Thank you for reading my latest e-News! Please take a moment to read my end-of-session update on the state budget, District capital projects, unresolved problems with our oil tax system, legislation I passed, and constituent ideas I was able to turn into law.
The State Budget
This year's budget puts roughly $1.5 billion into savings, provides nearly $200 million for School Debt Bond Reimbursement - which means property tax relief, invests hundreds of millions in federal funds all across Alaska to improve our infrastructure, fixes many of our deferred maintenance needs and increases education funding by over $60 million.
I was selected to serve on the conference committee for the budget negotiations between the House and Senate.
This year Alaskans will receive a Dividend payment of about $3,200, barring a veto by the Governor. That amount represents the largest PFD in history and equals a PFD of $2,500 to $2,600 plus about a $650 energy rebate.
Part of the deal that came out of the conference committee was restoring forward funding of education. That is important for school districts that can now set a budget and staff up to the appropriate level ahead of time instead of having to hire last minute or fire at the last minute based on moving budgets.
East Anchorage Projects Included in the Budget
Several different capital projects to improve our roads and parks in East Anchorage made it through the legislature this year. It was a team effort working with our local community councils and East Anchorage Representatives to identify the priorities that need funding in our neighborhoods.
While these items are just a small fraction of the overall budget, they will go a long way to improving our community. It is now up to the governor whether to sign or veto these important community projects.
$500,000 for Phase 2 construction at Chantshnu Muldoon Park. Turning the old Alaska Greenhouse property into Anchorage’s newest destination park has been a goal for East Anchorage residents for two decades and a big priority of mine. We have faced a lot of opposition from politicians and developers who would have preferred to see more strip malls along Muldoon Road, but all our hard work paid off and the first phase of construction along Muldoon Road was completed last year. The second phase will focus on developing the eastern portions of the park.
$500,000 for traffic calming in Northeast Anchorage. The Northeast Community Council has made traffic calming a top priority, because of the high number of pedestrians and bikers on the narrow neighborhood roads in the Northeast area. I am glad we were able to secure funding to help make these neighborhoods safer.
$500,000 for school pedestrian and safety improvements in the Russian Jack area. The Russian Jack Community Council identified several areas where safety needs to be improved on students’ walking routes to schools, and this grant will help fund these improvements.
$150,000 for community gardens at Russian Jack Springs Park. Community gardens have been a great success in Anchorage and there is a need for more in the East Anchorage area.
$10,000 each for Nunaka Valley and Northeast Community Patrols. These volunteer community patrols have been one of the most cost-effective investments in making our neighborhoods safer.
$6 million for making the Muldoon/ Tudor curve safer. Representative Liz Snyder deserves the credit for this as she pushed to include this funding for improving one of the most dangerous pieces of road in the state.
$1.3 million for upgrades to Muldoon Library upgrades. Thanks again to Rep. Snyder for pushing for these upgrades, which would be paid for by federal funds dedicated to improving access to the internet for job seekers.
Infrastructure Spending & Jobs
Alaska will experience a huge construction boom these next few years. We will see thousands of new jobs created from the construction of capital projects all around the state. Because of federal relief and infrastructure money from President Joe Biden and Congress, under the Infrastructure Investment & Jobs Act (IIJA), the State of Alaska has been able to fund projects that have been on the back burner for many years. The legislature funded $900 million in projects from IIJA funds coming to Alaska over the next year.
If you or a friend or family member is looking for a good-paying job that helps our state, I highly encourage you to get involved in the construction industry and apply for an apprenticeship. There are many good labor jobs that will be coming available and Alaska does not currently have the workforce to meet all the demands of this work. We want Alaskans to take these jobs instead of importing workers from Outside who have no intention of staying long term.
Failed Oil Tax Scheme Gone Unfixed
Lost Revenue from Deductible Oil Tax Credits
While there were many successes this session, there were certainly some disappointments. One of the items that has been a continued source of frustration for me is our failed oil tax system, SB 21 enacted in 2013, which has cost us many, many billions in unnecessary revenue losses due to oil tax credits that we let the oil companies take as direct tax reductions without getting anything in return. At that time, the industry promised the legislature that we would see more investment, more production, more jobs, and substantial growth in our Permanent Fund due to these benefits. None of those promises have been kept.
Instead, we have seen capital investment in our oil fields plummet since we adopted the current oil tax scheme. Capital investment in Prudhoe Bay, for example, our largest region of yet untapped potential has dropped from $877 million a year in 2014 to only $86 million in 2021. And for that $86 million capital investment, the State allowed $720 million in tax credits. In fact, since the passage of SB 21, the oil companies have received $6.1 billion in deductible tax credits. And these tax credits are projected to lose the state another $11.0 billion in just the next nine years.
