Senator Mia Costello, the sponsor of the Senate version of HB132, and I take a moment to celebrate the bill’s passage outside the doors of the Senate Chambers. The legislation allows ridesharing companies like Uber and Lyft to operate in the state, increasing transportation options for Alaskans and visitors as well as opening up job opportunities for residents. This bill requires background checks for drivers and includes provisions for local municipalities. I co-sponsored this piece of legislation and was happy to see it cross the finish line.
Greetings, Fellow Alaskans:
If you’re wondering why we’re still in Juneau, from my perspective and in the simplest of terms: the House Majority and Governor Walker want new taxes implemented and old taxes raised.
Our one and only constitutional requirement as a legislature each year is to pass a budget. The Senate passed and sent the budget bill to the House on April 6. The House Majority wants higher budget numbers and believes it’s time to tax the people of Alaska to pay for it. The Senate wants lower budget numbers and decisively voted down the income tax. Now Governor Walker has called the legislature into a special session to again consider taxing Alaskans.
My question is, should the state government really be coming to you with its hand out now asking for more? Is it time for taxes? I say no. We spend 4x what Idaho spends per person. We have a spending problem not a revenue problem.
The truth is, we can still make multiple, sensible reductions without sacrificing essential services. (And, I don’t expect us to get down to the level of Idaho, because Idaho’s local governments provide services that we in Alaska rely on the state to provide.) How do I know we’d be okay as far as essential services? Accounting for population changes and inflation – so in today’s dollars – we are spending about $1 billion more than we were when Gov. Knowles exited office in 2002. We were fine then and we’d be fine now (healthcare costs are higher now so this is one item we’d need to factor). You can see my Facebook video from Monday, May 15, for specific areas where we can yet reduce – and I’ve got more ideas than what I list there that I’ll include in my Facebook Live tonight.
In my view, reductions are mathematically necessary as we face our new fiscal reality. At the same time, I get it that we can’t close the gap by cuts alone, so bear with me and hear me out.
Now that oil revenue to the state is down from highs of $7-8 billion per year to $1-2 billion per year, we must wake up and realize that we simply cannot afford the size and scope of our budget and government of the past. Period. We just can’t. Our population is too small. If we extract large sums from families, from small businesses, from the private sector to prop up a large budget, we’ll plunge our economy into a tailspin and deepen and prolong the recession. Do we want that to happen before we admit that the large state budget we’ve enjoyed in the past isn’t sustainable? I don’t.
To fill the fiscal gap while we make reductions, we’ll need to use some reserves. Don’t panic. We won’t drain them. Please note that we have $16+ billion in readily accessible reserves and tens of billions more in other assets. Without changing the PFD calculation and without touching the principle, we can use some of the interest income (earnings reserves) from the Permanent Fund. Based on arithmetic, based on the shortfall we’re working to shrink, we’ll need to use some of that earnings reserves going forward. Again, we can do this without wiping out our savings. So what’s the remainder of my proposal?
1. Economists have advised we take 3 years to close the gap to avoid a crash landing (particularly important when we’re already officially in a recession). Let’s take their advice.
2. Use some earning reserves, without changing the PFD calculation, to help close the gap.
3. Let’s reduce this year and next and in the third year reassess.
4. After reductions to better align the budget and size of government with the delivery of essential services and what we can afford – and depending on where oil prices land – if there’s still a gap, let’s consider a sales tax. A sales tax would take the least out of Alaskans’ pockets, the most from out-of-staters, and according to experts, cause the least collateral damage to the economy in both the short and long term. By including both goods and services while excluding groceries and medicines, a sales tax is actually quite fair.
So that is what I believe is the best course forward. Who’s with me?
(And even though I’d love to be home with my family right now, I’ll stay the course happily to do what’s right for our state – and that right now is pushing back from taxes and doing my best to protect Alaskans’ wallets.)
While things will continue to stay very busy, my staff and I will continue to listen to you and do our best to respond to your questions and comments as quickly as we can.
Of course, like I hope you do every newsletter, please be sure too to view the photos to learn more about what’s happening in our state’s capital – you may even see someone you know and/or learn about a new development on an issue you’re passionate about! Constituent quotes await you as well – always interesting to know what others are saying.
Remember too my Facebook Live tonight at 7:00 p.m. Yes, we are still having it! Your questions will be front and center, so please tune in! (And you can scroll to the bottom to see the last video.)
Working daily in Juneau for you,
– A Few Constituent Quotes You Don’t Want to Miss –
These quotes were some of many Facebook comments following the outline of my proposal as included in my opening remarks above.
“I appreciate you taking the time to communicate this idea to us… It seems sensible and responsible. I would support it moving forward. Please do not let a broad based tax be hurriedly forced on us by the House and Governor and oppose any attempts to do so in a special session…”
“Sounds like a logical and well thought out plan to me! Stick to your guns and don’t back down! Go get ’em!”
“I’m with you. That is exactly what we need to do. Great job! You just have to convince the majority to vote along with you.”
Governor Walker issued the adjacent proclamation Wednesday evening, calling the Legislature into a special session. Revenue measures on his agenda include a broad-based tax, a fuel tax, the increase of any other existing taxes, and a Permanent Fund restructuring – PFD reducing – bill. I will continue to stand on your behalf against these unnecessary measures (my opening above explains why in case you scrolled past it).
Thank you, Joshua Banks (my aide) for attending the Military and Veteran Appreciation event Friday evening at the Chugiak-Eagle River Senior Center with your wife, Marissa. Wish I could’ve been there but glad that you, as a Veteran, got to be part of the event and honored too. There are some wonderful, wonderful elderly Veterans who are involved with the Chugiak-Eagle River Senior Center. I so appreciate each and every one and am grateful for their service as well as for those currently serving on active duty. I also want to point out that my aide Buddy Whitt is also a Veteran; he served as a Marine. With Memorial Day coming up soon, with family members and friends and neighbors who are serving or who have served, it’s a good time to reflect on the good military men and women who’ve stepped up on our behalf, and particularly a good time to honor those who gave the ultimate sacrifice.
