Senate Majority Coalition Website

State Senator District E

 

Senator Cathy Giessel Newsletter

UPDATES



Issues affecting

your family, community and jobs.

April 20, 2023

Dear Friends and Neighbors,

 

Picture: Yay! Spring! Apple blossoms in our sunroom on Saturday, 4-16.

 

The Senate Finance committee has been working on budget issues with diligence. Now that the House has provided their version of the Operating Budget, that will be the focus.

The Senate is completing the Capital Budget work and will send that to the House soon. Since there's not spare money, it will be a slim document, including only things that match available Federal money.

 

Items in this Newsletter:



·     House Budget Information

 

·     SB 107 CS- 25/75 PFD Split

 

·     Firewise Saturday May 6

 

·     Senate Floor and Committee Meetings

 

·     Alaska Board of Game Proposal Deadline

 

·     Current Topics, Economy, Health Care, Energy

 

·     Alaska History

 

·     Legislative Procedure

 

·     Oil and Permanent Fund Resources

2% Statewide Sales Tax

Yesterday, (April 18) the Senate met with the Governor.

As we discussed stabilizing our economy, the Governor proposed instituting a 2% Sales Tax.

While this may seem to be surprising to some, we have met with the Governor many times during the past 3 months; he has regularly expressed his desire for a fiscal plan that would include new revenue.

In the past few years, one of several ideas from the Administration has been a sales tax. So this proposal yesterday was not a new idea.

 

There are no tax exemptions being proposed by the Governor (such as exempting groceries, medical services, etc.)

I believe that the Governor’s bill will be modeled after South Dakota’s sales tax. His bill is still being drafted.

 

The sales tax bill will be assigned to committees in both the House and Senate, so changes will be made. We will get modeling of the amount of revenue, how it will impact municipalities who already have a sales tax, and how exemptions would look.



I welcome the discussion. The Senate Bipartisan Majority is ready to work with the Governor to stabilize our economy for the future.

 

Our state is losing working-age population residents and is not seeing any new investments.

We are challenged to fund basic state services every year. The Dividend has been very large in the past few years, but the Permanent Corporation tells us that the Realized Earnings of the Fund are about to reduce. It's time that Alaska and its citizens came to the realization that some form of taxation will be needed.

 

Alaska Gov. Mike Dunleavy weighs a statewide sales tax amid broader push for fiscal plan. Alaska Beacon

In a pair of closed-door meetings with members of the Alaska Legislature on Tuesday, Gov. Mike Dunleavy said he is prepared to introduce a statewide sales tax as part of a long-term budget plan for the state.

 

Stevens says Dunleavy discussed a 2% sales tax, other revenue ideas. The Center Square

Alaska Senate President Gary Stevens said Tuesday that Gov. Dunleavy discussed a 2% sales tax with lawmakers, among other ideas, as a way to make up for a nearly $600 million budget gap.

Alaska House approves $6.4 billion state spending plan, sends it to Senate for further work. Alaska Beacon

 

The Alaska House of Representatives on Monday approved a $6.4 billion state operating budget for the 12 months that begin July 1, passing by a 23-17 vote a major hurdle needed for final acceptance of the state's annual operating plan. Critically and controversially, the proposal also contains a deficit of almost $590 million, which would be balanced by spending form the $2 billion Constitutional Budget Reserve (CBR), the state's main savings account. The House declined to use the CBR savings to fill the deficit, which was responsibly wise of them.

CS SB 107 Permanent Fund Dividend

 

This new version of the dividend would safeguard the dividend itself as well as state services funding. (CS for SB 107)

 

The new version of SB 107 provides for a 50-50 Percent of Market Value split of earnings. In short, a “50-50 dividend”.

 

This 50-50 would occur after 2026 if these criteria are met:

·     New Revenue brought in of $1.3 B

·     CBR Balance are minimum of $3.5 B, adjusted for inflation (CPI)

 

Until the 2 criteria are met, the Dividend will be “25-75”. This means 25% of POMV goes to create Dividend of about $1300-1400 for every man, woman and child who qualify as residents of Alaska.

 

If the 25-75 is accepted by the House, the Constitutional Budget Reserve (CBR savings account) would be over $3 Billion. If the 50-50 dividend policy is adopted, the CBR will be a negative $1.5 Billion.

 

We need a minimum of $500 Million in the CBR to provide for cash flow during the fiscal year, as bills come in. Most states have a formal reserve target for their savings accounts. Minnesota, for example, has 2 years of funding in reserve. Applying the MN reserve target, Alaska should have $3.5 Billion kept in our CBR.

