After five month of challenging work, the House and Senate passed the Operating budget late last night.

This budget is not one that I am celebrating—it’s an austerity budget—but it ensures that we avert a possible government shut down and protects K-12 and pre-K education.

It is important to point out that we restored the Senate Majority’s cuts to Alaska’s Pioneer Homes, public education and the University. We ensured that public safety, our courts and airports, fish and game and other essential government services will continue to operate on July 1st. More budget details are available here.

However, let us be clear: this is not a fiscal plan.

A budget isnt a fiscal plan? Why not?

In State government, the budget is a spending plan, not a fiscal plan. The budget defines what we spend on necessary state services like public safety, transportation, public education and the University. Our constitution doesn’t allow us to pass unfunded budgets, the legislature has to state where the funds will come from if there isn’t have enough projected revenue from oil tax revenue and the federal government to fund it.  

So to ensure the budget could be passed last night, both the House and the Senate approved draws from the Constitutional Budget Reserve (our savings) of about $2.7 billion dollars last night. Yes, the legislature passed a $2.7 billion draw from our savings to fund the budget because both houses of the legislature have not been able to agree upon a comprehensive fiscal plan.
Why didn’t the legislature approve a comprehensive fiscal plan?

Good question!

The House Majority Coalition passed a comprehensive fiscal plan that was balanced, fair and sustainable in April 2017 including:
  • oil and gas tax subsidy reform (HB 111),
  • a Permanent Fund Restructure plan that would protect a $1,250 dividend and fund state services (SB 26), and
  • the Education Funding Act (HB 115) an income-based tax designed to ensure that wealthier Alaskans chip in fairly with working class and poor Alaskans.
Our comprehensive fiscal plan was fair, balanced and sustainable—ensuring essential state services for Alaskans regardless of the price of oil or fluctations of the stock market.

However, the Senate Majority gutted the most important provisions of HB 111 – oil and gas tax subsidy reform and voted down HB 115—Education Funding Act.
The resulting Senate Plan is a Permanent Fund only plan that taxes the poorest Alaskans at a rate of 36 times higher than the top 1% of earners. (See Chart at right.)

Given that our district is on the lower end of the income spectrum, I can’t support a Permanent Fund only plan and neither will the Alaska House Majority Coalition.
The Budget details

The Fiscal Year 2018 Operating Budget is a compromise that totals $4.1 billion in Unrestricted General Fund (UGF) spending and another $5.1 billion in other funds which come primarily from user fees and federal funding for things like Medicaid and water quality testing.

The FY18 budget is an austerity budget that is 3% lower than FY17 and makes cuts to the Depts. of Fish & Game, Health & Social Services, Labor& Workforce Development, Law and Revenue. Other sections with cuts include the Governor’s office, the University of Alaska, the Judicial branch and the Legislature.

The budget sets this year’s Permanent Fund Dividend at $1,100 which will save our state about $700 million dollars but which will hurt poor and rural Alaskans more than urban and well-off Alaskans.

The good news is that the K-12 Base Student Allocation (BSA) will be flat funded at $1.2 billion. This reverses the $69 million cut to education advanced by the Alaska Senate.

The other good news is that the House was able to restore $6 million in cuts to Pioneer Homes that the Senate passed.

What’s next?

The Governor has asked us to revisit HB 111 – oil and gas tax subsidy reform. While the Conference committee continues to work on that, I will be coming home to the district next week to save the state per diem and to reconnect with constituents and my family.

Stay tuned!

PS - There are lots of great things taking place in East Anchorage this Summer. Join me at the following events!

Muldoon Farmers Market

Open for Summer

Saturday, June 24th!

at Begich Middle School

Click the pic for more info!

Save the Date!

Russian Jack Community Picnic

July 22nd, 11am-2pm at

Russian Jack Springs Park

near Nola the Bear.

Check out RJCC’s Facebook page for updates!

Northeast Community Picnic September 16th, 1-4pm
at the New Muldoon Town Square Park
Muldoon Blvd and Glenn Highway interchange updates

For those of you wondering what the heck is going on at Muldoon and the Glenn Highway, the Department of Transportation has a website with all of the updates and photos you could ever want. Check it out!

 Keep in touch!