Protecting Your Rights: Serving Sand Lake, Spenard and Turnagain

February 5, 2019

In this issue:

• Governor Proposes Supplemental Budget & Constitutional Amendments

• Economic Forecast Shows Potential End to Recession in 2019

• Community Events

Dear Friends and Neighbors,

Last week, Governor Dunleavy introduced two supplemental budget bills and three constitutional amendments. While the Governor won't deliver the budget to the legislature until February 13, his recent proposals reflect his priorities.

Governor Proposes Supplemental Budget & Constitutional Amendments

FY2019 Supplemental Budget Bills

Last Tuesday, Governor Dunleavy's Office of Management and Budget Director, Donna Arduin and Budget Director, Lacey Sanders, presented a walk through of the fiscal year 2019 supplemental budget bills. To view a summary of the supplemental requests, click here. Typically, supplemental budgets are used to address emergency expenses or costs not otherwise covered by the budgets passed during the prior session. In contrast, the Governor’s supplemental budget includes a number of increases and reductions. Specifically, the bill eliminates $20 million in one-time education funding that the Legislature approved last year.

The first supplemental budget request, Senate Bill 38, includes $37.3 million in state spending for firefighting and earthquake response and $102 million leveraged from the federal government. The second bill, Senate Bill 39, includes supplemental spending increases, reductions, and transfers to the state operating and capital budget. The bill also includes reductions: elimination of $20 million in one-time education funding for K-12 schools; repeal of state aid to school districts; a $3 million cut to the Village Public Safety Officer Program (VPSO); a $2 million cut to assist with school construction bond debt reimbursement; and a $1.2 million cut to broadband grants.

The Governor’s budget office states that the goal of SB 39 is to reduce state spending to limit the need to take from the state’s savings accounts. They asked agencies where money might be available to help offset the costs of supplemental spending. The proposed supplemental spending increases, reductions, and transfers to the state operating and capital budget result in the return of $5.8 million to the General Fund.

Last week, Governor Dunleavy pledged to make public safety a priority. But the proposal to cut VPSO funding by 21 percent reduces public safety resources in rural Alaska. While I support increased funding to retain and recruit State Troopers, cutting the VSPO program, which also has retention problems, to pay for troopers appears short-sighted and may harm rural Alaska.

Additionally, taking funds from school districts in the middle of the school year undermines our investment in education. Each year, school districts across the state build their budgets based on revenue and enrollment projections. This year, those projections included the $20 million that was appropriated and approved last June. The Anchorage School District has already included these funds in their annual plan. ASD used half of its $5.77 million to hire 25 teachers (positions that had been cut from a previous budget), and used the other half to pay a portion of the costs needed to settle teacher contracts. Asking ASD to reverse those decisions halfway through the second semester would have broad, negative impacts on the entire school district. Many lawmakers agree that education funding cannot withstand further cuts without negatively effecting Alaskan children. I continue to believe that educating our young people is our best investment in Alaska’s future and I will remain committed to strengthening our public school system and supporting our hard-working teachers.

Constitutional Amendments

On Wednesday, Governor Dunleavy introduced three constitutional amendments:

Senate Joint Resolution 4 – Proposes that any new taxes or tax increases must be approved by both the legislature and the public.
Senate Joint Resolution 5 – Proposes locking the statutory dividend amount into the constitution. The funds would be automatically transferred without the consent of the legislature and the Governor would lose the ability to reduce the amount.
Senate Joint Resolution 6 – Proposes a cap on how much the legislature can increase spending each year. Any increase would be limited to half of the combined change in inflation and the state population, or 2 percent — whichever is less.

On Wednesday afternoon, I sat down with members of the media to discuss my first impressions of the Governor’s proposals. To hear my interview with KTOO, click here.

While I welcome the opportunity to discuss and debate these policy issues, these proposals present a number of concerns for all Alaskans. First, they create an imbalance of power. Alaska’s constitution created a strong executive, and giving more power to the governor further limits the legislature's ability to act as a check and balance. I also have concerns about replacing the Constitutional Budget Reserve (CBR) with a new Savings Reserve. This proposal would eliminate our obligation to repay earlier withdrawals from the CBR. And, by replacing the three-quarter vote needed to access savings with a simple majority vote, it would limit useful and necessary budget discussions and weaken the influence of the minority.

Economic Forecast Shows Potential End to Recession in 2019

At the beginning of the year, Alaska economists Neal Fried, Scott Goldsmith, and Mouhcine Guettabi presented their economic forecasts for 2019 at a panel discussion, available for viewing here. Last week, the Anchorage Daily News reported on a general belief among Alaska economists that Alaska’s recession is likely to end in 2019.

(Source: Alaska's Economic Forecast 2019 Presentation, January 9th, 2019 presented by Neal Fried)

Since 2015, Alaska has lost approximately 12,000 jobs—a result of low oil prices and state budget deficits. In his presentation, Alaska Labor Department Economist Neal Fried forecast that Alaskan employers will add approximately 1,400 jobs to the workforce in 2019—about a 0.4% growth in the job market.

Economists are basing their 2019 projections on relatively stabilized oil prices in the $60 to $70 per barrel range, a suite of new North Slope oil prospects and stabilized state government spending. UAA Institute of Social and Economic Research professor Mouhcine Guettabi noted that the improved economic outlook is predicated on state government not resolving the state’s current $1.6 billion budget deficit with spending cuts alone: “If that ($1.6 billion) were to get removed from the economy, obviously all of this gets tossed aside." In his presentation, Guettabi reported that the state government spending cuts are the most economically damaging way lawmakers can close the state’s budget gap. Depending on how cuts are implemented, reducing the deficit through a $100 million reduction in the state workforce results in somewhere between 1,414 and 1,677 jobs lost. And $100 million in broad-based state cuts results in about 980 and 1,260 job losses.

(Source: Alaska's Economic Outlook Presentation, January 9th, 2019 presented by Mouhcine Guettabi)

Community Events

Mark your calendars for these upcoming events:

Community Councils

Spenard Community Council
When: Wednesday, February 6 at 7:00 PM
Where: Spenard Recreation Center

Turnagain Community Council
When: Thursday, February 7 at 7:00 PM
Where: West/Romig Career Technology Center, Room 152
Facebook event page

Sand Lake Community Council
When: Monday, February 11 at 6:30 PM
Where: Sand Lake Elementary School, Library Room
Facebook event page

2019 Anchorage City-Wide Career & Job Fair

The 2019 Anchorage City-Wide Career & Job Fair is happening Friday, February 8, 2019 at the University Center! This fair is free and open to the public.

Doors open at 10:00 AM and job seekers should come professionally dressed with copies of your resume to give to employers.

Businesses:

If you are seeking employees and would like to meet potential employees face to face, please register for a booth. Space is limited: https://ancjobfair.wixsite.com/2019/businesses.

Job Seekers:

If you are seeking employment and looking for details, register online. It's free! https://ancjobfair.wixsite.com/2019.

For more information and to RSVP, visit the Facebook event page.

As always, please let us know if you have any questions or concerns.

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