Welcome to the Real Deal With Kiehl!

Oily Options & Speedy Spending

March 31, 2023

Dear Friends and Neighbors,

I'm so sorry I missed last week's newsletter. Here's my shot at giving you two weeks of value—without doubling the length:

Rep. Story & I were honored to present a Legislative Citation to Lions Ed & Janice Hotch for their work and dedication organizing Gold Medal (plus we got to watch Juneau win the B bracket!)

With all the speed of government

The legislative process is not known for great speed. It's designed for thorough review and deliberation. But sometimes there’s such clear, critical need we can speed bills through.

This week we passed a “fast track” supplemental spending bill to tackle the SNAP benefits backlog and the shortfall in defense attorneys that's clogging the court system. These programs are in crisis. I’m glad the legislature came together to help struggling Alaskans.

Still, I’m worried it's not enough to do the job. We’re so backlogged on SNAP (formerly known as food stamps) that it’s all hands on deck. That's starting to cause backlogs in sister programs like Medicaid and cash assistance. Compounding the problem, the state needs to recertify all Medicaid recipients this spring. That's a couple hundred thousand people. The department's request seems low to me, but they say they're certain.

This supplemental money is just to get them through the end of June. We’ll get an update before we finish the budget for the new fiscal year. I’ll keep half an eye on it and see if things need shoring up.

The last piece of the “fast track” supplemental is a draw from savings to fill the hole in our current year budget. I voted for it—the state can’t be bouncing checks. But it's a temporary fix at best. Alaska's savings won't last without new revenues. More on that below...

Thanks to everyone who came to our Town Hall Wednesday. Rep. Hannan, Rep. Story, & I appreciated hearing from you!

What goes up must come down

You’ve probably heard folks compare Alaska's revenues to a three-legged stool. Very roughly, a third of our money comes from the federal government, a third from our investment earnings, and a third from oil.

The federal bucks usually come from some formula or other, and they're pretty steady.

We’ve done a lot to stabilize investment revenue too. It's almost all Permanent Fund earnings, and while the stock market bounces around like a zodiac ignoring a small craft warning, we smooth that out. The state takes 5% of the value of the fund, averaged over the first five of the last six years. Not only does that calm the waters, it lets us know how much we’ll have a year in advance.

Then we get to the very wobbly oil money. The Department of Revenue updated its forecast this week and it wasn’t pretty. Lower-than-expected production and prices teamed up to leave a $200 million hole in the current year budget. The governor’s proposal for next year is $900 million short. And it doesn't yet include any boost for K-12 education.

But in case you had any lingering optimism, there’s another complicating factor: with the Willow project approved, we’ll soon see a short-term drop in our oil tax collections. That’s because ConocoPhillips can deduct what it spends building and drilling at Willow to reduce the taxes on their existing fields.

In the very short term, we’ll need to draw from savings to pay the bills. Those savings aren't as big as they should be, but they'll get us through another year or two. The revenue picture makes it tough to invest in the services Alaskans need from our government.

So we simply must look at our revenues. This morning in the Senate Finance Committee we saw a bill to tweak our oil production tax. It protects the state coffers a little better when prices are low-to-middlin' by reducing a per-barrel credit. It ties deductions for capital expenses more closely to the field where the money gets spent. And it makes sure all oil companies pay a corporate income tax, regardless of whether they file with Uncle Sam as a "C" or an "S" corporation.

Some of those changes are no-brainers, and some may not stand up to scrutiny. I'll talk more about them in the weeks to come. But I've said for years we need to make some smart adjustments to our oil taxes.

I'll keep working with my colleagues on a fiscal plan that stabilizes our state for the long term. Because as long as a third of Alaska's income comes from just one industry, we'll have fluctuations. And oil is a particularly volatile thing to build a budget on. And what goes up reliably comes back down.

Senate Finance deliberations.

Stopping slicks

Alaska has a whopping 66,000 miles of coastline. That's more than all the Lower 48 states put together. Our bragging rights come with a slew of challenges. Chief among them: with that much water to cover, emergency response is a logistical vexation.

