Great to meet some of the Chugiak-Eagle River Chinooks. The baseball team is made up of college athletes from around the country. This is the first trip to Alaska for the players shown here – and they all seem to be enjoying it.
(L to R) Justin Gomez from California, Haden Mixon from Louisiana, Jeremy Johnson from Georgia, and Adam Rojas from Illinois.
Hope to see you at the ballpark this summer! Love to support both our Chinooks and Mat-Su Miners teams! You can find game schedules by visiting www.cerchinooks.com and www.matsuminers.org.
Alaskan Friends and Neighbors,
Hope this midpoint of the summer finds you well! The latest legislature news is that on Saturday we passed HB111 ending the cashable oil tax credit program. This will save the state $200-$300 million per year. It took numerous proposals and back and forth negotiations, but fortunately resolution was reached.
See Hot Topic #1 to learn what’s next. I’ll give you a hint: roads and ports and airports. What will follow then? Another special session on tax measures? That’s the billion dollar question. Hot Topic #2 explains a bit about the oil tax credit bill we passed Saturday. Hot Topic #3 unspins some spin.
And if you’re curious what I’m hearing from constituents, I’ve got quite a collection for you this week. A number of very interesting remarks – you won’t want to miss these three sections of quotes. Be sure to check out the photos too – you’ll see a number of familiar faces from the district.
One final and important suggestion! Stay tuned for my next Facebook Live. If I’m at a place where I can broadcast this evening at 7pm, I’ll look forward to your input and questions. Last week’s was full of good information – scroll down to the very bottom of this newsletter to view it.
Working on your behalf,
Update from Division of Agriculture Director (and constituent) Arthur Keyes, including privatization of the meat plant in Palmer, the status of my hemp bill, SB 6, and the $5/Week Alaska Grown Challenge in produce departments in grocery stores across the state.
We also discussed the idea of holding a chefs’ competition using Alaska grown products to increase restaurant promotion of local foods.
You can see the HB111 Conference Committee preparing to begin proceedings in the background on the TV – monitoring their progress was my next order of business after my meeting with Mr. Keyes.
Curious What Input
Constituents and Other Alaskans
are Giving?
(Group 1 of 3)
“Hammond’s plan. No new taxes at all! Those of us in the private sector are still hurting.”
“I am for a sales tax if not applied to food, prescriptions, NO gas tax!”
“I just wanted to let you know I think you’re doing a great job for our district and our state! Stay courageous!”
“[Politicians] need to help lead this state to live within our means! I am so very thankful for your work and your desire to openly share this information.”
“Do your job!! Cut taxes!!!”
“For what’s it’s worth, my perspective is that the cutting the PFD in half IS an income tax albeit a flat one. That’s $4,000 from my family this year, not sure how that would have compared to an income or sales tax.”
“Thank you for voting your conscience Senator Hughes!”
Alaska Department of Transportation
Summer Road Work Information
For overview of planned projects throughout the Central Region:
Central Region Road Construction 2017.
For more detailed information on specific projects:
Central Region Projects.
We now have a little office space more convenient for our Chugiak, Peters Creek, Mirror Lake and Eklutna area residents. The red arrow in the top photo points to the sign out front and the address: 12641 Old Glenn Highway (Eagle River).
Because I only have one aide and we’re covering Mat-Su, as well as Juneau, please call 907-622-8963 to schedule a time to connect so one of us can be sure to be at this location when you come by. Buddy Whitt keeps a clean desk! We run a fairly paperless operation, which works well considering our need to be mobile.
Curious What Input
Constituents and Other Alaskans
are Giving?
(Group 2 of 3)
“How much government does a state with the population of a small town need? The answer is simple: not much! The immediate focus must be returned to reducing the size and scope of government to where it can live within its diminishing means!”
“I will add my comment to the unsupportive, which is to say I am not in agreement with your [budget] vote.”
“There is no point in continuing AGDC. The paradigm needs to change.”
“I do support an income tax if needed to capture the out of state workers who make money in our state but pay nothing into the infrastructure that supports those industries.”
“No taxes. Make some actual cuts….Keep up the good work.”
“I am with you all the way, Shelley. Thank you for working so hard for us. I know these punitive extra sessions are a pain and sacrifice. Thank you for hanging in there and doing your best.”
