Dear Friends and Neighbors,
As we near the close of the legislative session, I wanted to provide a brief update on the status of the budget, education funding, and fisheries legislation.
The operating budget, HB 53, passed the House Floor and was transmitted to the Senate on April 23. The bill is currently under consideration on the Senate Floor. Alaska is facing a stark fiscal reality with the constitutional budget reserve nearly depleted, falling oil prices and state revenue, as well as increasing inflationary and other economic pressures.
Our focus in the House has been on maintaining essential services while recognizing that we simply don’t have the available funding this year to meet all the needs of the state. The budget that passed the House struck a delicate balance between the services coastal communities like Cordova rely on, a modest K-12 education increase, and a PFD the state can afford ($1,414 as it left the House).
The Legislature is required to pass a balanced budget. The governor introduced a budget with a deficit of $1.5 billion, the House was able to trim that down to a deficit of $200 million, and the Senate Finance Committee was able to achieve a slight surplus with a reduction of $97 million in agency spending, as well as lowering the PFD to $1,000.
I want to be clear that I support as large of a PFD as possible; however, it must be balanced against our ability to provide essential services like AMHS, education, and fisheries management, as well as the longevity of the dividend itself.
As I write this, the operating budget is on the Senate Floor for amendments, and I expect it to go to conference committee for final negotiations by early next week. A silent casualty in this process has been the capital budget, which has been whittled down in recent years. For the first time I can remember, there are no district projects in the capital budget this year, which undercuts a critical driver for our economy.
The bottom line is Alaska desperately needs a comprehensive fiscal plan; without one, our state is far too reliant on the whims of oil prices in our budgeting process. New and diversified revenue streams would stabilize our budget, as well as the PFD, and provide Alaskans the certainty they deserve.
Since 2015, a growing number of legislators agree on the need for a fiscal plan, but consensus on what exactly that looks like has been very difficult to achieve. As Speaker of the House in 2021 and 2022, I formed two fiscal policy working groups with members from both sides of the aisle. Those groups conducted a lot of good work, which unfortunately has not led to significant policy changes up to this point. I will continue to do whatever I can to change the political will in the building and move the needle forward on a fiscal plan, as I truly believe it is critical to stabilizing our budget and Alaska’s future.
Moving on to education, it feels a bit like déjà vu this session. HB 69, which contained a $1,000 Base Student Allocation (BSA) increase, passed the House and Senate and was subsequently vetoed by the governor. The Legislature failed to override the governor’s veto in joint session by a vote of 33-27 (I voted yes to override). The House acted swiftly and passed another education vehicle, HB 57, over to the Senate. After passage by the Senate, the House voted to concur with the bill by a vote of 31-8. It is now on the governor’s desk.
HB 57 contains a $700 BSA increase, a 10% funding increase for student transportation, and a $14.4 million boost for correspondence students. The legislation also contains provisions to extend the timeline for charter school applications and make the recertification process easier, provisions establishing a reading proficiency or improvement incentive grant, increases for the secondary vocational and technical instruction funding factor, provisions directing school districts to adopt target sizes for classes, and established a legislative task force to consider additional policy recommendations. The governor has until May 19 to veto the legislation. I believe we have the necessary votes for an override should the governor choose that path.
Moving on to my fisheries legislation, I am pleased to see significant movement on a few bills. HB 116 would allow commercial fishermen to form insurance pools without being regulated as an insurer by the state of Alaska. Pooling can provide a variety of benefits, including lower cost, easier to access insurance for commercial fishermen, as well as policies specifically tailored to the needs of local fishing fleets. I am aiming to get HB 116 passed into law this session. Please type bit.ly/4j9pt6J into your web browser to learn more about the bill or watch the committee hearings.
HB 31, which exempts commercial fishing vessels that are U.S. Coast Guard documented from the duplicative requirement of registering with the DMV, also passed the House by a vote of 37-0. The bill had its second hearing in the Senate Transportation Committee this week, and I am hopeful it will be passed into law this year. Please type bit.ly/42iQlKb into your web browser to learn more about the bill or watch committee hearings.
Since my last update, my office also introduced HB 199, which would enable the Commercial Fishing and Agriculture Bank (CFAB) to refinance or provide new loans at a lowered interest rate of 5.25%. The legislation is intended to keep CFAB in business and assist struggling fishermen during extremely challenging times. HB 199 was heard in the Fisheries Committee last week and was moved to the House Finance Committee earlier this week. To learn more about the bill, please type bit.ly/4cXoNz1 into your web browser.
HB 111, the governor’s freshwater finfish farming bill, is currently in the House Fisheries Committee. I am adamantly opposed to finfish farming of any kind in Alaska. Lifting a ban on freshwater finfish farming sends the wrong signal, at the wrong time to a struggling commercial fishing industry. It also erodes the current ban on finfish farming and provides a foot in the door for possible salmon farming in Alaska.
We need to be focusing on solutions for our fisheries that positively impact our industry, market conditions, and the bottom line for our fishermen, not legislation that distracts from that.
Another bill I am concerned about is SB 161/HB 203, which would simply outlaw trawl fisheries in state waters that make “substantial bottom contact,” but leaves it up to the Department of Fish and Game as to what “substantial” is. Among other fisheries statewide, this legislation would shut down the Prince William Sound fisheries of weathervane scallops, sidestripe shrimp, and pelagic walleye pollock. This bill is not based on science; moreover, it codifies a complex natural resources issue, removing it from the Board of Fisheries’ process, which is a worrisome approach to fisheries management.
Remember, I work for you. Please reach out to me or my staff on any issues important to you and your family.
Sincerely,
Rep. Louise Stutes
Serving Kodiak, Cordova, and Seward
(907) 465-2487
