When Gov. Mike Dunleavy released his proposed budget for his final year in office, he included what he calls a statutory permanent fund dividend, about $3,800, without an accompanying sustainable state fiscal plan.
Outgoing state Senate President Gary Stevens of Kodiak said that is unworkable.
“The one thing we have to do down here is to create a budget and of course we write the budget. The governor gave us his proposal. We know there are things in it that really do not work," Sen. Stevens said. "So we’ll have to work hard to try to find some compromises that allow us to continue operating as a state without overdrawing our limited savings.”
Dunleavy’s proposal draws more than $1.5 billion out of the state’s dwindling savings account, known as the Constitutional Budget Reserve. Dunleavy plans to brief the full Legislature this Thursday on his plan to raise new state revenue. Stevens said that will likely include options like a statewide seasonal sales tax.
“Maybe there are some other options out there. I’m thinking of one that might be a way for those communities who already have a sales tax to have some kind of a cap, that if, say, the state sales tax were to be 2% or 3%, we might say something like no more than 6% or 7%," he said.
Stevens has been in the Legislature for 26 years and has spent eight of those as Senate President.
His counterpart in the state House, Rep. Louise Stutes of Kodiak has her eyes set on a retirement system for state employees after the Legislature eliminated Alaska’s public pension program 20 years ago.
Stutes said there was progress made last session when the House passed HB78. But lawmakers have yet to get it over the finish line.
“There has been a retirement plan hammered out that isn’t going to break the state. And there’s just some resistance to it based on the old system, and it’s really too bad," she said. "But we have got to do something in order to maintain our teachers, and our public safety people and our state employees.”
Stutes has more leverage than most legislators this session as tentative chair of the House Rules and House Fisheries Committees. Her chairships are subject to lawmakers’ approval. Stutes is also part of the Alaska House Majority coalition. Her counterpart in the state Senate, Stevens is also a member of the majority in that body.
She said some of her priorities for this session come from recommendations from the former Alaska seafood industry task force such as a tax credit bill for seafood processors. Stutes says funding the Alaska Marine Highway System is another priority as it’s been in previous years for her.
“It’s going to be a real challenge because our federal dollars are waning in that respect and we’ve been using federal dollars for operating costs," Stutes said. "But we’re aware of it, I’ve made people here aware of it, so the state is going to have to start ponying up.”
The second session of the 34th Alaska Legislature is scheduled to begin Tuesday, Jan. 20, at 1 p.m.
