Senate Majority Coalition Website

State Senator District E

 

Senator Cathy Giessel Newsletter

UPDATES



Issues affecting

your family, community and jobs.

 

 

June 29, 2023

 

 

Dear Friends and Neighbors,

 

 

Photo: The lilacs outside of the Anchorage Legislative Building

 

 

Items in this Newsletter:

·     Fiscal News from Legislative Finance

·     State Land Selection Relinquishment

·     ASD Letter on School Funding Vetoes

·     Food Bank of Alaska

·     Current Topics, Economy, Health Care, Energy

·     Resource Values, Permanent Fund

 

 

 

Fiscal News

An update from Legislative Finance

June 22, 2023

 

June Newsletter

Welcome to the Legislative Finance Division's interim newsletter! We intend to send these out about once a month until the January session. These newsletters will provide updates on the State's fiscal situation and keep legislators, staff, and the interested public informed of LFD publications.

 

If you'd like to unsubscribe, you can do so here. If this was forwarded to you, you can subscribe using the same link.

Fiscal Update with Enacted Budget

On June 18, Governor Dunleavy signed HB 39 (the omnibus appropriations bill, including operating, capital, and supplemental appropriations) and HB 41 (the Mental Health appropriations bill). You can find comprehensive budget reports on the enacted budget here.

A preliminary short fiscal summary of the enacted budget is below. The detailed fiscal summary will be released with the Summary of Appropriations later this summer. 

 

 

The FY24 agency operations budget of $4.4 billion is $146.3 million (3.5%) higher in UGF than the FY23 Management Plan. Agency operations have grown by $507.0 million (13.1%) since FY18, which was the lowest recent year. However, the Anchorage Consumer Price Index has increased by 18.1% between the first half of that fiscal year and April of 2023 (the most recent data available), so spending growth has been less than inflation since that point. The $4.4 billion for agency operations is slightly below the FY14 budget; since then, Alaska has experienced inflation of 20.5%.

The graph below shows agency operations spending since FY14, showing the reductions starting in FY15 and the increases over the past two years. The orange bars show the impact of adjusting prior years for inflation.

 

 

The UGF capital budget of $362.7 million is 51.8% smaller than the FY23 capital budget, but still ranks as the second-largest capital budget since FY15 due to constrained capital spending from FY16-21.

 

FY24 Budget at Various Oil Prices

The Department of Revenue's Spring Revenue Forecast projects an average oil price of $73 per barrel in FY24. At that price, the FY24 budget is estimated to have a surplus of about $287 million. If the prices average less than $68 per barrel in FY24, the budget would have a deficit, so $68 is the break-even price of oil for the FY24 budget. The legislature did not include deficit-filling language from the Constitutional Budget Reserve (CBR), so if oil falls below that point the deficit would be unfilled.

Appropriation language was included in the FY24 budget that if revenue were to exceed the Spring Forecast, the amount of the excess will be split in half between the CBR and a deposit into the Dividend Fund for an FY25 Energy Relief payment in addition to the FY25 Permanent Fund Dividend. That Energy Relief appropriation is capped at $318.3 million (of excess revenue) which would pay about a $500 per-person check and would be reached if oil averages about $83. At this price $318.3 million would also move into the CBR and any revenue accrued above the $83 level would flow 100% to the CBR.

 

 

What's Next?

Now that the budget has been signed, LFD will finalize the Enacted Budget Books (formerly called the Conference Committee Books), which provide highlights on budget changes for each State agency, as well as detailed reports showing how the budget for the agency changed throughout the budget process. Those will be published as they are completed and will be available here.

We will also finalize the Summary of Appropriations, which is the historical record of the budget bills. It includes a detailed fiscal summary, detailed tables and budget reports, and copies of the actual appropriations bills. When it is complete, it will be available here

 

 

State Land Selection Relinquishment

Dept. of Natural Resources & Bureau of Land Management

 

The documents attached below outline the requests for state land selection relinquishment by other state entities.  

At Statehood, Alaska selected lands it wished to have transferred to the State. We got most of that land transferred to us. But the full transfer has not yet been completed; the State still has land selections that haven’t been finalized. But the State also “over-selected”; in other words, placed selections on more land than was needed to complete the fulfillment of state lands.

So that’s why BLM is asking the State to consider relinquishing some of the selections.

In the case of the land near Nome, DNR is asking for public comment on the relinquishment.

 

 

 

Letter from ASD on Gov. Dunleavy's vetoes

 

Thank you for the historic vote of support to adequately fund public education during this year’s legislative session! Unfortunately, the Governor slashed the much-needed funds in half and put Alaska’s public education system at risk of failure. We need your support more than ever now. Please call a special legislative session to ensure adequate funding for Alaska’s schools.

