Happy to wrap up a few things in my Juneau office this weekend before putting my car on the ferry this morning to drive back home to the district. Also happy we avoided a government shutdown (but not happy with the how high the budget is that passed). I’ll fly back to vote on HB111, the oil tax credit bill, if it comes to the floor.
Alaskan Friends and Neighbors,
The good news is that a state government shutdown was averted last week when an operating budget was passed by the legislature on Thursday.
The bad news is that it did not include the level of reductions necessary to keep us on track to avoid new and increased taxes. For this reason, and because the PFD was cut in half without regard to the formula in statute, when spending has not been realigned to fit our new fiscal reality, when the PFD revenue option impacts only Alaskans (unlike a sales tax which would spread the burden to 2+ million non-residents), and when we’re in a recession, I could not support the bill. I was a no vote.
Because the Senate Majority has a rule that members must vote for the budget, I chose to exit the caucus in order to vote to represent what my constituents asked me to stand for.
I understand the consequences* of my no vote and do not begrudge them; I do, however, believe that the archaic caucus rule should be annulled. Most states have no such rule; it’s time for Alaska to allow legislators to vote according to their commitments to their constituents and according to their conscience.
Before discussing a couple points about the budget bill, I’d like to mention that the Senate Majority is made up of fine people who I consider friends. I’m thankful the Senate Majority defeated the income tax bill. I appreciate its leadership team’s efforts to avoid a shutdown under difficult circumstances – working with a House Majority and governor with very different priorities. I want to thank them for their commitment to ensuring the process moved forward, and for understanding the importance of narrowing the focus to the budget bill and their subsequent request to the governor for this narrowing.
The operating budget bill reduces the use of undesignated general fund (UGF) dollars by $179 million, some due to actual reductions in line items, but others due to fund source changes with no reductions in the line items themselves. The problem with the latter is that some of these UGF reductions won’t hold next year because one-time funds that were available this year to backfill the UGF won’t be available next year. I don’t have the exact number yet of real reductions that will hold, but it is less than $75 million.
The Senate Majority’s plan was to reduce $300 million in UGF this year (followed by $250 million next year, and $200 million the following year). Adherence to this plan would stave off taxes. ‘
Some might say I “broke my contract” with the caucus by not abiding by the rule to vote for the budget, and I did, but the break was mutual. The plan agreed upon by the caucus, to reduce $300 million this year (in reductions that would hold), was breached to such an extent that it was out of alignment with my commitment to my constituents and to such an extent that it is difficult to see how taxes can be avoided. If the initial stake would have been driven in the ground by the Senate much farther out, to allow for compromise and negotiations to land us somewhere closer to the $300 million, Alaskans would be in a better position.
The budget restored the $69 reduction to K-12 education and reduced the PFD for this fall from an estimated $2300 down to $1100. The budget included $57 million owed in oil and gas tax credits to small companies. The budget also restored in full the mistaken reduction to the Pioneer Homes. You can browse the budget here for hundreds of other items.
$2.4 billion was drawn from the Constitutional Budget Reserve (CBR) to help fund the budget. Drawing from the Earning Reserves Account (ERA) this year would have been at an estimated cost of $300 to $700 million due to the high rate of return the ERA is presently earning. As of May 31, the CBR held $4.81 billion in funding and the ERA was an estimated $12 billion (up from $10 billion last year).
On Friday, Governor Walker added HB 111, the oil tax credits bill, to the special session call. The bill is in conference committee. The capital budget still must be addressed but it could be passed as late as August without jeopardizing federal match dollars. Scroll down to Hot Topic #1 for an update on these and on the revenue measures that the governor could put back on the call again.
Of course, like I hope you do every newsletter, please be sure too to scroll down to learn more about what’s happening – 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. Don’t miss the bear update – or as some who’ve weighed in would say, the “poor bear” update.
Since I’ll be on the road, I won’t hold my usual Facebook Live tonight but have posted a short clip below for you to view.
Working on your behalf,
*Consequences for removal from the Majority Caucus typically include loss of and change/reduction in committee assignments (I’ve been on Finance, Resources, Labor & Commerce, and Education and 4 Finance Subcommittees: Law, Administration, Education, Transportation), staff reduction, and smaller office space. A meeting of the Committee on Committees at a future date will determine the changes in committee assignments.
While waiting to get my car worked on to prepare for the drive home through Canada, I made my first public remarks after voting no on the budget bill in this short clip.
– GRATEFUL FOR FEEDBACK –
FROM CONSTITUENTS & OTHER ALASKANS
After hearing about my vote against the budget, hundreds of Alaskans reached out in support. Here is a small sampling:
“I can’t seem to find the right words to tell you how proud I am for the way you stand up for Alaskans. You represent the type of lawmakers that we need more of in Juneau. Thank you for your service and all of your sacrifices.”