“The Alaska legislature is spending too much!”
Always a pleasure to spend time with friends at the Chugiak-Eagle River Senior Center. This week I had the chance to join many of them for lunch and conversation about what is important to them and the direction of our state.
Curious What Input
Constituents and Other Alaskans
are Giving?
(Group 3 of 3)
“Thank you for putting up with all the BS in Juneau. You are a smart woman and could be a real leader for us all. Even though we fundamentally disagree, I appreciate the time you take to listen to us. And once in awhile we agree 100%.”
“Yes, more trimming is definitely needed, we cannot sustain our level of state spending even if we tax all our citizens to within an inch of starvation.”
“I’d like to strongly urge you and the other legislators to issue a sales tax as a solution to the State’s fiscal problems and NOT an income tax. I think it wouldn’t be fair that only income earners would have to pay tax; a sales tax will more evenly distribute the burden.”
“Kicking the normal Alaskan in the teeth, while we are ALREADY struggling, by cutting the dividend again this year is not the answer!”
“Senator, what we require are wise, necessary and proven economic solutions, which will include a bitter but short term pill to swallow by downsizing government.”
“Just wanted to thank you for popping in to the senior center in Palmer. Thanks as well for holding your ground and fighting against the income tax. Pleasure meeting you.”
(Not from a constituent but interesting to see the reach we Alaskans have!) “Well done, your people can be proud of you. Greetings from Germany.”
Here’s my first viewing of a brand new statute across from the State Capitol of Secretary of State William H. Seward, commemorating the transfer of Alaska to the United States from Russia 150 years ago (1801).
As you may recall, not everyone at the time thought the purchase was a good idea. Carl Schurz described Seward as “One of those spirits who will sometimes go ahead of public opinion instead of tamely following in footprints.” As Alaskans, let’s all foster a bit of Seward’s spunk and spirit in ourselves.
– Hot Topic #1 –
Second Special Session Update
It’s Over. What’s Next?
The Second Special Session ended Saturday evening, the 30th and final day, after completing work on HB111 to end the cashable oil tax credit program. Immediately after gaveling out, the Senate called itself back into a new special session to address the capital budget, and is waiting as of this writing to see if the House will do the same. If the House doesn’t, a special session will be called at a later date for the purpose of completing the capital budget.
Because the federal fiscal calendar begins October 1, and federal transportation match dollars are at stake (usually at $9 federal for every $1 state), it’s important that the capital budget be passed sooner rather than later. Because the state’s fiscal calendar begins July 1 and state capital funds for FY18 are not yet available to match federal dollars slated for use July 1 to October 31, some projects have and will come to a halt until the legislature passes SB23, the capital budget bill.
According to the State Constitution, the governor can call a special session and limit the agenda. The Constitution does not specify that the agenda can be limited when the Legislature calls itself into special session.I believe it would be most efficient to have only one item on the table: the capital budget. If revenue measures are added to the mix, it’s likely the capital budget would get caught in the quagmire, jeopardizing projects statewide and millions in federal dollars.
So to answer the question (“what’s next?”), the capital budget will be next. The shared sentiment is that it would be best if it were passed by the end of this month. If you’re now wondering: anything after that? The answer to that big question is what everyone would like to know! If you browse the list below, you’ll see three revenue bills that Gov. Walker put on the first special session call that he could resurrect and place on a call again.
1. HB 57 Operating Budget – Passed Legislature
NO LONGER ON CALL – ITEM COMPLETED
2. HB 111 Oil Tax Credits – Passed Legislature
NO LONGER ON CALL – ITEM COMPLETED
On Saturday, July 15th, after more than 6 months of discussions, hearings and negotiations, the legislature passed HB111. The House and Senate concurred with the conference committee report on the final evening of a 30-day special session. Members of the conference committee were Rep. Tarr (Co-Chair – lead), Rep. Josephson, and Rep. Talerico, Sen. Giessel (Co-Chair), Sen. Stedman, and Sen. Olson.