 

The Capital Budget this year will be very small, about $200 Million. On average, our Capital Budgets are about $700-800 Million.

 

The Senate is working with the Spring Forecast for oil price of $73/barrel for FY24 (July 1, 2023 through June 30, 2024).

 

Constitutional Budget Reserve (CBR savings account) history:

CBR has been drawn on to cover budget shortfalls every year for 9 years (2013-2021).

No CBR spending was done in 2022 due to high oil prices resulting from Ukrainian War.

 

SBR values over recent 10 years:

·     High CBR value: $13B

·     Dropped as low as $1.5 B

·     Today – about $2.5 B

·     Gap between $2.5 today and $13 high point is owed to the CBR

Senate Floor Session

Week of April 13-19

 

Senate Floor Session 

DATE: 04-17-2023

HB 103-EXTEND ALASKA MINERALS COMMISSION 

The bill would extend the termination date of the Alaska Minerals Commission to June 30, 2034. 

Vote: 19-0; HB 103 passed the Senate. 

 

Senate Floor Session 

DATE: 04-19-2023

SB 58-MEDICAID ELIGIBILITY: POSTPARTUM MOTHERS 

The bill would expand Medicaid eligibility for postpartum (post-childbirth) mothers from 60 days to 12 months. 

Vote: 16-0; SB 58 passed the Senate.

HB 78-AK COMMUNITY HEALTH AIDE APPRECIATION DAY 

The bill would establish September 10th every year as Alaska Community Health Aide Appreciation Day. 

Vote: 16-0; HB 78 passed the Senate. 

 

Senate Committee Meetings

Week of April 13-19

 

Finance

April 13- SB 52-- Increase Base Student Allocation- Invited Testimony

 

April 13- SB 52- Increase Base Student Allocation- Public Testimony

 

April 14- SB 41- Approp: Capital/Supplemental

 

April 17- SB 98- Power Cost Equalization Endowment Fund

 

April 17- SB 34- Citizen Advisory Comm on Federal Areas- Invited and Public Testimony

 

April 18- HB 54- Approp: Supplemental; Reapprop; Amending

 

April 18- SB 74- Physical Therapy Licensure Compact, SB 75- Audio & Speech- Language Interstate Compact

 

April 19- HB 39- Operating Budget/Loans/Fund; Supp

 

April 19- SB 53- Five-Year Involuntary Commitments- Invited and Public Testimony

 

 

Community & Regional Affairs

April 18- SB 79- Reclassification of First-Class Cities

 

 

Education

April 17- SB 99- Financial Literacy Course in Schools

 

April 19- Presentation: Teachers Like Us: Strategies for Increasing Educator Diversity

 

 

Health & Social Services

April 13- SB 24- Public Schools: Mental Health Education

 

 

Judiciary

April 17- Consideration of Governor's Appointees: Alaska Judicial Council

 

April 19- SB 65- Harassment; Sex Offenders & Offenses- Invited Testimony

 

 

Labor & Commerce

April 17- SB 94- Profession of Pharmacy- Public Testimony

 

April 19- SB 45- Direct Health Agreement: Not Insurance

 

 

Resources

April 14- SB 92- State Ownership of Submerged Land- Invited Testimony

 

April 17- SB 69- Geothermal Resources- Invited and Public Testimony

 

April 19- Consideration of Governor's Appointees: Board of Game

 

 

State Affairs

April 13- SB 71- Pay for AK Defense Force- Public Testimony

 

April 18- Consideration of Governor's Appointees: Commissioner of Corrections

 

 

Transportation

April 13- SB 123- License Requirements: Comm. Drivers- Public Testimony

Current Topics

Foiled! NIST unwraps what's baking under aluminum in its labs. NIST

It's national bake week here in the U.S. If you're celebrating in your own kitchen, you may find yourself needing some aluminum foil. Whether you need a sheet of foil to keep that apple pie warm or you're making something in an aluminum foil baking pan, foil has lots of uses in a baker's kitchen.

 

New hangar will make Nenana a base for drone cargo testing. Geophysical Institute Alaska

Nenana's airport will be the new site of a 4,800-square-foot hangar for the Alaska Center for Unmanned Aircraft Systems Integration.

 

Juneau expects to see more cruise passengers than ever this year. KTOO

 

U.S. Forest Service seeks local workers amidst national labor shortage. KFSK

 

DOT talks summer road projects on the Seward & Sterling Highways. KSRM

Summers in Alaska means road construction season across the state. With summer fast approaching, the Alaska Department of Transportation is gearing up with road projects on the Seward and Sterling Highways.

