**There were a few errors in the previously sent e-news, this is the corrected version.**
Monday, March 30th
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The Operating Budget Passes |
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In response to COVID-19 the legislature passed a budget and an emergency disaster extension in a record 69 days, gaveling out at about 1:30am on Sunday morning.
The budget isn’t perfect—it never is—and these are particularly difficult times. Not only did we have to rush the budget through to respond to the COVID-19 public health emergency, but our revenues have dropped dramatically since session began on January 21st.
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The above graph was compiled by our non-partisan Legislative Finance Division. It depicts state spending over time, adjusted for population growth and inflation.
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FY 21 Projected Revenue Drops by $700 million
The price of oil January 21st was $66 per barrel and has dropped to $25 per barrel as of Friday, March 27th, resulting in additional drops over original revenue projections by $300 million this year and another $700 million in FY 21. That price drop isn't reflected in the budget graph above. That graph shows our revenue and spending since FY76, and as you can see, after large reductions our spending levels are well below what they were in FY07, before the last oil boom and resulting growth in spending.
To make matters worse, the Permanent Fund has lost about $8 billion in value since January. That means there is just less money to spend than we need. The Alaska Journal of Commerce covered the revenue drop in a recent article which is well worth the read.
The result is an austere operating budget which--at $4.54 billion in unrestricted general funds--is lower than our FY07 budget. We've already done the hard work of making difficult cuts, and now we need to start working on a fiscal plan.
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This budget:
- Flat funds education.
- Funds school bond debt reimbursement and community assistance.
- Makes modest increases to public safety for village public safety officers, troopers, and prisons.
- Allocates $75 million for the Dept. of Health and Social Services to bolster emergency medical and trauma systems.
- Allocates $5 million to the Disaster Relief Fund to be used by the Dept. of Military and Veterans' Affairs to help with the public health disaster response.
- Allocates $5 million for the Alaska Housing Finance Corporation to alleviate COVID-19-related homelessness.
- Allocates $2.7 million for the public health services provided by the Municipality of Anchorage.
- Provides Alaskans with a $1,000 PFD.
Permanent Fund Dividend
There were many in the legislature this year that advocated for no PFD because of our challenging fiscal situation. I know that many Alaskans need the PFD--this year this is truer than ever--and I believe that we should have the largest PFD we can afford. The resulting compromise was a $1,000 PFD.
Capital Budget
The capital budget is minimal, and for the most part only funds transportation projects that bring in a 10 to 1 federal match.
Recessing—not adjourning
The legislature is committed to reconvening after it is safe to do so to address the rest of the capital budget and any COVID-19 related issues still outstanding.
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SB 241 – COVID 19 Disaster Declaration and Response |
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I had the privilege of serving on the SB 241 conference committee, where I worked with colleagues in the House and Senate to bring together our two proposals for COVID-19 response. The conference committee staff , seated at the table before the committee, worked tirelessly on the bill. Legislative staff are behind the scenes professionals that deserve more credit than they often receive for their efforts. |
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I was actively involved in the passage of SB 241, which extended the public health disaster declaration until as late as November 15th and protected Alaskans from the public health and economic impacts of COVID-19.
SB 241:
- Halts evictions, utility shut-offs, car repossessions, and foreclosures for Alaskans experiencing financial hardship as a result of COVID-19.
- Provides $10 million from the Disaster Relief Fund to assist with any expenses that arise during response efforts.
- Allows for vote-by-mail in elections in 2020.
- Enables the Department of Community, Commerce and Economic Development to provide grants to small businesses.
- Outlaws price gouging.
- Extends the PFD application period to April 30, 2020.
I have heard from landlords who are concerned about the limitations on evictions and want to assure them that:
- to access that protection, Alaskans will have to sign a sworn statement under penalty of perjury, which is a felony, that they can’t pay their bills due to COVID-19.
- the debt doesn’t go away, rather it accrues over time to be paid at a later date, once the public health emergency is over.
- landlords can still evict residents for breaking the law, breaking their contracts or bad behavior.
- this is a temporary measure that lasts through June 30.
We put essential limits on this provision but it's essential we don't increase homelessness amidst a public health emergency.
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The Coronavirus Aid, Relief, and Economic Security Act or CARES Act passed by Congress last week will provide wage replacement including for gig workers and freelancers who aren’t typically eligible for unemployment benefits. It also provides cash payments to every American who pays taxes or receives Social Security, grants for small businesses and much, much more.
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COVID-19 Updates & Information: |
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These are trying times, and things are evolving rapidly. Please reach out to my office at (907) 465-4940 or email me at Rep.Ivy.Spohnholz@akleg.gov with questions, concerns, or ideas. Be well, and wash your hands!
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As always, keep in touch (from a safe 6 foot distance)! |
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Phone Number: (907) 465-4940
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