3. SB 26 Permanent Fund Restructuring – In Conference Committee
NOT ON CALL BUT COULD BE ADDED BACK
The conference committee for SB26 did not meet during the first or second special session, so there have been no changes or compromises presented. SB26 restructures the Permanent Fund, changing the calculation of the PFD to a percent of mark value (POMV) model. The bill also caps the dividend amount to Alaskans and allots a portion of the POMV annual draw from the earnings reserve for funding state services. Members of the conference committee for SB26 are Sen. MacKinnon (Co-Chair – lead), Sen. Hoffman, Sen. Egan, Rep. Foster (Co-Chair), Rep. Seaton, and Rep. Thompson.
4. SB 23 Capital Budget – Awaits Senate Concurrence
CURRENTLY ON CALL
It is expected that the Senate will not concur with the House version (it currently contains the House version of the operating budget). Once a conference committee is assigned to SB23, their first action would be to remove the operating budget from the bill, and then proceed to work out a compromise of the actual capital projects.
5. HB 60 and SB 25 Motor Fuel Tax – In House and Senate Finance Committees
NOT ON CALL BUT COULD BE ADDED BACK
Both versions are in their respective Finance Committees. The governor may add this bill back to the call for consideration now that the operating budget bill has passed, since the governor still appears to want additional revenue measures as soon as possible.
6. SB 12 Income Tax – In Senate Labor & Commerce
NOT ON CALL BUT COULD BE ADDED BACK
The Governor had included in the first special session call an act that would create a broad-based tax. In his “compromise plan”, the governor proposed SB 12 be used as the broad-based tax. The monetary impact on working Alaskans is smaller than the earlier income tax bill, HB 115 ,but the SB 12 tax is still bracketed, based on income. It is possible the governor may add this bill to the call now that the budget bill has passed.
7. HB 159 and SB 79 Opioid Prescriptions – Passed Legislature
NO LONGER ON CALL – ITEM COMPLETED
PLEASE NOTE: As things progress each week, I will update this list, but to receive the most up-to-date information you can sign up for text alerts (see below) or can click on the links for each bill within this newsletter.
If you want to stay on top of the scheduling, a short text alert can keep you informed. It’s easy to sign up. Text a bill number (ex: SB23) to 559-245-2529 to enroll. You’ll receive an enrollment confirmation and instructions on how to stop receiving the alerts.
Not state legislative news but important national news involving Alaska. Plus the footage is fascinating! On July 11, the Missile Defense Agency tested the THAAD (Terminal High Altitude Area Defense) system stationed on Kodiak Island against a simulated IRBM (Intermediate-Range Ballistic Missile).
The IRBM was launched from a C-17 aircraft just north of Hawaii last Tuesday, and the THAAD interceptor launched from Kodiak successfully intercepted and destroyed the test missile. Alaska’s strategic location is important as the threats and political rhetoric from North Korea increase. Click on the picture above for a full video of the missile defense test.
– Hot Topic #2 –
– HB111 Oil Tax Credits –
Compromise Reached after House Offered Death-Knell Provision Rejected by Senate
Last week, we discussed at length the differences between the Senate and House versions of HB111. This past Wednesday, the two sides met for the first time since early June. It was a very odd meeting in my opinion. Typically, when a bill is placed on the call by the governor, each legislative body passes a resolution that brings a bill back for consideration in conference committee. The Senate did just that on Wednesday morning; the House waited until the end of the week as the session deadline loomed and brought the bill back retroactively.
As it turns out, the House had a brand new proposal, something that had not been part of the discussions over the months. They wanted to remove key provisions from the bill, which would in essence disallow carry-forward losses (accrued during development years) to be deducted from taxes (once in production). In my opinion, without this standard business practice – used across the globe in all industries – oil development would have been drastically jeopardized in our state altogether.
The Senate would not agree to the removal of the carry forward loss provision but did agree to outstanding carry forwards reducing in value by 1/10th of the initial amount, beginning with the eighth year after earned for carry forwards generated for producing areas, or the tenth year after earned for carry forwards generated from non-producing areas.
Alaska’s oil tax policy is complicated and a number of other provisions in statutes, some dating back to ACES (passed in 2007) were adjusted via HB111. For more detail, look at the webpage for the bill on the legislative website, including under the documents tab where there are many explanatory and helpful resources and materials.
Although the process was arduous and compromise was required, the goal to end the cashable oil tax credit program was accomplished. A bi-cameral, bi-partisan working group will be reviewing our oil tax system with expert consultants (hired by the Legislative Budget and Audit Committee) over the coming months, considering their recommendations, and bringing any agreed upon recommendations back to the legislature.
