Dear Neighbors,

As you have likely heard in the media, the Legislature has achieved a deal on the state budget for next fiscal year. An agreement was finally reached about 11:00 last night.

The Democrats will provide the Constitutionally mandated three-quarter’s vote to use the Constitutional Budget Reserve (CBR) to balance the budget in exchange for $13 million in capital projects. Those projects are the top sixteen schools on the Department of Education's Major Maintenance List plus measures to control bank erosion in front of the school in Shishmaref.

The legislative process requires compromise, whether the issue is a piece of legislation or the budget. As long as we continue to spend more than we take in through revenue, we will continue to have to achieve a compromise that leads us to the three-quarter’s vote necessary to access the CBR.

I am very disappointed that we have not yet been able to reach agreement on providing the state a more stable revenue source. We continue to have four main options to fill our fiscal gap – a statewide personal tax (sales or income), use of the earnings of the Permanent Fund, increased corporate taxes, and a spending cap. However, so far this year, various combinations of Republicans and Democrats have voted “no” on all four options. I continue to think there is no one single answer to our state's fiscal challenges. It will take a combination of solutions and I continue to work toward that end.

There is hope, however. Negotiations are continuing in an effort to put Percent of Market Value (POMV) plan before the voters this November. POMV, if passed by the Legislature and the voters, will allow PFDs to remain a vibrant stimulus to families and our economy and allow some use of Permanent Fund earnings to help support basic state services.

Some of you are likely interested in the proposed tobacco tax as another source of revenue and/or a tool to curb youth smoking. The House is unwilling to pass the proposed $1.00 per pack tax but I am continuing my work to achieve this. This is one of the important issues that still needs to be addressed in the few remaining hours of the session.

The House and Senate also continue to vote on other important bills. You can get up-to-the-minute information on House and Senate action on these remaining items at www.legis.state.ak.us/basis. Just click on “House and Senate Calendars” and then click “Both” and refresh your computer periodically. You can also listen to or watch House and Senate action on Gavel to Gavel’s website at www.ktoo.org/gavel or Cable Channel 18.

The media has also been rife with rumors of a special session. I have no further information on this at this time. I will, however, keep you posted.

Please contact me if you'd like an update on the budget or any piece of legislation. My staff and I will be here until session ends at midnight and will be happy to hear from you.

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