Dear District 18 Resident:

I want to let you know what is happening in the final hours of the legislative session. There are four major outstanding issues being resolved -- the bonding package, the operating and capital budgets, and the state employee contracts. All of these issues, and the legislative debate surrounding them, reflect the state's need for fiscal restraint due to the ongoing budget deficit.

The capital budget, SB 192, has passed the House. It has gone back to the Senate for concurrence with the House changes. This is a lean capital budget this year, and projects for District 18 are few. The Old Seward Highway project will continue with federal funds. The Girdwood Road Service Area Road and Drainage System Rehabilitation project will receive some state funds through the Municipal Capital Matching Grants Program. Elmore Road from DeArmoun to Huffman will also receive a combination of federal and municipal money. Phase I of the De Armoun Road reconstruction (from Westwind to East 140th) is in the design stage and is funded with 90% federal and 10% state funds.

The operating budget, HB 312, has passed the House and Senate. We kept our promise to reduce the General Fund operating budget by $30 million. We were also successful in fully funding the foundation formula for K-12 education, increasing public safety enforcement, and increasing the University of Alaska budget. I will have more about this in subsequent Legislative Updates.

Another major issue has been the bond package for schools and harbors -- a combination of two bills, HB 281 and HB 287, which have passed both the House and Senate. However, the House still needs to concur with changes made by the Senate. These bills will allow the state to sell the anticipated revenue from the tobacco settlement to the Alaska Housing Finance Corporation (AHFC). AHFC will then sell those and other bonds to finance projects around the state. Many other states are also taking advantage of this efficient way to utilize their anticipated settlement funds. District 18 will see funding for Phase I of the Service High School project with a 70%-30% reimbursement and district-wide major maintenance funding. Funding also includes the University of Alaska for major maintenance and construction, including the UAA Consortium Library, harbors (so that ownership and future responsibilities will be turned over to municipal governments), and rural schools. For me, an important element of this bill is that it provides a minimum of $1.4 million of the settlement for tobacco prevention and cessation programs annually.

The last remaining issue is the state employee contracts. My concern, and that of many in the Legislature, is that the negotiated contracts call for a net increase in costs -- both for pay and healthcare contributions -- that would have contributed to the state's deficit. The contracts call for a one-time $1,200 bonus in the first year of the contract, a 2% raise in base pay in year two, and a 3% increase in year three. It also calls for an increase in the state's contribution to the healthcare plan in each of the three years of the contract. Many of us in the House were concerned that the contracts should not increase the deficit. Consequently, the funding source was amended from General Funds to an unallocated, across-the-board cut in state spending that was intended to exclude public education and 24-hour facilities such as the Pioneers Home. The House, after much discussion, passed the contracts bill on Sunday. However, the Senate was unable to come to a consensus on the contracts as negotiated between the 12 unions and the administration. As a result, a special session on this topic will be called for tomorrow.

Those are the issues that have occupied the Legislature for the past week or so. I will continue to keep you informed about their progress.

As always, if you have any questions about these or any other issues, please let me know. I'll be glad to assist you.

Sincerely,

Con

PRIVACY POLICY: All addresses are "blind" for your privacy. A strict "no spam" policy is observed. If you don't wish to receive "Legislative Update", just let me know. If you know a friend or neighbor in District 18 who has not received "Legislative Update" but would like to be included, I will be glad to include them if they contact me. Your replies, comments, questions, and/or suggestions are welcome. Constituent comments on legislation and policy issues may be tabulated, shared with other legislators, or quoted in speeches. Names, however, will be kept private.

| Top | Representative Bunde's Page |