– A Constituent Quote You Don’t Want to Miss –
“You hang in there, Shelley. This state spending is OUT OF CONTROL! Someone has to have the courage to do what is right and stop this madness. Working people have had enough! I never thought of moving out of Alaska but I am seriously considering it now and so are others. It is just getting too expensive. What is going to happen when all the working people leave?? There goes the state’s tax base!!! The legislature AND the governor better start taking some reality pills!”
The Senate Finance Committee at work last week. My goal is to ensure that the fiscal measures protect Alaskan jobs and promote a healthy economy. Even when the number of formal meetings is few, my work toward this goal continues daily.
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.
Senator John Coghill and I on the Senate floor discuss the passage of SB 55, which is one of two bills aimed to increase public safety and address issues related to legislation passed last year on the same topic. The second bill, SB 54, is still in the House, but I look forward to its passage as well to ensure that Alaska remains a safe place to live.
– A Constituent Quote You Don’t Want to Miss –
“More taxes will cause more job loss and loss of more people! Then who will be here to pay the bill?”
The Valedictorian for the 2017 Class of Alaska Middle College giving her speech. Finishing one chapter and beginning a new one! It’s a thrilling and important time for young graduates. I wish them all the best of blessings in their pursuits.
– A Few Constituent Quotes You Don’t Want to Miss –
In response to Governor’s Proclamation to call a Special Session.
“Gov. Walker should not be doing that. A waste of money. Our money shouldn’t be wasted.”
“Just say No! I would rather see our Government halted than either a tax or PFD Raid!”
“This basically means that the governor put everything back on the table to tax Alaskans out of the state.”
And there are always a few sprinkled in the many that take a different stance. Here’s one example.
“Most people get FIRED when they can’t do their jobs.”
In case you’ve not heard, the project to reconstruct part of KGB Road is still going forward and is currently in the final stages of the design phase. It will be important to stay in the loop with this project, as I know it will impact many of us in the Mat-Su. There will be an open house tomorrow (Tuesday) May 23rd from 4-8 pm at the Wasilla Senior Center if you’d like to learn more about the project.
– Hot Topic #1 –
The bills that are currently in conference committee in the Special Session are HB57 (Operating Budget) , HB59 (Mental Health Budget), and SB26 (PFD Restructuring).
Rep. Paul Seaton, the Chair of the Conference Committee for the Operating Budget, scheduled the committee’s preliminary organizational meeting last Monday. If the differences between the House’s version and the Senate’s version of the budget are not yet worked out and the bill passed by June 1st, the governor will have to send out pink slips; to avoid a state government shutdown, the bill will need to pass prior to July 1st. As mentioned earlier in this newsletter, the House’s numbers are higher than the Senate’s numbers.
To review a summary of the differences between the House and Senate’s version of SB26, the Permanent Fund Restructuring bill, click here. Unlike the operating budget bill, the legislature is under no constitutional obligation to pass this bill. If an agreement between the two versions is not reached, the bill will not move forward.
As I predicted, after the Senate passed HB111, the House chose to not concur with the Senate version. The Senate version eliminates the cashable tax credits for oil companies and significantly reduce the State’s credit liability. The House wants a provision in the bill to raise oil production taxes. So it looks like HB111 will also head to a conference committee. Like the prior bill discussed, if agreement is not reached, the bill will not move forward.
We are still under the “24 Hour Rule” which allows committee meetings to be scheduled just a day in advance.
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: SB1) to 559-245-2529 to enroll. You’ll receive an enrollment confirmation and instructions on how to stop receiving the alerts.
– A Constituent Quote You Don’t Want to Miss –
“Glad to see the meat plant in Palmer in private hands now but sorry to see that your bill to allow farmers to grow hemp to feed their animals didn’t make it. Any chance it can still pass?”
The answer is yes, but the earliest it can now happen is in January of 2018 when the next regular session of the legislature convenes (unless the governor put the bill on a call for a special session which is unlikely!).
Serving You on Committees
Please note that the only committees on which I serve that are active currently – to deal with key legislation – are 1) Senate Resources (to deal with the oil tax bill), 2) Senate Labor & Commerce (to deal with the income tax bill), and 3) Senate Finance (to deal with two bills just mentioned as their second committee of referral).
- 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
The subcommittees have ”closed out” for now and the FY2018 budget is currently awaiting finalization in a joint conference committee. My seat on these subcommittees, however, continues through next year, so if you have ideas for efficiencies, reductions, and improvements in any of these areas, don’t hesitate letting me know.
- Department of Education and Early Development
- Department of Law
- Department of Administration
- Department of Transportation and Public Facilities
For additional information related to Senate Education and Senate Labor & Commerce, contact my excellent aide: Joshua.Banks@akleg.gov
For additional information related to Senate Resources and Senate Finance, contact my amazing aide: Buddy.Whitt@akleg.gov
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.
For information on bills I’m co-sponsoring, click here.
For information on all bills filed by others, click here.
– 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 evening at www.facebook.com/AKShelleyHughes.
Watch tonight at 7pm!
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 send an email to Sen.Shelley.Hughes@akleg.gov.
If you are looking to get in contact with a specific legislative aide:
Buddy Whitt – District Director, Legislation
(907)622-8963 – Buddy.Whitt@akleg.gov
Joshua Banks – Research, Legislation
(907)376-3725 – Joshua.Banks@akleg.gov
Best,
Copyright © 2017 Senator Shelley Hughes. All rights reserved.