Photo credit to Associated Press.
Jacob Pennell of Wasilla has been a Senate page for three years and has done a fantastic job. After graduating from Colony High, he served in the US Army. His next venture? He’s headed to Los Angeles to pursue a degree and career in acting and comedy. He’ll be attending the LA branch of the New York Film Academy. On his final day, I got his autograph – to be the first to ask him as well as to avoid long lines once he’s famous! Best of luck, Jacob!
– Hot Topic #2 –
Insights on the State Budget – What are the real numbers and what do they tell us?
This is an excerpt from my opening greeting in last week’s newsletter. It has been a discussion on radio talk shows this past week so thought I’d run it again for your perusal.
I want to point out that the governor’s recent claim that “total state spending on the operating budget has been cut $1.9 billion since fiscal year 2015—a 27 percent decrease in three years” is misleading to say the least.What makes up that $1.9 billion in cuts? Operational dollars to programs and to the departments? Hardly.
According to Legislative Finance, $508.6 million is primarily due to the reduction of what we’re paying to small companies for oil tax credits owed to them by the state.
$582 million out of the $1.9 billion is due to the reduction to Alaskans’ PFD checks last year.
Those two items total about $1.1 billion of what you thought were hardcore reductions to programs and departments.
So what makes up the difference between the $1.1 and the $1.9 billion? On the surface, it sounds like a solid $790.6 million decrease in spending for agency operations. The catch is, that this $790.6 million less in unrestricted general fund spending to agency operations is accompanied by (and offset by) an increase of $450.6 million in spending on agency operations from other fund categories (federal, designated, and other).
So the real decrease in agency operation spending over those 3 years? $340 million. And here you thought the operating budget for programs and departments was reduced by $1.9 billion. Not even close.
We need honesty and transparency – not spin – when we talk about the budget.
Here’s some straight talk – my forthright assessment: leaders who lead the public to think programs and departments have been cut by $1.9 billion are simply trying to convince you that we can’t cut anymore and that it’s time to tax you; it’s time to take half your PFD this year – and a greater share of your PFD in the future – plus it’s time for a substantial broad-based tax.
This brings me back to why I was a no vote on the budget. The track we’re on, based on the budget bill that was passed a few weeks ago, will require half your PFD this year – and a greater share of your dividend in future years – PLUS a substantial broad-based tax (such as an income tax or sales tax). If Alaskans are fine with this track, that’s how the legislature will proceed. If Alaskans aren’t okay with that, they will need to speak up decisively, loudly, and insistently.
One more budget tidbit shocker: the Legislative Finance Director expects the unrestricted general fund (UGF) spend for agency operations to be greater in FY18 than it was in FY17 once the $57 million increase in statewide items, the $64 million increase in dividends, and the supplemental appropriations (unknown amount at this time) are added in. Keep in mind that the UGF is where the fiscal shortfall resides. It is the funding category filled – now partially filled – by oil revenue. If we’re spending more UGF in FY18 than we spent in FY17, we’re going in the wrong direction….. Again, if Alaskans are okay with that track, that’s how the legislature will proceed. If Alaskans aren’t okay with that, they will need to speak up decisively, loudly, and insistently.
Wondering what’s happening with a certain bill? A short text alert can keep you informed. It’s easy to sign up. Text a bill number (ex: SB1) to 559-245-2529 to enroll. You’ll receive an enrollment confirmation and instructions on how to stop receiving the alerts.
You can’t tell here but it was raining when I took this photo down the hill from the Capitol last week. It was 80 degrees and sunny back in the district on this particular day.
While getting wet on my walk back up to my office, I was determined to look at the bright side of my present circumstances and noticed this lush and lovely patch of vegetation – possible because of Juneau’s rainforest climate.
Serving You on Committees
Please note that my following committee assignments will be changing due to my exit from caucus at an upcoming Committee on Committees meeting (date to be announced).
- Senate Finance — Member
- Senate Resources — Member
- Senate Education — Member
- Senate Labor and Commerce — Vice-Chair
- Unmanned Aircraft Systems Legislative Task Force — Co-Chair
- Joint Armed Services — Member
Serving You on Finance Subcommittees
My seats on these subcommittees are also subject to change.