On the jobs front, in 2014 Alaska saw a high of 14,600 oil and gas industry workers. Despite repeated promises that these massive tax cuts would "Save Jobs", the number has only dropped since then, until last year when we saw a jobs number of just 6,700.
Last year I introduced Senate Bill 107 to fix these problems. It finally received one hearing in the last few days of the session but experienced no other movement or support from the majority in the Senate. I also tried to reduce these deductible credits through an amendment to a bill that was voted on during a floor session of the entire Senate. A small, modest adjustment in these credits could help fully fund the PFD and other projects that we need and help balance our budget into the future.
Lack of Transparency in Tax Reporting by the Industry
Another problem with our tax laws that SB 107 would have fixed is the lack of transparency from the oil industry in their profits and tax payments. With all our tax credits, deductions, and hidden giveaways, we have the most complex oil tax system globally and we need better transparency in order to set tax policy that is in the state’s best interest.
Our own independent legislative consultants on oil policy have said that Alaska is “the most opaque place the oil industry operates in the world” and have encouraged us to legislate requiring disclosure of basic financial information. The industry is not required to release information on profits, operational costs, tax payments, credits, or deductions, or other essential information that is key to making informed policy decisions in Juneau. This is the same information that these oil companies provide to other countries all over the world.
From the limited data we have access to that we can analyze and draw inferences from, Alaska is the most profitable place in the world for an oil company to do business by far. These are our resources and we should want to know how our oil taxes work for the industry so we can make informed decisions on future policy and stop enabling the oil industry to use Alaska for low risk, high reward outcomes compared to other sovereign oil jurisdictions.
In order to make our government more transparent and accountable, I introduced Senate Bill 25 to require the state to publish an easily searchable database of financial transactions for the state. I am proud that this bill unanimously passed the Legislature. SB 25 now goes to the governor for his signature.
Alaska currently is the least transparent state in the nation regarding government finances. SB 25 puts in the requirement for a user-friendly Online Checkbook into law. When the new site goes live it will give Alaskans a one-stop-shop where they can research how public funds are being spent.
SJR 12 – Defending Social Security Benefits
The legislature unanimously passed my resolution urging Congress to repeal two provisions that deny people Social Security benefits they have already paid for out of their wages. The Windfall Elimination Provision (WEP) reduces retirement benefits when people also qualify for a public sector retirement program, and the Government Pension Offset (GPO) reduces and sometimes completely eliminates spousal and widows’ benefits for people with public sector pensions. Both of these provisions provide a strong disincentive for workers with private sector experience to take public service jobs, because they would lose benefits they have already paid into.
This situation is not uncommon. In fact, Alaska has the highest percentage of retirees affected by this misguided federal law. There is bipartisan legislation in Congress to repeal these provisions, and I hope our resolution will help encourage Alaska’s Congressional Delegation and Congress to take this important, long-overdue action.
Turning Your Ideas into Law
As your representative in Juneau, I often get ideas from constituents on things that need to be fixed. Here are a few examples of legislation I passed this year addressing issues brought to me by East Anchorage neighbors:
SB 161 – Political Party Definitions
In December, I received an email from a College Gate resident active with the Libertarian Party asking me to introduce a bill to set the standard for a political party to be officially recognized at 5,000 registered voters. Currently, the threshold fluctuates wildly based on voter turnout in the previous election, and after reviewing the proposal I agreed that it made sense to set it at a consistent number. I introduced this as Senate Bill 161 and we were able to successfully pass this bill through the legislature and it now awaits the governor’s signature.
Adult Adoption Fix
Last fall, I was contacted by a Muldoon resident about how a flaw in Alaska’s adoption laws was preventing her husband from adopting a young woman he had helped raise since she was 1-year old. I asked my staff to research this issue and we crafted an amendment to fix this. I reached out to Representative Grier Hopkins from Fairbanks, who had a bill related to family law issues that had already passed the House, and he graciously agreed to accept this as a friendly amendment to his bill when it went to the Senate floor. The Senate passed my amendment unanimously, the House concurred with the changes, and the bill next goes to the governor.
Eliminating Funding for Alaska’s Frivolous, Anti-Military Participation in Texas Lawsuit
Recently an East Anchorage area resident brought to my attention the case of Torres v. Texas Department of Public Safety which is currently before the U.S. Supreme Court. This case has the potential to gut the rights of National Guard and Reserve members who work for state and local governments who try to return to their civilian jobs after deployments. Unfortunately, Alaska’s Attorney General signed on to a friend of the court brief supporting Texas’ position against servicemember rights. In the Senate Finance Committee, I added language to the budget establishing the legislature’s intent that no further money be spent on any activity related to this case, so that if the Supreme Court remands this case back to the lower courts that Alaska cannot continue to advocate against servicemembers’ rights.
As always, feel free to reach out to my office if I can be of assistance.
Alaska Senate Democrats | Capitol Building, 4th Avenue & Main Street, Juneau, AK 99801