JUNEAU – Legislators are settling in for a potentially lengthy overtime battle, but a week after the voter-approved regular session ended, none of the biggest solutions taking aim at the state government financial crisis have passed.
Capital and operating budgets have not been finalized, meaning the level of spending reductions and what exact programs and services will be cut remains uncertain.
Plans to use Permanent Fund earnings to pay for government, proposed tax hikes, and attempts to overhaul the state's oil tax credit system have not gotten a floor vote in either chamber.
But lawmakers, meantime, have passed a variety of legislation: establishing Alaska Wild Salmon Day, making sure courts can consider the well-being of pets during divorce proceedings, and changing gaming rules so Dave and Buster's can open in Anchorage.
Drugs described as life-saving have also been legalized, and an omnibus Medicaid reform bill also passed.
Here’s a rundown of exactly what has -- and has not -- been accomplished so far:
ACCOMPLISHMENTS
Established August 10 as Alaska Wild Salmon Day. H.B. 128 was sponsored by Rep. Bryce Edgmon, D-Dillingham, and unanimously passed the House and Senate. According to a sponsor statement, the change will “provide opportunities to promote our wild salmon’s deliciousness, purity, and healthfulness to visitors.” The Alaska Seafood Marketing Institute, Alaska Trollers Association, and United Fishermen of Alaska wrote letters supporting the bill.
Updated the state Uniform Code of Military Justice for the first time in decades. H.B. 126 unanimously cleared both chambers and was sponsored by the House Judiciary Committee, chaired by Rep. Gabrielle LeDoux, R-Anchorage. “The reason for this bill is to allow the Alaska National Guard to handle bad actions and bad actors, to give them swift discipline,” LeDoux said. Alaska’s code has rarely changed since it was established in 1955, and this policy change comes on the heels of reports that began surfacing in 2014 that the Guard had “systemic command climate issues” in handling allegations of sexual assault, fraud and other serious crimes.
Passed non-binding resolutions calling for a federal Constitutional Convention due to “government overreach.” “Recent actions taken by the White House and Department of Interior constitute a new threshold of overreach in Alaska unlike anything in recent history,” wrote Rep. Shelley Hughes, R-Palmer, who sponsors H.C.R. 4 and H.J.R. 14. The joint resolution calls for Congress to hold a single-issue countermand convention, while the concurrent resolution enables the state Legislature to institute tight parameters to ensure a “runaway convention” is not possible. In order for the effort to succeed, dozens of other states have to pass similar resolutions.
Approved a contract to sell royalty oil to the refining company, Tesoro. Gov. Bill Walker requested legislators consider H.B. 373, a bill that passed both chambers unanimously and has since been signed into law. The five-year deal allows the company to purchase up to 25,000 barrels of oil daily and is expected to add $25.4 million into Nikiski’s economy annually. The Department of Natural Resources expects an additional $9 million to $11 million in revenue with the new approach, which is known as a royalty volumes in-kind contract, meaning the state is directly selling the resource.
RELATED: Governor signs bill allowing Tesoro to purchase up to 25,000 barrels of oil per day
Passed a “pet divorce bill” that allows courts to award ownership of animals in divorce and dissolution proceedings and to consider their well-being. H.B. 147, co-sponsored by Anchorage GOP Rep. Liz Vazquez and the late Anchorage Democratic Rep. Max Gruenberg, drew national attention as the so-called “pet divorce bill.” The legislation was Gruenberg’s final bill to pass the Legislature, with unanimous votes from each chamber, and also makes it so people can be held responsible for the costs of caring for their pets if the animal is seized due to animal cruelty and neglect.
Re-named a shooting range in the Knik River Public Use Area as the Kenny and Patti Barber Shooting Range. The Senate State Affairs Committee, led by Sen. Bill Stoltze, R-Chugiak, sponsored S.B. 204 to name the range on behalf of the Barbers. The Butte Community Council wrote in favor of the change because “their work with state policymakers has led to the creation of the KRUPA and the subsequent trail development as well as a secure shooting range,” wrote council president, Darryl Dreher.
Legalized the sale of an opioid overdose antidote drug, and required insurance companies to cover intravenous and orally administered cancer treatments. The change requiring expanded coverage of cancer treatments came in S.B. 142, sponsored by Sen. Cathy Giessel, R-Anchorage: “Patients should not be prohibited from receiving oral cancer treatment due to preferential insurance coverage favoring intravenous forms of treatment,” she wrote in a sponsor statement. Lawmakers unanimously approved the legislation.
S.B. 23, sponsored by Sen. Johnny Ellis, D-Anchorage, became the first bill from a minority senator to pass the Legislature. It approves the sale of naloxone, which counteracts the effects of a heroin overdose and comes as the state is grappling with increased usage of the drug and other opioids.