“Good job, Sen. Hughes. I spoke with quite a few people at work today about your vote last night and every single one thought you did the right thing. People out here want the budget really cut and are upset the Senate didn’t push for steeper cuts to avoid taxes, knowing they were going to have to negotiate.”
“Shelley, thank you for standing up to do the right thing!”
“Thank you for your hard work and good judgment, Shelley.”
“Thank you for your vote today. I’m proud to have voted for you as you stand firm.”
“I wanted to take a moment to say thank you for sticking up for us yesterday. I appreciate your efforts and want you to know you have my continued support in the fight ahead. Stay the course and keep defending us.”
“Thank you so much for voting the way we asked you to. I feel so blessed that we have you to represent us.”
“Thank you for standing your ground and voting your conscience! We are behind you 100%! Keep up the good work.”
“Not an easy decision. Congratulations, Senator Hughes, on your political courage. Tough consequences, but you have proved to be a stateswoman concerned for all our citizens and the future of Alaska.”
“Thank you very much for being the only one down there that had the nerve to do what needs to be done. I am glad to have you representing my family.”
“Spending is still out of control. Thank you Senator Hughes for standing up for Alaskans who are tired of seeing the spending and lack of courage and leadership to cut the budget down to what we can truly manage considering current oil prices and what is projected for the next decade. The State budget wasn’t reduced enough. Next session we’ll see income tax and our PFDs reduced further or completely taken away. Does no one else see this?”
At the date of this writing, out of the hundreds of contacts since my vote, only two were not supportive:
“Senator Hughes there are a LOT of your constituents (like myself) that do NOT want you to represent us this way. It seems that you may forget sometimes that you need to speak and think in a compromise that represents ALL of us.”
“Help me understand how losing a seat in the Senate majority caucus and a seat on the finance committee by voting against the budget translates into a “courageous” vote for her constituents. There are misplaced priorities here, and I believe Sen. Hughes has erred. As one of her constituents, I am troubled by her decision because she has lost any clout she has in the Legislature and we as constituents have lost meaningful representation.”
Friend and former colleague from my prior work in the health care arena, David Morgan. A numbers guy, David is visiting Juneau as part of a work project. He’s also interested in reviewing my healthcare cost transparency and shared savings incentive bill. He has a number of ideas for state savings related to spending by the Department of Health and Social Services which I hope can be vetted for next year’s budget.
– A Quote from a Constituent You Don’t Want to Miss –
“I am a blue collar mechanic that is concerned about the state of our budget. I work in an independent repair shop that over the last few years has had to adjust spending because of the uncertainty of the state economy. I would estimate that we have had to trim our operations by 30 – 40% to stay in business. In my opinion, I would like to see the state government make the same adjustment.
I don’t see any reason to single any assistance program or government agency out. We just need to do a flat cut across government. I would like to see a 20% minimum cut to the administration of each agency holding their hand out. I am specifying administration because I find it stupid that when we make a cut say to education that the teachers lose jobs instead of the unneeded pencil pusher behind the desk.
I am concerned that if this does not get resolved with cuts, the increased taxes will cause a lot of people to find residence someplace else and those taxes will be worthless.”
With the carrot bowl empty (Palmer carrots!) and the chocolates dwindling in the Juneau office, it’s far past time to come home to the district!
– A Quote from a Constituent You Don’t Want to Miss –
“Hold fast on your line of thought. The Governor’s “compromise, do it my way” is unacceptable. Use the reserves, continue to cut back, drop everything to do with the LNG pipeline, don’t fund it unless constitutionally mandated.”
– Hot Topic #1 –
– Second Special Session Update –
A quick reminder: unlike during the regular session, only items put on the call by the governor can be addressed during the special session.
The operating budget, HB 57, and the opioid bill, HB 159, passed on Thursday. On Friday, Gov. Walker added HB 111 to the call. The governor can add other items to the special session call, including bills he’d removed earlier to narrow the focus on the budget. I’ve included those bills and their status in the update below.
1. HB 57 Operating Budget – In Conference Committee
NO LONGER ON CALL – ITEM COMPLETED
The conference committee met last week, methodically adopting points of agreement, line item by line item. Around noon on Thursday the committee completed its work and moved the Conference Committee Report out of committee. The Conference Committee Substitute for HB57 was received back that evening from Legislative Finance and Legislative Legal Services with changes incorporated and put on members’ desks on the floor shortly before the vote. The Senate adopted the Report on a vote of 16 yeas and 1 nay; the House followed suit with a vote of 31 yeas and 8 nays. If you would like to view meetings and discussions that occurred in the conference committee, please click HERE.
