JUNE 26, 2017

Budget Compromise Reached

Dear Friends, Neighbors, and fellow Fairbanksans:

I am excited to finally be returning to my family in Fairbanks, hopefully to enjoy the remainder of the summer at home; but of course I don't know when I might have to go back to Juneau. I hope you have been taking advantage of these long summer days to spend time with your friends and family.

Government Shutdown Averted – but no Fiscal Plan Yet

The evening of June 22, the Legislature passed the operating budget that funds all of Alaska’s government departments, thereby averting a government shutdown. The budget compromise included:

• $4.2 billion in total spending, not including dividends – 18% less than in Fiscal Year 15
• A $128.7 million cut in unrestricted general fund spending from last year’s budget
• Dividends funded at about $1100
• Flat funding for Education – the Senate had proposed a $69 million cut
• An $8 million cut to the University – the Senate had proposed cutting $22 million
• $15 million cut to Medicaid
• $57 million for oil and gas tax credits (and intent language to zero out credits by June 2018)

While it’s great that we fully funded K-12 education, I’m very upset at the reduction to the University’s state funding. At least it wasn’t as bad as the Senate’s cuts, but if we want the University to continue functioning as the premier educational institution that it is, we should not have made this reduction. I will be fighting for the Legislature to take a less short-sighted approach to University funding next year.  

There is some talk about adding more funds to the University in the Capital Budget, maybe $7M. This is good news of course but it confines the spending to be on capital items, such as deferred maintenance. Also this will mean in order for the university to get similar funding next year it will have to ask for the combined budgets of operating and maintenance ($317 + $7M) which will look like an increase and will face objections for this reason alone.

Obviously I’m glad the government isn’t going to shut down July 1. But the Legislature’s job is not done. We once again kicked the can. This is not acceptable. Alaska desperately needs a fiscal plan. This year the budget was funded from savings, and we cannot afford to do that for even one more year. Using the Permanent Fund as an endowment to partially fund state government would be a good start to a sustainable fiscal plan. But we also are going to need some sort of broad-based revenue measure.

The second Special Session continues – the Governor has added HB 111 (oil and gas tax credits) to the agenda. I’m not sure what exactly will happen in the coming days and weeks before this special session ends on July 15.  We still haven’t passed a capital budget which is needed and of course we haven’t addressed the other issues that were on the first special session: Oil taxes, PFD restructure and revenue including motor fuel tax. We need to address these issues to get the State back on the path of fiscal certainty and moving forward. Not sure when exactly this will happen, might even be later this year but it MUST be done.

Governor Signs HB 23 -- Insuring Dependents of Fallen Peace Officers and Firefighters 

On June 21, I was honored to participate in the bill signing ceremony for HB23. This legislation continues insurance coverage for the families of police officers and firefighters who die in the line of duty while serving Alaskans. By creating a special fund financed through legislative appropriations, contributions from municipalities, and donations, the bill ensures that families will have health insurance coverage for at least 10 years, or until they are eligible for such coverage through other means.

It is my hope that the families and loved ones of those killed in the line of  duty will take peace and comfort from the passage of this legislation. It is an important step toward protecting those who make the ultimate sacrifice in protecting us.

Thanks, and always feel free to reach out and contact me.

Sincerely,

Representative Adam Wool