of compensation for permanent partial impairment (PPI) that have not been increased in 20 years. Though the Finance Committee has made some substantial changes to the bill, this core component is still in place and updating these rates will be a positive step toward a more equitable work environment for Alaskans.

We are currently among the bottom 10% for PPI rates nationwide. This means that workers who are seriously and permanently injured on the job receive significantly less than they would in most other states. Our current “full body” PPI rate of $177,000 was last updated in 2000. Due to inflation in the last 20 years, this amount is only worth about $115,715 today. Currently law does not accurately value compensation for work-related physical impairment and shortchanges Alaskan who have been severely and irreparably hurt at work. I am cautiously optimistic about this bill and hopeful that it will garner more support as it moves to the House Floor for a vote and hopefully onwards to the Senate.

As always, please feel free to reach out to me anytime!

Best wishes,

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