News-Miner Community Perspective:
Throughout this past legislative session, into our extended session, through the first special session and now into the second special session, the Alaska Independent Democratic Coalition has held that it is important to fully fund education, expand Medicaid, honor employee contracts and provide for essential state services. Our priorities reflect our values, which include supporting Alaska’s children and working families.
There has been a lot of discussion recently about the failure of negotiations between our coalition and the House majority and, by extension, the Senate majority. My observations have not been that of negotiations, but of coercion and avoidance. The House majority has known since the beginning of session that, to fund our state budget, we would need to borrow more than $3.5 billion from the savings account called the Constitutional Budget Reserve (CBR). A draw from the CBR requires that three-quarters of the House and Senate agree with the budget, or we cannot borrow from the fund. During the past several months, we have seen the House majority try repeatedly to negate that vote through budget manipulations, legal opinions and threats. The one thing they have not done is sit down and negotiate points of a budget compromise in good faith.
The Alaska Independent Democratic Coalition has proposed budget cuts and deferrals that more than balance our reasonable prioritization of funding for Alaska’s children and working families. However, our suggestions for additional cuts and deferrals were never acknowledged or fairly considered.
We can use funding from megaprojects that do not provide a positive return on our investment — projects such as the Susitna-Watana dam, Bragaw extension, Juneau Access Road, or the Knik Arm crossing. There is a large amount of funding that has been set aside for these projects that Gov. Bill Walker has indicated are on hold for further review.
In addition, our coalition has proposed deferring some of the
$700 million in oil tax credits that are expected to be paid out this next year. This deferral does not make the liability go away. Rather, it postpones the liability to a future date, when our fiscal situation may look better.
The Senate has also set aside approximately $30 million in what is called a “parking garage.” The purpose of this money has not been identified, but it has been sequestered for future use. This money could easily be available to support essential state services.
We have also seen an abdication of leadership by the Senate majority through repeated statements that they have passed a budget with a three-quarters vote. The Senate did pass a budget, but that budget is not funded until there is an agreement that provides for a draw from the CBR.
The draw from the CBR will only be available if three-quarters of the House also vote for the draw. That means the Senate needs to willingly participate in negotiations with the House majority and the Alaska Independent Democratic Coalition to fully fund Alaska’s budget.
Now we are faced with another budget manipulation that proposes to take $6.4 billion from the earnings reserve account of the permanent fund and put it into the Alaska Permanent Fund corpus. This action will both reduce the amount available for funding the budgets this year and next year and also change the vote needed to use the CBR to a simple majority of each body. This action requires only 21 members of the House and 11 members of the Senate, a simple majority.
However, this action will have potentially damaging impacts on the Alaska Permanent Fund dividend. It will also make the money unavailable for important future needs like helping us get a natural gas pipeline. Without adequate reserves in the future, our ability to begin construction on a natural gas pipeline may be in serious jeopardy.
Even if the House and Senate majorities completely reject all of the cost savings cuts and deferrals we have proposed, and we are left with only a discussion of our priorities, we are only talking about approximately $75 million added to the budget that was sent to the governor. That $75 million will help keep the number of students in Alaska’s classrooms down, honor the negotiated employee contracts, provide basic transportation services to coastal communities on the Alaska Marine Highway System and save 50 jobs at the University of Alaska. Let’s put aside politics, negotiate in good faith, and protect the long-term interests of Alaska.
Rep. Sam Kito III, D-Juneau, has served in the Alaska House of Representatives since 2014.