- Department of Education and Early Development
- Department of Law
- Department of Administration
- Department of Transportation and Public Facilities
For additional information, contact my
Chief of Staff: Buddy.Whitt@akleg.gov
907-622-8963 (Eagle River office)
907-376-3725 (Mat-Su office)
For information on bills I’m co-sponsoring, click here.
For information on all bills filed by others, click here.
Legislation Update
Bills I’m Sponsoring
Click on bill number for more info. Detailed descriptions are also available in previous editions of newsletters which you can find here.
***Please note that due to the close of the regular legislative session, the earliest any of the following bills (which have not yet passed) will see action will be January 2018 when the legislature reconvenes in regular session.***
• SB6 — “Industrial Hemp Production” — The bill had its second hearing in House Finance two weeks ago but was not moved out of committee nor scheduled for a floor vote prior to the end of the regular session. This means the bill will not be passed in 2017. When the next regular session begins in January 2018, I am hopeful the bill will move to the House floor for a vote.
• SB16— “Digital Assets Act”— Even though my office began work on this bill last August, the House version of the bill leapt ahead and passed. (My office provided the language to Rep. Claman about 3 months ago, so I’m happy with the language in his HB108 obviously!) I carried HB108 on the floor and am proud to say that it passed the Senate unanimously. It awaits the governor’s signature.
• SB32 — “Interchangeable Biological Products” — The House Finance Committee held an initial hearing on the bill. We await scheduling for a second hearing and public testimony. Because the regular session has ended, the earliest this can now occur is January 2018.
• SB96 — “Alaska Education Transformation Act” — Senate Education Committee Bill Relating to Education and School Districts is in the Senate Finance Committee. I am hopeful SB96 will continue to move through the committee process in 2018.
• SCR4 — “Task Force on Unmanned Aircraft Systems” — Passed unanimously both the House and Senate, and awaits the governor’s signature.
• SB111 — “Alaska State Defense Force Powers” — Introduced and assigned to State Affairs and Finance Committees. I am hopeful SB111 will receive hearings in January.
• SB119 — “Alaska Health Care Consumers Right to Shop Act” – Introduced and assigned to Labor and Commerce as well as Finance. I am hopeful SB119 will receive hearings in January.
– Let Your Voice Be Heard –
– Participate in Public Testimony –
Public testimony is available for every bill heard in a committee. Follow bills you have interest in on the Alaska State Legislature Page. To testify, go to your local Legislative Information Office (LIO) which you can find here. If you are unable to testify, written testimony can also be submitted by sending an email to the committee.
Public testimony times on bills
that might interest you:
Find it here!
For budget bills, tax bills, and Permanent Fund bills in the Finance Committees, please arrive 15 minutes early for sign-in process, and please arrive 15 minutes prior to the end of the allotted time or testimony may close early. Public testimony may be limited to two minutes per person, so it’s best to prepare concise comments.
Join Shelley to ask questions and give your input on Facebook Live Monday evenings at 7pm at www.facebook.com/AKShelleyHughes.
(Please note that schedule is subject to change. Look for updates on our Senator Shelley Hughes Facebook page for latest information.)
TIPS TO STAY IN THE LOOP
More important than ever!
TIP #1: The Alaska State Legislature web site is the place to track bills, locate and contact your legislators (session), and access committee information. Questions? Try the help wizard or call 1-800-478-4648.
TIP #2: SMS Bill Tracking! Once you know what bill(s) you want to monitor, here’s a convenient way to track what’s happening. Text any bill number (ex: SB1) to 559-245-2529 to enroll in text alerts for that particular piece of legislation. You’ll receive an enrollment confirmation as well as instructions on how to unsubscribe.
TIP #3: How to Get in Touch with Shelley! Give our office a call at (907)465-3743 or 800-565-3743 in Juneau or (907) 376-3725 or (907) 622-8963 in district or send an email to Sen.Shelley.Hughes@akleg.gov.
Buddy Whitt – Chief of Staff
Buddy.Whitt@akleg.gov
Mat-Su Office
600 E. Railroad Avenue
Wasilla, Alaska 99654
907-376-3725
Chugiak Office
12641 Old Glenn Hwy, Ste 201
Eagle River, Alaska 99577
907-622-8963
Best,
Copyright © 2017 Senator Shelley Hughes. All rights reserved.
