Daily Sitka Sentinel

Budget Is Stalled, Say Sitka Legislators

By SHANNON HAUGLAND
Sentinel Staff Writer
    The Legislature this year may have logged more days in regular and special sessions than at any time since statehood, and yet some pressing items of business – like the budget deficit – are still unresolved.
    In interviews with the Sentinel Sitka’s Rep. Jonathan Kreiss-Tomkins described the fourth special session as a “frustrating” one; Sitka’s Sen. Bert Stedman said the Senate is setting itself up for a busy winter of trying to dig out of the $2.7 billion shortfall expected for fiscal year 2019.
    The Senate wrapped up work Friday without acting on any revenue measures to help solve the budget gap. But a few members of the House, including Kreiss-Tomkins, are keeping the House in session, holding “technical sessions,” with a skeleton crew until the special session ends Nov. 21.
    “It’s immensely frustrating,” said Kreiss-Tomkins, a Democrat and a member of the majority coalition in the House. “We’ll reconvene in January and see if people have a different appetite for things – one can only hope.”
    Both Kreiss-Tomkins and Stedman said that the crime bill, SB54, passed in the current special session, still needs work. The legislation was introduced to correct problems with the criminal justice reform bill SB91, which passed last year.
    After SB54 passed the House, the Department of Law pointed out possible constitutional problems with it, related to due process. Even so, the Senate went ahead and passed the House version without changes.
    “We’ve tightened up 91 and moved it in the right direction,” Stedman said. “There’s still more work that needs to be done. There’s treatment programs that need to be set up and a limited amount of money. My concern is we’re not going to get any of it in rural Alaska. We’ll release people and we don’t have support services in rural Alaska and we’ll put the general public at risk.”
    Gov. Walker has said he will sign SB54, though he agrees it still needs work. In his weekly newsletter he said it gives “meaningful tools to judges and law enforcement to keep Alaskans safe, although it contains some issues the Legislature will need to address in the near future.”
    “When we passed it, it was not yet known what those problems were,” Kreiss-Tomkins said. “Everyone was hoping the Senate would vote to take it to conference committee and fix those things. ... It’s never a good idea to pass a bill you know is unconstitutional. You waste a lot of resources.”
    Both Kreiss-Tomkins and Stedman said the bigger issue left on the table is how to close the $2.7 billion to $2.8 billion operating budget gap.
    “We’ve spent our savings from $16 billion to $2 billion,” Kreiss-Tomkins said. “It’s probably time to address things.”
    Gov. Walker introduced a package to balance the budget that called for restructuring the Permanent Fund, “continued downward pressure on the operating budget” and implementing a wage tax.
    “This package gets to a balanced budget,” Kreiss-Tomkins said.
    “The deficit needs to be addressed,” Stedman said. “There’s not enough left in the constitutional budget reserve to do a budget.”
    He estimated that fund at $2.3 billion to $2.4 billion. “We either go to the Permanent Fund to help with the budget or start shutting down major sections of state services.”
    Like his fellow Republicans in the Senate majority, he does not favor new taxes as part of the solution, at this time.
    He said the state should have responded to the downturn in the economy the way Wrangell, Ketchikan and Sitka when the mills shut down. Those plans did not call for “spending through the liquid funds,” Stedman said.
    Commenting on the Senate’s decision to adjourn, Stedman said, “We need the Legislature to have a break and cool off, and come back in January. Enough is enough.”
    Looking ahead to “a long winter,” Stedman said he expects to see lively debate on a plan to restructure the Permanent Fund to a percent of market value approach, protecting the corpus of the fund through a constitutional amendment and maximizing the amount that can be spent from the fund in any given year while still providing an annual dividend to Alaskans.
    “If it’s not constitutionally protected the Legislature will ... spend it down,” he said. Under the plan he favors, the amount taken out every year – 4.5 percent or so of the market value – would be split between the operating budget and Permanent Fund Dividend.
    Stedman spoke to the Sentinel from Houston, where he was meeting with consultants over Alaska’s oil and gas tax structure. Stedman is chairman of the Legislative Budget and Audit Committee, which is the committee that contracts with consultants for both House and Senate.
    Kreiss-Tomkins said he will be in Petersburg Thursday, when the governor plans sign a bill that gives Petersburg a land allotment from the state. Stedman sponsored the bill on the Senate side; Kreiss-Tomkins sponsored the companion bill on the House side.