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KEEPING IN TOUCH
Phone: (907) 465-3892
Toll-Free: (866) 465-3892
Address:
State Capitol, Room
418,
Juneau, AK 99801
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Visit akleg.gov to track bills, watch committees and more!
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Dear Friends and Neighbors,
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Today is day 95 of the legislative session. I must admit I'm frustrated the Legislature wasn't able to come to an agreement in 90 days. In fact, just one year ago, I remember reading the newspaper thinking, "why can't they get their job done on time?!" Trust me, I respect the will of the voters and have done my best to help move things forward in a timely manner. Click here to read an interview with my thoughts on this issue and more.
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That said, I can honestly report that good work is still getting done here. The House has moved all pieces of its comprehensive fiscal plan over the Senate, and negotiations are underway. In the meantime, House Finance is not sitting idly by - we're hearing 4-5 bills a day, as the Senate examines the fiscal package.
The hard truth is, the fiscal issues the Legislature is working through this session are complex. This is not lip-service. The fiscal storm we are facing in our state is unprecedented, and many tough choices are at-hand. Unfortunately, the Legislature no longer has the option to do nothing - that has gone on for far too long.
So, while I will continue to push for resolution to end the legislative session, I also recognize that this year, the Legislature must act - no more kicking the can down the road.
And, if we're going to do something, it has to be done right for our State's economy to stabilize and thrive once again.
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From day one, my position has been clear – Alaska is in serious need of a long-term fiscal plan to address the deficit and stabilize our economy.
The House Majority Coalition of Republicans, Democrats and Independents (such as myself) came together this session with one goal: to put aside party politics and pass a sustainable, comprehensive fiscal plan for Alaska's economic future.
While there have certainly been ups and downs throughout this process, I'm proud to say that despite our differences, the Coalition has come together to accomplish what we set out to do: take action.
Here is an overview of the complete fiscal plan the House has sent over to the Senate for consideration:
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House Bill 57 - Operating Budget
The FY18 operating budget, the leanest in many years, is focused on protecting education and public safety - the two issues my neighbors in District 22 told me were the most important. This year's budget is a decrease of almost $83 million from the FY17 budget for statewide agency and operations.
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Senate Bill 26 - Permanent Fund Restructure
This legislation is part of a comprehensive plan to solve Alaska's current fiscal crisis, while preserving the PFD into the future. This bill would guarantee a $1250 dividend check the next two years. It creates a draw for FY18 and FY19 from the Permanent Fund Earnings Reserve Account (ERA) of 5.25% (and 5% in later years) of the market value of the entire fund, known as a POMV draw. This amount is calculated to keep the Permanent Fund growing over time, and provide a PFD check above $1250 for years to come. One third of this draw will go directly to the dividend fund to pay our PFDs, equal to $860 million. The remaining two thirds ($1.7 billion) will go to the state’s general fund to support essential state operations.
SB 26 also reduces the amount we draw from the ERA in years when oil prices are high to save more for future dividend payments. This will constrain the growth of government in good years, and make sure that we have enough money in lean years to keep funding vital services like schools, roads, and public safety.
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House Bill 111 - Oil & Gas Tax Reform
I ultimately could not support this bill on the floor and voted AGAINST my Majority caucus colleagues. I felt the bill was too much of an overhaul of our entire tax system for me to support it in its current form.
One specific element of concern for me in HB 111 is the imposition of a flat 25% profits tax at low oil prices. With the repeal of the per barrel credit, this represents a tax increase at a time when the oil companies are struggling. I do not believe this is the way to increase investment and future production.
That said, the bill
does contain a number of positive elements that I hope become enacted into law this session: most importantly, it removes the payment of cash credits to oil companies, and instead allows them to carry their losses forward in order to deduct them against future profits. I think this is fair—we cannot be paying out cash to oil companies while we are asking Alaskans to pay taxes and accept cuts to government programs.
I expect that the Senate will strip out the elements of this bill that represent a tax hike on the oil companies, and come back to the House with a simplified version that solves what we can all agree is an urgent problem with our oil tax credit structure.
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House Bill 115 - Education/Income Tax
My vote to implement an income tax was undoubtedly the hardest I've made, but I did it knowing we need to fill the fiscal gap in a long-term, sustainable way.
HB 115 establishes a small income tax in the state. The tax exempts roughly the first $15,000 of income from each Alaskan. It also exempts an additional $4,000 per dependent and allows you to exempt each dependent’s PFD. So, a family of four would not have taxes owed on their first $42,100 of income.
The average Alaskan will pay roughly 2% of their income under this tax. I believe that this solution is the smartest way to close our fiscal gap—it reduces the impact on the most vulnerable in our society, and helps reduce our reliance on the oil industry. Under this tax, Alaskans will still have the lowest overall tax rate (combining sales and income tax) among the 50 states, and we'll also capture revenue from out-of-state workers (about 20% of our workforce).
I heard from many of you in the district regarding this issue. Thank you for reaching out and expressing your concern or support for this legislation. I take all opinions and perspectives seriously. While not always popular, the goal of these difficult votes is to put a stable plan in place that secures the high quality of life we Alaskans want to enjoy for years to come.
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In the coming weeks, I will continue to work towards a comprehensive, sustainable and fair fiscal plan for Alaska. Is this easy to do? No, it is not, but leadership isn’t about what is easy. It is about doing what is right for the people of Alaska—not just for one group of Alaskans or for just a few years—it is about doing the fairest thing for all current and future generations of Alaskans.
The House’s fiscal plan ensures that Alaska can have a strong and stable future which attracts business investment and continues to be a place where people want to live, work and raise a family. We are all in this together, and I understand the sacrifice that is being asked of every Alaskan. Thank you for the trust you have placed in me to make these tough decisions - please continue to stay in touch.
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I ran for office for two reasons:
1) Our state's economic future has been in serious jeopardy, and action to close the budget deficit was sorely needed.
2) I wanted to ensure that the people in our district had a representative who was accessible and they would hear back from.
Communication is key, and I will always do my best to be available and responsive. Whether via email, phone, Facebook message or face-to-face meetings, I believe our conversations are the foundation of the democratic process and essential to representing our district. Even if we don't always agree on every issue, I welcome these conversations and look forward to hearing and learning from you.
So, let's keep talking. As always, feel free to contact me at (907) 465-3892 or [email protected].
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Representative Jason Grenn
House District 22
Sand Lake, Jewel Lake, West Dimond & Kincaid
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Office of Representative Jason Grenn
State Capitol, Room 418
Juneau, AK 99801
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