RELATED: Bill approving drug that counteracts heroin overdoses unanimously passes House
Passed a bill reducing state spending on the health subsidy, Medicaid. Sen. Pete Kelly, R-Fairbanks, describes S.B. 74 – which passed the House 33-6 and the Senate 19-0 – as starting “the process of cost containment and reform needed to slow the growth of the Alaska Medicaid program.” The bill was praised by the governor and makes several changes: expansion of telemedicine, more use of primary case management and health homes for people with chronic health conditions and behavioral health needs, reform of the behavioral health system, increased public-private partnerships to reduce non-urgent use of emergency room services, and enhancement of fraud detection. Republican lawmakers, who are suing the governor over his unilateral expansion of access to Medicaid, have long said reform is needed first before expansion. The end result is projected to save $365 million in six years, an average of $60.8 million annually – that’s less than 10 percent of unrestricted general fund spending on Medicaid during the current fiscal year.
Required school districts to provide kindergarten through eighth grade students a minimum of 54 minutes of daily physical activity. S.B. 200, sponsored by Sen. Mia Costello, an Anchorage Republican, requires districts to provide 90 percent of the recommended exercise time for adolescents by the Centers for Disease Control and Prevention. “Ensuring adequate physical activity will allow Alaska’s students the opportunity to learn from each other, to improve their academic performance, to fight childhood obesity through exercise, and to reduce the stress levels that have adverse effects on our children,” she wrote in a sponsor statement. The bill had support from the Alaska National Education Association and passed the House 35-4 and the Senate 18-2.
Changed state gaming laws to allow Dave and Buster's to expand to Anchorage. S.B. 157 was introduced by Sen. Lesil McGuire, R-Anchorage, in February and quickly made it through the House and Senate without opposition. She described the need for the bill in a sponsor statement: “Elsewhere in the United States, popular restaurant businesses feature arcade areas where patrons play games of skill to win tickets which can then be redeemed for toys and other novelties. Unfortunately, Alaska’s outdated laws are so vague that the legality of these operations is far from clear. S.B. 157 would clarify that playing these arcade-style amusement games of skill, winning tickets and redeeming them for small, non-cash prizes does not constitute gambling under Alaska law,” McGuire wrote.
NOT ACCOMPLISHED
Oil and gas tax credit reform. The Revenue Department projects the state will pay out $775 million in subsidies to oil and gas companies during the upcoming fiscal year, while taking in $1 billion in petroleum revenue. The state offers a variety of credits, some designed to attract new development by relatively small companies in Cook Inlet and on the North Slope, and others allowing companies of any size to write off operating losses. The governor in H.B. 247 proposes dramatically reducing credits effective immediately, saving $400 million, and also increasing production taxes from 4 percent to 5 percent, raising $100 million in additional revenue next year. The proposal has languished in the House, where the Republican majority caucus is divided over what to do, and the opinion of the Democratic minority – which favors a plan similar to Walker’s – carries weight because of upcoming votes to draw from state savings accounts to cover the budget deficit.
Capital budget. The state construction budget for the upcoming fiscal year, which starts on July 1, is contained in S.B. 138. The proposal is expected to be shoestring compared to years past when state government was flush with cash from high oil prices, with almost all spending going to activate matching federal funds. One lingering question is whether or not $7 million will be approved to complete construction of a school in Kivalina.
RELATED: In Juneau, battle brews over construction funding for village school
Operating budget. While the House and Senate have each passed H.B. 256, a bill that approves the fiscal year 2017 spending plan, lawmakers have not sorted out the differences between the two conflicting proposals. A conference committee has been working through the differences over the past couple weeks, but even when their review is done, funding for various programs and services on the chopping block could still end up getting funding through the capital budget. That leaves uncertainty for state agencies grappling with the reductions, maybe most of all the University of Alaska, which would see a $50 million reduction under the latest plan.
Tax proposals. The governor's overall fiscal plan calls for increasing taxes on the fishing, mining, and tourism industries, as well as increased alcohol and cigarette taxes. He also calls for increasing the oil production tax, reforming the oil and gas tax credit system, and implementing a personal income tax. While many of the proposals have received significant discussion during legislative committee hearings, none has yet passed either chamber.
Plans to use Permanent Fund earnings to pay for government. The most significant piece of the governor's proposed fix to the state government financial crisis is a transformation of how government is financed: drawing most money used to pay for government from the Permanent Fund's earnings reserve instead of continuing to rely on volatile natural resource royalties. While the governor initially called for a fixed $3.3 billion draw from the reserve, he has voiced support for Anchorage Republican Sen. Lesil McGuire's S.B. 128, which instead calls for a yearly draw equal to 5.25 percent of the earning reserve's value.
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