2. HB 111 Oil Tax Credits – In Conference Committee
CURRENTLY ON CALL
The governor added HB111 to the special session call on Friday. The House and Senate versions of the bill both end the use of refundable (cash) credits for oil and gas companies, but the House version includes an increase in the production tax, while the Senate version does not. There are a few other differences, including the interest rate and pertaining to ring-fencing. Members are Rep. Tarr (Chair – lead), Rep. Josephson, and Rep. Talerico, Sen. Giessel, 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. Members of the conference committee for SB26 are Sen. MacKinnon (Chair – lead), Sen. Egan, Rep. Foster (Chair), Rep. Seaton, and Rep. Thompson.
4. SB 23 Capital Budget – Awaits Senate Concurrence
NOT ON CALL BUT COULD BE ADDED BACK
This bill will be brought back up to be dealt with at a later date. It is expected that the Senate will not concur with the House version (it currently contains an operating budget in it that differs from the one passed last week!). The capital bill would then go to conference committee. Because federal match funds pertain to SB23, the bill could pass as late as this fall, prior to the start date of the federal calendar on October 1.
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.
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
The House concurred with the Senate’s changes on Thursday. HB 159 has passed the legislature and will head to the governor’s desk for his signature.
PLEASE NOTE: We are still under the “24 Hour Rule” which allows committee meetings to be scheduled just a day in advance. 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.
– Info You Might Like to Know –
On Monday, July 17, the Alaska Historical Commission will be meeting in Anchorage at the BP Energy Center. The meeting agenda includes renaming three bodies of water in the Mat-Su from their current names to their original names. The meeting will include a public comment period.
Lake Creek, a tributary of the Yentna River is a very popular fishing destination for sport anglers from around the world. The commission will discuss renaming it to Hneh’itnu Creek.
Bulchitna Lake sits adjacent to Lake Creek, near the Yentna River. The commission will consider renaming this to Hneh’itnu Lake.
Weiner Lake is located adjacent to the Glenn Hwy, just east of Chickaloon. The lake is stocked each year by ADF&G and is a great spot for family fishing and other activities. The commission will consider renaming it to Purinton Lake.
f you are unable to attend and would like to make a public comment concerning these items or any subject that you believe important to preservation of Alaska’s history, you can call 1-800-315-6338, Code 13101#
The purpose of the Alaska Historical Commission is to identify, review and preserve Alaska’s history.
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.
– Hot Topic #2 –
Will Revenue Measures
Survive the 2018 Ballot?
This article ran last week but I am including it again in case you missed it, as the two referendum efforts are increasingly relevant. Based on the passage Thursday of the high operating budget with limited reductions, it appears the stage is being set for taxing Alaskans.
Alaskan Facebook users don’t have to browse too extensively to see posts and comments about what’s happening in Juneau, nor what residents are planning to do depending on what happens in Juneau. When people’s wallets are at stake, the interest is high.
Discussion on social media as well as in the halls of the Capitol have folks wondering whether two separate referendum efforts being organized to reverse potential action of the legislature would be successful on the 2018 ballot. One is preparing to overturn any income tax bill that passes. The other effort is planning to undo a Permanent Fund restructuring (and PFD reduction) if SB26 were to pass.
Both efforts seem to be gaining traction as Alaskans take notice. It should comes as no surprise considering the 2017 Dittman poll which showed more opposition than support for both measures in 2017 and an increase in opposition against each since 2016.
At the same time opposition to an income tax and PFD reduction is increasing, the support for a spending cap has grown to 66%, likely as a result of Alaskans’ greater awareness of the fiscal challenge and the revenue measures under consideration.
It’s clear that Alaskans want to see less spending and more fiscal constraint. It’s also clear that Alaskans don’t want to cough up part of their income to the state government nor give up part of their PFD.
To review the Alaska Chamber survey in it entirety, click here.
– A Quote from a Constituent You Don’t Want to Miss –
“Thank you, Shelley, for standing up for us. I think like you do. Our state government needs an overhaul, and we need people like you who will work for the people in your district and not do things just because others are doing it.”
My desk on the Senate floor. A good cup of coffee is always helpful, especially with a bill packet this size. This photo was taken 2 weeks ago. Photos of my grandchildren help remind me what’s important and why I’m doing what I’m doing.
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:
TONIGHT’S FB LIVE IS CANCELLED.
I’LL BE DRIVING THROUGH CANADA SOMEWHERE
AT ABOUT THAT TIME!
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.