 

ANC Ranks 3rd in the World for Air Cargo. Alaska Business

 

Former Anchorage Police Chief McCoy takes job in Tempe. Alaska's News Source

Anchorage's former top cop is taking on a new role in Arizona, according to a press release.

 

Girdwood couple and friend missing on Mexico-to-San Diego sailboat trip. ADN

Three experienced American sailors, including a couple form Girdwood, Alaska, are missing during a trip from Mexico's Baja California peninsula and would have been battling strong winds and 15-foot waves from the outset, Coast Guard officials said Monday.

 

The iconic Alaskan Salmon Thirty Salmon takes its last flight. Alaska Beacon

Early Monday morning, passengers in Seattle sat awaiting their flight to Ketchikan where their plane, a Boeing 737 with an enormous salmon painted on the side, would make its final run as Alaska's most well-known flight. The iconic Salmon Thirty Salmon was ready to board passengers for the final flight of its 18-year tenure serving as Alaska's famous flying fish. I'm so sad to see this salmon be retired.

 

 

Fisheries

ADF&G predicts weak pink salmon harvest, tightens Chinook harvest restrictions. KSTK

Southeast Alaska's pink salmon run is predicted to be weak this summer.

 

Fisheries protester removed from Alaska Capitol in handcuffs, arrested after fight. Alaska Beacon

A man urging Alaska lawmakers to take action against trawling was removed from the state Capitol in handcuffs and banned from the building after disrupting a committee hearing on Monday. After his removal, former fisheries worker Eric Osuch went to the nearby State Office Building and was arrested by the Juneau Police Department after a fight was reported there. He was charged with criminal trespass, the department said.

 

 

Politics

Alaska Permanent Fund Corp. to end in-state investment program. ADN

The Alaska Permanent Fund Corp.'s board of trustees voted Wednesday to wind down its in-state investment program, citing potential conflicts with the board's overall mission.

 

Opinion: Alaska's elections are broken- but not for the reasons people say. ADN

 

Rising trend: Independent America. Axios

We spend our days captivated by people with the most power and the biggest mouths.

 

Ranked-choice voting would eliminate Denver mayoral runoffs. Governing

Denver's crowded mayoral election earlier this month and the pre-planned runoff in June have prompted a new push to implement ranked-choice voting in future city elections.

 

Alaska Senate working to close budget gap with House on PFD, education funding. Alaska's News Source

With less than 30 days until the end of legislative session, Alaska lawmakers say they are working to balance the state budget- but gaps still exist between the House and Senate.

 

 

Economy News

Opinion: An even better way to balance Alaska's budget. ADN

Let's only pay the PFD to low-income people- because the net effect of his plan is just that. This way, we save the cost of standing up an organization in Juneau to collect income taxes and issue credits.

 

If the Legislature's budget reflected Alaskan's values. ADN

Alaska's House of Representatives has finalized an operating budget after rejecting amendments to fund literacy, child care, Pre-K education and a range of public health programs designed to reduce the rate of child trauma and abuse.

 

Americans aren't ready to retire. Axios

After a tumultuous year in the markets, America's preparedness for retirement has gotten shakier.

 

ABA Foundation's recession survival guide. American Bankers Association

 

 

Healthcare News

America's STI problem. Axios

The number of sexually transmitted infections, including chlamydia, gonorrhea and syphilis, surged in the U.S. in the second year of the pandemic, reaching more than 2.5 million cases in 2021, according to a CDC report released Tuesday.

 

Alaska young adults tripled e-cigarette use in recent five-year period, report says. Alaska Beacon

Alaska posted the nation's highest rate of increase in electronic cigarette use by young adults from 2016 to 2021, according to a report tracking patterns in all the states.

 

Senator tries third time for tax on e-cigarettes, vape sticks. Chilkat Valley News

For the third time in as many legislative sessions, Kodiak Sen. Gary Stevens is leading the push to get a tax on e-cigarettes and vaping products into state law.

 

New campaign addresses eating disorders with a message of positivity for Alaska's young athletes. ADN

Lifting a suitcase into the Uber was hard. Food was something to be carefully controlled. Running had become more like a punishment than a source of joy.

 

 

Energy News

Dead trees in the Arctic store massive amount of carbon. Earth.com

 

Illinois, Indiana, Michigan partner for clean hydrogen hub. Governing

A coalition based in Illinois, Indiana and Michigan has taken the next big step in its bid to obtain up to $1.25 billion in federal funding for a regional clean hydrogen hub intended to reduce planet-warming carbon dioxide emissions.