 

While ASD has a balanced budget for FY 2023-24, it is reliant on $65 million in one-time funds and includes an increase in class sizes at all grade levels. Looking ahead to FY 2024- 25, ASD will have a structural deficit of roughly $90 million, hindering ASD’s ability to recruit and retain its educators, and to support the increased costs associated with implementing the Alaska Reads Act. Given the uncertainty of the State funding of education, ASD may use the $25 million in one-time funds it expects to receive in FY 2023-24 to help offset the budget deficit in the following year

 

 

 

 

Food Bank of Alaska

 

Reading the latest Flood Bank of Alaska report:

Top Food Drives listed Anchorage School District Bear Valley Elementary School as on of the top participants.

I want to say: Thank you, Bear Valley Elementary School 

 

Food bank of Alaska website

 

 

Current Topics

Alaska state ferry Columbia tied up for repairs. Alaska Public Media

The 50-year-old state ferry Columbia is out of service for at least a week for two maintenance issues — a bow thruster problem and leaking pipes. The ferry was scheduled to sail through Southeast Alaska and south to Washington state all summer. Now, it’s in the Vigor shipyard in Ketchikan until at least June 28.

 

Alaska schools struggling to keep up with the cost of food. KFSK

Alongside Governor Mike Dunleavy’s vetoes to education funding, Alaska schools are about to find out how much money they will receive from the federal government for school meals this year. As school districts look ahead at their 2024 budgets, many are under pressure because of steep inflation in the price of food.

 

Stressed, Overwhelmed, Out of Shape? There is a park for that. Governing

Public trust in government may be on shaky ground, but there’s one thing government does that almost every American appreciates. More than 80 percent of the population visited a local park facility last year. According to the National Recreation and Park Association, 9 out of 10 adults in the U.S. agree that parks and recreation is “an important service” provided by their local government.

 

The best and worst run cities in America. Governing

Looking at 149 big and small cities in the country, researchers were able to quantify the complexities of city management. They constructed a “Quality of Services” score made up of 36 metrics grouped into six service categories, which was then measured against the city’s per capita budget.

(Spoiler alert: Anchorage #68, Fairbanks #47. See article for details)

 

A crucial van service in Anchorage's public safety system is short-staffed, straining city fire and police. ADN

Securitas, the multinational, multibillion-dollar private security firm that the city pays to run the Anchorage Safety Patrol, or ASP, has been unable to fully staff the service amid a nationwide shortage of emergency medical technicians, company officials said last month. (unfortunate that we have to use an out-of-state provider for these services.)

 

Counting in Iñupiaq, Alaska students build clocks using Kaktovik numerals. ADN

Kaktovik numerals were invented by a group of middle schoolers about 30 years ago. Composed of straight strokes, the numbers visually reflect the composition of the number.

 

SNAP combats racial divides, study finds. Axios

Racial disparities in food security persist among low-income households that don’t participate in the Supplemental Nutrition Assistance Program (SNAP), but not among those that do, according to a new study.

 

 

Economy

New Anchorage airline aims to bring year-round tourism to Alaska. Alaska Public Media

A new Anchorage-based airline said the company hopes to bring hundreds of jobs and a substantial increase in tourism business to Alaska.

 

This year's PFD is a budget-balancing $1,304. Is this the new normal? Juneau Empire

But even among Dunleavy supporters, there’s recognition that lower PFDs may have to be part of Alaska’s future as oil revenue continues its general decline.  “In my judgment what it comes down to is if we’re going to maintain the kind of dividends people want we’re going to have to impose an income tax and I oppose an income tax,” said Denny Dewitt, a Juneau resident who has spent many years working for legislators and several governors, including Dunleavy. “Things are different than they were three years ago or five years ago. The economics really don’t support a huge dividend.”

 

Individuals' share of charitable giving. Axios

Here, from Giving USA, is the decline of charity — the flip side of the rise of philanthropy. Increasingly, it's a small number of ultra-high net worth individuals, alongside even fewer old money foundations, who determine whether charities thrive or wither away. 

My comment: I think “Pick, Click, Give” is an exception and quite uniquely great program in Alaska. But I think there is another point to this - ultra-high net worth individuals and companies determine election contributions. That’s why election-funding reforms in Alaska are so important. The Legislature needs to pass HB 36 or a citizens’ initiative needs to do that.

 

Wisconsin GOP lawmakers approve pay raise for state employees, especially corrections officers. AP News

Wisconsin Republican lawmakers passed a plan Thursday to raise pay for state employees, including boosting starting wages for corrections officers to $33 an hour.

 

Aniak residents shocked by quadrupled power bills. Alaska Public Media

At Aniak’s school, the electricity bill went from around $7,700 to almost $24,000. “Just honestly, like, I’m standing in my district office right now and all the lights are off. We’re all working in the dark,” said Madeline Aguillard, superintendent of the Kuspuk School District. My comment: The increase in the BSA funding (school funding) was in response to this kind of cost increase, as well as others, that school districts are facing. The Governor vetoed the additional funding for added fuel costs for state departments as well.

 

 

Fisheries

In "major victory" for Southeast Alaska trollers, federal appeals panel reverses fishery closure. Alaska Beacon

"It's a major victory," Alaska Fish and Game Commissioner Doug Vincent-Lang said in a brief phone interview. "We can go fishing."

