Battle continues in special session over state budget

The M/V Aurora makes its way across the Prince William Sound from Cordova to Whittier on Friday, June 22, 2018. (Photo by Emily Mesner/The Cordova Times)

Dear Friends and Neighbors,

Last Wednesday, the Legislature adjourned this year’s regular session and the next day a special session began in Juneau on the budget, crime and education funding.

First, I would like to say that we always try to finish the state’s business on time and avoid the additional expense of a special session.

However, in recent years and particularly this year, the impacts of our decisions are so large and far reaching that consensus can be difficult to reach. There certainly were some difficult decisions, votes and results this year.

I want to discuss one result I know is on all our minds: the $44 million reduction to the Alaska Marine Highway System (AMHS). Although certainly better than the $97 million proposed by the governor, I was extremely disappointed that the cut was so large. Every community in my district relies heavily on ferry service and no office in the Legislature has worked harder than mine to preserve its funding. The House passed a more modest $13 million in reductions and that was what I begrudgingly supported with my vote.

However, the budget process also involves the Senate and the governor. The governor made it clear he would use his veto power if further cuts were not made. Members in the Senate had a gentleman’s agreement with the governor that if $44 million were cut, additional funding would not be vetoed and the $25.3 million for the Tustumena replacement would be left intact. All information indicated that the governor would in fact veto a higher amount and the replacement funding if the deal was not taken. As his original budget eliminated both the system itself and the Tusty replacement, there was little reason to doubt the threat; furthermore, there were not enough votes for a veto override on this issue.


Although I would have preferred no cuts at all and worked hard for much smaller reductions, $44 million was the amount that would avoid further veto by the governor, spare the Tusty funding from the chopping block, and still provide year-round service to our communities. I will certainly seize any future opportunity to add funding back into the system, but that may not be possible with the current administration in place.

My plan over the next few months is to work closely with AMHS on the upcoming schedule to ensure that the remaining funding is spread across the system in a fair way that leaves as few gaps in service as possible and provides consistent service to Cordova. I will update you as soon as we know more about how exactly the routes and/or frequency of trips will change.

Back on to the budget itself as far as why a special session was necessary. Last week, the conference committee on the budget had agreement on all of the items but one: the size of the Permanent Fund Dividend (PFD). This is not only the largest issue left on the table, it was the largest issue to start with. The sticking point and the negotiations over the next few weeks will involve determining what the right amount is.

The Senate Finance Committee included a full $3,000 PFD in its operating budget; however, the issue is that the Senate itself lacks the 11 votes to approve that amount and it similarly lacks support in the House.

Views of balancing the size of the PFD with providing essential services are diverse in the legislature and do not fall remotely along party lines. The Governor has flat-out stated that new revenue is off the table, which removes a lot of options that should be available for a solution.

As I stated last week, I understand what the PFD means to people in my district, and I want the amount to be as large as possible. However, it is also my duty to pass a responsible budget that allows some form of essential services to continue. The administration’s proposals target services to coastal communities unfairly in a single-minded pursuit of providing as large of a dividend as possible; this is clearly exampled by his proposed cuts to education, VPSOs, healthcare, as well as the complete elimination of our ferry system, the school bond debt reimbursement, and our share of the raw fish tax.

Despite its far-reaching effects, this budget still leaves over a $1 billion deficit in place. Without new revenue and no plan in place, I must support a more moderately sized PFD that allows essential services to continue. I believe this year’s dividend will be a healthy amount, but the exact figure will be determined based on discussions and the ability to gain consensus over the next few weeks. I will update you as soon as I know more.

The crime package, HB 49, is another issue on the call for special session; however, we were almost to a compromise at adjournment and I expect this issue to be resolved early this week. I want to be clear that our non-concurrence vote in the House last week did not denote any opposition to the changes the Senate had made; in fact, most of those changes were ultimately incorporated.  We simply wanted adequate time to review the changes, have a chance to deliberate on them, and combine concepts from both bills.

The conference committee on HB 49 met on the first day of special session, passed its compromise, and completed its work. This legislation is what Alaskans asked for. It’s a repeal and replacement for SB 91 that is tough on criminals and provides judges, prosecutors, and law enforcement the tools they need to address crime in Alaska. I am proud to say that it was also the result of a bi-partisan effort between the House, the Senate, and the Governor.

As I write this, it is Monday morning and a floor vote on concurrence is scheduled for later today. I will be voting yes and expect it to pass.

I will also work with my colleagues and the administration over the coming years to ensure that we do not lose sight of addressing some of the root causes of crime, such as substance abuse and a lack of economic or educational opportunities.

If you would like a more detailed explanation of what the bill does, or the differences between the House’s version, the Senate’s version, and what ultimately passed the conference committee, please contact my office at 907-465-3271.

As far as education funding, which is the last item on the special session call, it is too early to tell how this will be resolved.

Last year, the Legislature forwarded funded K-12 education for 1 year. The new administration is now taking the stance that the appropriation by the Legislature was unlawful and is requesting that the $1.3 billion be put in the budget, subject to veto.

The Legislature’s attorneys strongly disagree with the administration’s legal position. That aside, forward funding was strongly supported by the House, the Senate, as well as then-Governor Walker as a wise move to stabilize our education system for both our children and teachers. The House and Senate are currently standing our ground regarding our commitments to K-12 education.

The synopsis is that Governor Dunleavy wants the funding in this year’s budget; however, that funding was already passed by the Legislature and signed into law by a sitting governor. I hope we can come to an understanding, but it is possible this issue will need to be resolved in the court system rather than special session. I will keep you updated as negotiations proceed.

I will do my best to keep you updated as special session progresses. I work for you and would love to hear your thoughts on these and any other issues that are important to you and your family.


Louise Stutes