Alaska History

·     April 19, 1867: U.S. Senate approves purchase of Alaska

·     April 12, 1794: Captain George Vancouver and his ships entered Cook Inlet and discovered it was not a river.

·     April 16, 1959: The first Alaska State Legislature adjourned after being in session since January 26.

·     April 17, 1869: The Army established Fort Kenay at the old Russian town of Fort St. Nicholas, today known as Kenai.

·     April 18, 1913: John F. A. Strong, owner of the Alaska Daily Empire, a Juneau newspaper, was appointed Governor of Alaska.

·     April 19, 1933: John W. Troy, owner of the Daily Alaska Empire, was inaugurated as the 12th governor of Alaska.

Legislative Procedures

 

Length of Legislative Sessions. AS 24.05.150(b) states "the legislature shall adjourn from regular session within 90 consecutive calendar days, including the day that the legislature first convenes in that regular session." This Statute is obsolete, because the complexity of our budget (driven by the Dividend) and the financial instability of oil revenue, the main source of state funding.

The State Constitution has a different definition. ASC Art. II, Sec. 8 states "the legislature shall adjourn from regular session no later than 120 consecutive calendar days from the date it convenes." This has been the realistic time frame to accomplish the work needed.

 

After Day 90, are we in "Extended Session"?

NO. ASC Art. II, Sec. 8 states that the legislature shall adjourn from regular session no more than 120 consecutive calendar days from the date it convenes except that a regular session may be extended once for up to 10 consecutive calendar days. An extension of the regular session requires the affirmative of at least two-thirds of the membership of each house of the Legislature.

 

Uniform Rule 46. Confirmation of Appointments.

Appointments by the Governor are made pursuant to AS 39.05.080. Such appointments are subject to confirmation by a majority vote of the full membership of the legislature in joint session (ASC Art. III, Secs. 25 and 26).

Alaska Oil Resource Values

 

ANS crude oil price (4/19/23): $82.53

The current budget requires $89 per barrel to be fully funded.

Price on 9/30/22: $86.91

Price on 6/29/22: $116.84

Price on 3/8/22: $125.44

Price on 12/22/21: $75.55

ANS production (4/19/23): 482,558 bpd

 

ConocoPhillips plans $1B a year spend in legacy fields alone. Petroleum News

News about its Alaska business from ConocoPhillips' 2023 Analyst & Investor Meeting on April 12 was in the company's updated 10-year plan.

 

ANS hits upper $80s. Petroleum News

Alaska North Slope crude leapt into the upper $80s April 12, up $1.58 to close as $86.45 per barrel. The price bump came as a moderate U.S. inflation data lifted hopes that the U.S. Federal Reserve's cycle of interest-rate hikes might soon cease.

 

Alyeska Pipeline names John Kurz president, CEO, effective April 10. Petroleum News

Alyeska Pipeline Service Co. said that John Kurz has been named president and CEO, effective April 10.

 

Permanent Fund 4/19/2023: $76,788,400,000

Value 9/30/22 : $70,625,300,300

Value 8/31/22 was: $73,670,500,000 

Value 4/30/22 was: $81,387,500,000

 

Principle - $61.7B

$52.1 B savings, royalties, other deposits

$9.6 B unrealized gains

(special transfers from Legislature - $4 B in 2021; $4.943 B in 2020)

 

ERA - $12.6 B (was $16.9B May 2022)

$3.5 B set aside for FY24 POMV

$4.2 B for FY23 Inflation Proofing

$ 2.2 B unrealized gains

$4.0 B uncommitted realized earnings

PFD payout from ERA, 1980-2022: $26.6 B

 

Mineral Prices

April 19, 2023

Gold - $1995.40

Silver - $25.27

 

 

"To hell with politics!

Let's do what's right for Alaska!"

 

U.S. Senator Ted Stevens

(Senate service 1968-2009)

Feedback is always welcome.

Have a great week!

 

Cathy 

 

Personal Contact:

907.465.4843

sen.cathy.giessel@akleg.gov

 

My Staff:

·     Chief of Staff: Jane Conway (from Soldotna)

·     Office Manager: Paige Brown (sometimes ski-bum in Girdwood)

·     Resources Committee Staff: Julia O'Connor (from Juneau)

·     Legislation Staff: Ryan Rivers (from Anchorage)

 

 

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