May 2023

 

Hello from Juneau,


The legislative session has ended after a one-day special session resulted in a compromise between Senate and House members. The Senate passed a balanced budget based on the spring revenue forecast and lower revenue projections of $73 per barrel of oil in FY24. Our budget includes funding for vital state services like public safety, education, and health care; capital projects including airports and AMHS ferries and docks; provided for a $1300 PFD; and did not dip into savings.   The budget also includes an additional Energy Relief Check up to $500 for those who qualify for a PFD if oil prices increase to a range between $83-105 this year and provides a pathway to repay the state’s savings account. Through negotiations with the House, we were able to come to a compromise and provide a reasonable and responsible budget that does not draw from savings and leaves the state with an $84 million surplus. The budget is now headed to the Governor where he can reduce or veto any line items.  


FY 2024 Operating Budget

 

In addition to providing funding for public safety, health, food security, school bond debt reimbursement, University and AVTEC, AK Performance Scholarships, and Fish & Game, here are some other items in the budget:


  • $175 million additional funding for K-12 Education, the largest increase in history. Education continues to be a priority for the Senate and we will continue to advocate for a permanent BSA increase through SB 52 when session begins next year.
  • $7.5 million added for Child Care Block Grants to increase childcare wages and provide more childcare services.
  • $5 million added to Head Start Grants.
  • $7.5 million added along with matching federal funds to Home & Community-Based Waiver Services.
  • $50,000 for Dementia Awareness & Resource Material Distribution.
  • $1 million added for Rural Public Radio Grants.
  • $5 million added for ANSEP (Alaska Science and Engineering Program).
  • Did not include the additional funding the Governor requested to take over the Clean Water Act 404 permitting program currently performed by the EPA.


FY 2024 Capital Budget


Due to a low spring revenue forecast, the Senate passed a capital budget that maximizes federal dollars while preventing overspending. The Senate Finance Committee took into consideration five goals: 1) Balance the budget, 2) maximize federal funds, 3) establish food security and resource preservation, 4) strengthen state-wide energy programs, and 5) address our deferred maintenance needs. In addition to statewide items such as renewable energy, village safe water, fisheries management, housing programs, and school major maintenance, some additional projects were added during the one-day special session and our compromise with the House. Here are some highlights for our District C:


  • $500,000 for Emergency Medical Services Match for Code Blue Projects which is vital to our rural emergency medical service programs. 
  • $30 million for the Community Revenue Sharing program that provides funding for local projects.
  • $703,125 Homer Airport Master Plan Update.
  • $6.3 million Cordova Ferry Terminal Modification.
  • $2.18 million Chenega Airport Lighting Improvements.
  • $4.25 million Seward Snow Removal Equipment Building & Sand Storage Building.
  • $6 million Kodiak – Otmeloi Way Reconstruction.
  • $9 million Cordova – Whitshed Road & Pedestrian Improvements.
  • $150,000 Ninilchik Senior Center Kitchen Expansion.
  • Several Sterling Hwy and Seward Hwy projects.

 

AMHS Update

 

Alaska Marine Highway System (AMHS) received $285.6 million in federal grants. Of this, $40 million is for operations, $68.4 million goes toward replacement of the M/V Tustumena, and $163.7 million will be used for funding an electric ferry, upgrading Cordova’s dock, replacing docks in Tatitlek and Chenega, and modernizing our existing vessels. Department of Transportation and Public Facilities (DOTPF) continues to actively recruit and hire new staff which would allow them to bring the M/V Kennicott and M/V Tazlina back online to support our usual summer schedule.

 

Legislation Update

 

Senate Bill 52 passed the Senate with a BSA increase of $680 in FY24. $8 million was also added to pupil transportation across the state, and additional funding added for districts operating residential schools. NOTE: several parts of SB 52 (BSA and pupil transportation increases) were recently included into SB 140 Internet for Schools during a House Finance committee amendment process. SB 52 is in House Finance and SB 140 is headed to House Rules next year. The Senate Majority and I continue to advocate for a permanent increase to the BSA.

 

Senate Bill 88: Retirement Systems & Defined Benefit Option

I cosponsored SB 88, which creates a new defined benefit system for public employees and teachers and provides an option for current Tier IV employees to convert their defined compensation plan to the new retirement system.  While I am disappointed we couldn’t pass the bill over to the House this year, I am glad the bill is getting informative hearings on actuarial reports to ensure the legislature has accurate information to move this bill forward. These hearings will continue in Senate Finance when we resume next year.

 

Senate Bill 107: POMV/PFD Split 75/25

As part of a long-term sustainable plan to stabilize the state’s revenue, SB 107 would change how the state uses the annual Percent of Market Value (POMV) draw from the Permanent Fund. SB 107 passed the Senate with a 75/25 split:  75% of the POMV draw going to the general fund to support state services and 25% going to PFDs, starting in FY25. Additionally, the spilt would have changed to 50/50 if there was $1.3 billion of new revenue and the CBR savings has at least a $3.5 billion balance by Jan 1, 2031. The House Ways & Means committee changed the split to 50/50. The bill now awaits hearings in the House Finance committee next year.

 

Senate Bill 114: Oil & Gas Production Tax / Corp Income Tax

Another part of the Senates sustainable revenue plan is changes to the oil tax credits from $8 to $5 per barrel and credits would be capped at the amount of capital expenditures. The Senate Finance committee removed the portion of the bill that eliminated the current S corporation tax loophole and added it to SB 122 Corporate Income Tax bill. This S Corp fix would require private companies making more than $4 million per year to pay the same 9.4% income tax rate as public corporations. The bill also addresses digital (internet) businesses. Both of these bills will receive hearings in Senate Finance next year.


Senate Bill 89: E-Cig/Tobacco

My bill to help address the increased vaping trend with Alaska students passed the Senate and now awaits hearings in the House next year. This bill would increase the minimum age to buy, sell, and possess tobacco and E-cigarettes from 19 to 21 years old, and places a point-of-sale (retail sales) tax on electronic smoking products (ESPs). Updating Alaska statutes to mirror the federal minimum age of sale and possession of these products will allow our state enforcement program to become more effective and our state will be eligible for federal grant funding to support smoking cessation and health education programs.

 

Senate Bill 29: Civics Education

My bill to add civics curriculum and assessment into public school statutes passed the Senate and was referred to House Education and House Finance for hearings next year. 


Senate Bill 128: Area M Salmon Fishery Closure

I do not support this bill to temporarily close the Area M commercial salmon fishery in the Alaska Peninsula, Aleutian Island and Atka-Amlia Island Areas. Thank you to those that called and emailed for public testimony. This bill remains in Senate Judiciary.

 

For Updates on Legislation & Budgets

 

Senate District C’s Legislative Information Offices (LIOs)

 

Gavel Alaska:  360north.org

Live TV - AKleg: akleg.gov/LiveNow. 

Bills & Laws: akleg.gov/basis/Home/BillsandLaws

Bill Tracking at akleg.gov/basis/btmf

Legislative Finance: legfin.akleg.gov. 

 

Please keep in touch!

 

I appreciate hearing from you about legislation, budgets and other state issues. Note that the Governor has mentioned he may call us in for a Special Session in October to address fiscal plan legislation. If we do go back, I’ll provide further Capitol Reports to keep you updated! For now, I hope you all enjoy a fun and safe summer!

 

Phone: 907-465-4925

Toll Free: 1-800-821-4925  

Email:  Sen.Gary.Stevens@akleg.gov

  

Thank you to our local media for allowing me the opportunity to share this information.