The 29th Alaska Legislature entered a record-breaking fifth special session Monday in an effort to balance its multi-billion dollar budget.
The agreed upon FY17 budget has removed $3.2 billion from the state’s constitutional reserve fund. But through the fifth special session, Gov. Bill Walker hopes to talk about alternate funding methods such as the Permanent Fund Dividend, income tax and more.
Rep. Sam Kito III gave an update to the Skagway Borough Assembly on July 7, and said so far, the legislature has passed a Medicaid reform bill, which will save $230 million annually, and a judicial reform bill, which is anticipated to save the state over $300 million each year.
The Medicaid bill aims to expand the use of telemedicine, primary care case management, reform the behavioral health system and more, while the justice reform bill will reduce the state’s prison population by reforming bail, sentencing and pretrial supervision.
But even with the multi-million dollar savings, the legislature needs more to fund its needs.
A $660 million veto to the PFD is on the table, bringing the annual payment to approximately $1,000 per person. But that figure is still uncertain. Legislators have the option to override the veto during this special session and have talked about a fiscal plan that caps the PFD at $1,000 per person.
“My goal would be not to just have a cap of $1,000, but to make sure people understand if we do deal with our fiscal situation, perhaps we can guarantee $1,000 for the dividend in addition to trying to take care of our fiscal situation,” he said.
The legislature has until July 16 to override the governor’s vetoes.
Luckily for Skagway, the Commercial Passenger Vessel excise tax was included in the budget, meaning the municipality can breathe a sigh of relief for another year. But Kito said there is still pressure on the overall issue, referencing a lawsuit between Cruise Line Agencies of Alaska and the city of Juneau. While Kito said he doesn’t suspect the lawsuit to be successful, if it is, whether the state can collect CPV funds will escalate.
Ferry service was also paired down by approximately 10 percent. Kito said the Alaska Marine Highway is considering selling the M/V Taku and laying up the M/V Chenega in Seattle.
“I think the long-term plan is to layup the fast ferries because they do cost more to operate, but they are very convenient, especially for northern Lynn Canal,” he said.
The governor’s office and Southeast Conference have put together a working group with representation from across southeast in an effort to form more of a strategic operations plan.
Kito said the fare recovery has increased by three percent over the past year, and while it’s not likely to get back to where it was in the 80s, he thinks there is still room for growth.
Skagway’s Borough Assembly passed a resolution on July 7, expressing the deep sense of urgency for the legislature to take immediate action during their fifth special session.
The resolution states, “The Borough Assembly of the Municipality of Skagway, Alaska, appreciates the difficult work of the administration to put forth one possible comprehensive fiscal solution; and while the Municipality of Skagway may not support every aspect of this plan, does recognize it as the appropriate foundation for legislative deliberation.”
Kito said he hopes the legislature can finish what it’s started.
“We need to figure out how to pay for state government,” he said. “We’ve passed a budget, we need to figure out how to pay for that budget.”