When it comes to things like preventing and cleaning up oil spills, only Cook Inlet and Prince William Sound have enough resources to meet the Coast Guard's national standards. Alaskans know all too well how devastating and widespread a spill's impacts can be. And the the amount of harm often depends on how quick the response is.

Where we can't meet the full-on national standards for a boat carrying a cargo of oil or fuel, the Coast Guard can approve alternate plans. But what they'll approve has been a little inconsistent. That doesn't cut it in Western Alaska and the Arctic. These are places where, when minutes matter, the closest response may be hundreds of miles away.

So last year when Congress passed the Don Young Coast Guard Authorization Act, it required USCG to adopt some actual standards. And Congress told the Washington, DC Coasties to consult with locals: the State of Alaska, cities, Tribes, businesses, and companies that keep ships off the rocks (or, Heaven forbid, clean up spills.)

That consultation hasn't started yet. So I introduced Senate Joint Resolution 11. A resolution like this is basically a super-formal letter. I'd try to do something stronger, but the state legislature can't exactly give a federal agency orders.

Along with consultation, SJR 11 asks for the standards to:

1) use 24-7 vessel tracking and monitoring to prevent spills everywhere we possibly can.

2) not double-count resources meant to prevent a spill as also available to clean one up.

3) require experienced Alaska animal rescue in case there is a spill.

4) focus on resources staged here in Alaska instead of stuff that needs to be flown in from Outside as a disaster spreads.

SJR 11 moved out of the Senate Transportation Committee this week with a single hearing. The next step should be the Senate floor.

All my best,

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Events & Happenings Around District B

Juneau Animal Rescue 60^th Gala

PAWS FOR APPLAUSE at Juneau Animal Rescue's 60^th Anniversary Gala! It's Saturday, April 1 at 6pm!

Juneau Little Women

Perseverance Theater has a fresh take on the classic coming of age story! Show runs April 7 to April 23!

Juneau 19^th Annual 12x12 Art

Contemplate art under the theme of “opposites” at the City Museum! The exhibit will be on display until April 15^th!

Juneau Symphony Concert

Dvorak, Elgar, and a guest cellist in the Symphony's "Summit" performance. April 1 at 8pm and again April 2 at 3.

Juneau 2023 Traditional Games

Alaskan high kick, seal hop, and more! The sixth annual Traditional Games are at Thunder Mountain High School April 1 & 2.

Gustavus Earth Day Art Exhibit

The Earth Day art show at the Community Center features over 20 local artists! 5pm on April 7!

Skagway Spring Festival

Four days of cabin fever relief! Join the family friendly festivities April 20-23.

Skagway Art Show

Find out what Skagway artists did this winter at the 11^th annual Spring Show of Winter Work! Artists can drop off pieces Thursday, April 18. Everyone can see the show April 20 - 23 at the AB Hall!

Skagway Late Night Library

Friday nights at 6pm, come to the library for a different activity each week! Crafts, games, and more for ages 10-18!

Skagway Story Time

Remember story time with Ms. Anna! It's perfect for kids up to age 3—a fun romp with songs, books, and more. Each Wednesday at the library, 10:30am.

Haines Trivia Night

Drop by for trivia at the library. Bring a team, or form one there. It's April 13 at 6:30pm. There are prizes, and it's free!

Haines River Talk

Seven speakers seven stories, (seven minutes each,) and all for seven dollars at 7 o’clock. Drop by the Chilkat Center on April 21 for stories and music!

Haines Spring Fling

Enjoy BBQ, music, carnival games, and more on the Fairgrounds! Join the fun on April 29 at 2pm.

Haines Story Time

Stories and songs for children and the young-at-heart! Every Monday and Friday in the library at 11:00 am.

Haines Portable Southeast

Art by Southeast Alaskans, born of the need to connect. This curated traveling art exhibition runs April 7-27.