 

Defending Alaska seafood, commissioner questions sustainability of Russia-caught fish. Alaska Beacon

The commissioner of Alaska’s Department of Fish and Game has urged the organization that certifies seafood harvests as sustainable to revoke its endorsements for Russian-caught fish. Commissioner Doug Vincent-Lang is calling on the Marine Stewardship Council to stop certifying Russian harvests.  He made both a moral argument and a plea in defense of the Alaska seafood industry. Any support of Russian business ultimately supports that country’s invasion of Ukraine, he argued.

 

Dunleavy again vetoes research project on salmon bycatch. Alaska Public Media

Among the projects Gov. Mike Dunleavy vetoed from the state budget on Monday was salmon research to help determine the causes of the chinook and chum crisis in western Alaska. Dunleavy vetoed $513,000 for research on the origins of salmon caught by accident in the Bering Sea pollock fishery, as well as the origin of salmon intercepted by fishermen off the Alaska Peninsula in what’s known as “Area M.” Dunleavy vetoed the project last year, too.

 

 

Politics

Alaska legislators lack the votes to override Gov. Dunleavy's budget vetoes. Alaska Beacon

No Special Session to override Governor vetoes...stymied by the opposition of lawmakers who sit in the predominantly Republican House majority caucus, plus three conservative Republicans in the Senate.

 

Will Alaska lawmakers override Gov. Dunleavy's public school funding veto? Probably not. Alaska Public Media

 

Governor leaves Mat-Su priorities intact in veto actions, borough assembly told. Mat-Su Frontiersman

The Matanuska-Susitna Borough got through Gov. Mike Dunleavy’s budget veto process with its major state budget priorities intact, borough manager Mike Brown told the Mat-Su assembly at its Tuesday, June 20 meeting.

 

Governor appoints Republican donor to University of Alaska regents. ADN

Gov. Mike Dunleavy appointed a Fairbanks Republican political activist and business owner to the University of Alaska Board of Regents, which oversees the state’s public universities. Seth Church, who does not have a university degree, will serve an eight-year term subject to legislative confirmation.

 

 

Health Care

Military in Alaska struggles with 'constant strain' of child care shortage. ADN

The U.S. military is struggling to provide child care to its service members in Alaska, which is directly affecting operations and putting a strain on those serving in uniform.

 

Some Alaskans start losing Medicaid coverage as state begins reviewing eligibility after pandemic pause. ADN

Nearly 3,000 Alaskans were dropped from Medicaid this month as the state resumed its annual eligibility reviews, which had been paused during the COVID-19 pandemic.

 

'Nothing else should matter': At Anchorage roundtable, Sullivan addresses youth mental health crisis with U.S. Surgeon General. Alaska Public Media

U.S. Surgeon General Vivek Murthy called youth mental health "the defining public health challenge of our time" at a roundtable in Anchorage on Monday.

 

 

Alaska Oil Resource Values

 

Alaska North Slope crude oil price (6/28/23): $74.01

 

FY24 budget (begins 7/1) is fully funded at forecast $73/barrel oil.

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 (6/28/23): 471,575 bpd

 

The global stakes over a Minnesota mining plan. Axios

Minnesota regulators are beginning to review a key nickel mining proposal that promises to help the U.S. develop domestic supplies of raw materials for climate tech.

 

Battery politics. Axios

The U.S. remains behind China in the race to produce electric vehicle batteries and components — but a domestic supply chain is starting to take shape. Biden administration officials are taking a kitchen sink approach to boosting production of EV parts — and the effects could be political as well as economic.

 

Carbon Capture and Storage: What It Is- and Isn't. American Petroleum Institute

What is CCS?

As the conversation around CCS (Carbon Capture and Storage) intensifies, let’s make sure we know what we’re talking about when it comes to an important technology for reducing emissions across a range of U.S. industrial sectors.

 

About 'Peak Oil Demand'. American Petroleum Institute

People have been projecting “peak oil” since M. King Hubbert came up with modeling in 1956 that showed global oil production would crest between 1965 and 1970. Of course, we now know that the analytics back then didn’t account for the advances in technology and innovation seen in recent decades, and global production has grown more than 60% since 1973.

 

 

Alaska Permanent Fund

The financial statements for the Alaska Permanent Fund as of May 31, 2023, show the Fund's total value was $76.1 billion

 

The Principal total includes:

• $52.2 billion in permanent savings contributions

• $ 9.1 billion in unrealized gains

 

The Earnings Reserve Account total includes:

• $4.8 billion of uncommitted realized earnings

• $3.5 billion for the FY24 POMV draw

• $4.2 billion for FY23 Inflation Proofing of the Principal

• $2.2 billion in unrealized gains

 

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

2023: $2.2 B

2024: $881.5 M

 

 

 

 

D = Democrat

R = Republican

U = Undeclared

N = Nonpartisan

A = Alaska Independence Party

L = Libertarian

Alphabet codes from: Alaska Division of Elections

 

 

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 (from Anchorage/Girdwood)

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



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