Capitol Report: Proposed $4.7 B budget would eliminate 200 state jobs

Proposed payroll tax would help pay for deferred maintenance and community infrastructure projects

Alaska State Capitol Building
Alaska State Capitol Building
Sen. Gary Stevens

Greetings from the Alaska State Capitol. The second session of the 30th Alaska State Legislature got underway on Jan. 16, and though a great deal of work remains, legislators are optimistic we will pass a budget and adjourn in 90 days.

Committee Assignments for 2018

This year, I serve as chair of the Senate Education Committee, and chair of the Senate World Trade Committee. I am also a member of the Senate Finance Committee and will chair the finance subcommittees responsible for Education, Administration, and Judiciary budgets. Additionally, I am a member of the Senate Labor and Commerce Committee, and, as a past national chairman of the Council of State Governments, I will continue serving on the organization’s executive committee and board of directors.

The Budget

As a member of the Finance Committee, I will have an active role in the development of the fiscal year 2019 budget. The starting point for the discussion is Governor Walker’s proposed $4.7 billion budget. This is a drop of 1.7 percent from the current fiscal year’s $4.8 billion budget and includes the elimination of over 200 state jobs.

As part of the budget, the governor proposes paying off tax credits still owed to oil exploration companies through the issuance of bonds. About $900 million will eventually be owed by the state under the tax credit program. Although existing tax credit obligations remain, the legislature terminated the program last year.

The governor is recommending using $1.9 billion in Permanent Fund earnings to help bridge the $2.5 billion budget gap. His budget would also draw $400 million from the state’s Constitutional Budget Reserve, leaving only $1.7 billion in the account.

On the revenue side, the governor has introduced a payroll tax through SB 139, with the goal of using funds from the tax to help pay for deferred maintenance and community infrastructure projects. The proposed tax rate is 1.5 percent and would be capped at $2,200 per year. The tax would raise an estimated $800 million over three years, and then sunset in 2021.


SB 139 is awaiting a hearing by the Senate Finance Committee. A companion bill, HB 281, is currently in the House Finance Committee.

The governor’s budget will undergo many changes as it is debated in the Senate and House Finance Committees. Part of the deliberation process involves public input. I encourage you to share your thoughts on the budget during public comment periods. Please contact the Legislative Information Office (LIO) near you for more information on how to participate.

Personal Legislation

I introduced SB 131 this session to set up a separate appropriation bill for K-12 public education funding, requiring the education budget to be passed by April 1st. Passage of this bill will let school officials know the minimum amount of state funding districts can expect a month before their funding requests are due to their local governments. This will also help districts avoid having to issue layoff notices to teachers, which has occurred in past years when budget negotiations continued well into the spring and has been so disruptive.

SB 131 passed the Senate Education Committee on Thursday, January 25th. It has been referred to the Senate Finance Committee for further consideration.

Among my other bills working through the legislature is SB 7. This bill establishes a matching grant program within the Department of Commerce, Community and Economic Development for museum construction, expansion and major renovation projects subject to legislative appropriation. The bill advanced from the Senate Community and Regional Affairs Committee last spring and is awaiting a hearing by the Senate Finance Committee.

SB 8 will give Alaska’s federally recognized tribal governments the ability to take part in the Permanent Fund Dividend’s popular Pick.Click.Give. program should they choose. The bill is expected to be heard in the Senate State Affairs Committee this week.

SB 15 is intended to ban sales of electronic cigarettes, or e-cigarettes, and similar products to minors. The bill is awaiting a hearing in the Senate Finance Committee.

You can find more information on these bills and my other personal legislation online at: 

Senate District P Staff

Again this session, my Capitol office is staffed with familiar faces.

Nona Dimond is now in her eighth year with the office. Among her many tasks are coordinating my schedule and assisting constituents.

Tim Lamkin is back for an 12th year with the office. In addition to serving as the Senate Education Committee aide, he will work on my personal legislation and other duties.

Doug Letch is now in his 18th year in the office. He will continue to work on constituent concerns and communications, track the Senate Labor and Commerce Committee and work on my personal legislation.

Katrina Matheny is also in her 18th year in the office. She is following the Finance Committee, tracking the budget, and serving as the aide to the World Trade committee.

Please do not hesitate to contact me or my staff if we can be of assistance to you with matters involving state agencies.

Legislative Information Offices Are a Great Resource

LIOs can help you follow bills, take part in teleconferences, offer testimony on legislation and contact lawmakers throughout the session. You can also pick up a PFD application at your local LIO.

The Cordova LIO can be reached at (907) 424-5461

The Homer LIO can be reached at (907) 235-7878.

The Kenai LIO can be reached at (907) 283-2030.

The Kodiak LIO can be reached at (907) 486-8116.

Tracking the Alaska Legislature

You can follow the work of the Senate on the Internet at: The site provides a wealth of information on our efforts and our membership.

Alaska’s public television system produces Gavel Alaska, which broadcasts live and recorded coverage of floor sessions and committee hearings. The programming is also on the Internet at: offers live coverage of meetings from all of the Capitol’s committee rooms. This service is provided by the legislature.

You can also access information on any bills and resolutions introduced during the 30th Alaska Legislature through the Bill Action and Status Inquiry System (BASIS) on the Internet at:

Contact Information

Please keep in touch. You can reach me by phone at 1-800-821-4925 and in Juneau at (907) 465-4925.  My fax number is (907) 465-3517.

My mailing address is: 120 4th Street, State Capitol, Room 3, Juneau, AK 99801.

E-mail me at: [email protected]

PFD Application Period Underway

The 2018 Permanent Fund Dividend (PFD) continues through Saturday, March 31st. The easiest way to apply is via the PFD Division’s website at If you are applying by mail, I highly recommend you send your application by certified mail and request a return receipt.

Thank you for reading the Capitol Report. I look forward to sharing more information and hearing your thoughts on our