Last night the Kodiak Island Borough Assembly got its first taste of what the budget climate might be during the legislative session this year. During the work session the assembly spent a good chunk of time reviewing potential options for its state legislative capital improvement projects priority list, and heard from Borough Lobbyist Mark Hickey about what the atmosphere in Juneau is starting to look like.
“Based on using leg finance information and taking into account Senate Bill 21, the oil tax change, and the impact it will have on revenue at least to start with, I think the projection used in the department of revenue’s most recent forecast for oil, the projection is that we could have a deficit of a $1 billion for the current fiscal year, before the legislature starts talking about, for the next budget, get rid of $1 billion. So you’re looking at significant pressure, continued pressure, on budget reductions and the honest reality is there’s only so much that can be done on the operating side. I mean that’s where they’ll look first, but it ultimately becomes a capital, where you see that problem. And they’re going to have to take from savings just to handle, for example, the current year’s problem, and in all likelihood that’s probably the option.”
Kodiak’s Representative Alan Austerman, who co-chairs the House Finance Committee, was also present during last night’s work session and gave his two cents on the state’s budget.
“The dollar value that the state of Alaska has to spend now is less than it’s been in the past. So we’re going to continue to see a ratcheting down of our budgets. I expect somewhere in the neighborhood of $1 billion being cut from the budget this year compared to last year. That’s the governor’s five year plan, to cut the budget back. And the legislature has bought into that. We’ve got to get control of what we’re doing.”
One item that was included on the borough’s CIP list was the M/V
Tustumena replacement’s design and construction. It’s no secret that
Kodiak has felt the effects of the Tustumena’s lack of service for the
past year, and the borough wanted to emphasize the need for its
replacement to both Governor Sean Parnell and the legislature. However,
Austerman said he wasn’t sure including it on the borough’s CIP list
would send the best message.
“When the legislature looks at
someone’s capital improvement list they look at it and say the number
one priority is to build a Tustumena. So we all agree that we’re going
to give $50 million this first year to building the Tustumena and Kodiak
is taken care of, yep. If you’ve got water and sewer projects, they’re
way down the list down here some place. And so that’s the first
impression, it’s not always the right impression, and it’s not always
the way that it will go. We will make every argument that we can, this
is a statewide issue, this is not Kodiak’s CIP list, but it is number
one on your list. It makes me a little nervous that you’ve got it as
number one on your list.”
Instead, Austerman suggested the borough and city craft a resolution
for the governor and legislature, stressing the need for a new
Tustumena class ferry. He suggested the borough work with other towns
and cities along the Tustumena’s regular sailing route and ask them to
pass a similar resolution. Assembly members agreed that would be a
better approach than including the Tustumena on the CIP list, and said
they could get a resolution like that approved during next Thursday’s
During the packet review portion of the work session, the assembly
narrowed the rest of the legislative CIP list down to eight tentative
projects. The hope is to also approve that prioritized list
during next week’s regular meeting.
Tune in to KMXT next week as we take a closer look at those eight
projects and some of the discussion between assembly members, Hickey and
Representative Austerman during last night’s work session.