Senate leaders talk state issues at Southeast Conference

(L-R) Senate President Cathy Giessel, and Senators Bert Stedman, Natasha von Imhof and Tom Begich.

Juneau, Alaska (KINY) - Senate President Cathy Giessel, and Finance Commitee Co-Chairs Natasha von Imhof and Bert Stedman spoke about state priorities.

Giessel spoke about spending controls but not decimating the state.  "My challenge is convincing my district about things like the Alaska Marine Highway and how it provides critical infrastructure to commerce."

Senator von Imhof represents SW Anchorage.  She called 2020 interesting times.  "One of the themes is setting ourselves up for the future.  We have a dividend, we have a new revenue source in the percent of market value, dwindling oil revenue and expenses like health care are chewing up the budget."

She said a new dividend calculation, a spending cap, and stability are keys for the future.

"We represent the entire state.  It is important to listen to all voices and find a reasonable, balanced, sensible solution that tries to factor in as many ideas and opinions as possible.  It is not easy to do."

Senator Stedman said there is a problem with the Marine Highway.  The Malaspina is now being repaired.  He said things are not getting better but getting worse.

The governor is appointing a group to restructure the marine highway.  Stedman will represent the Senate on that group.  "It is unlikely we will agree with the elimination or termination of the marine highway.  This year's budget will be similar to last year.  I'll be negotiating some of the budget components with the governor.  Last year he wanted to eliminate the marine highway October 1. "

He said the winter time service has not served the region well.  He said it might take eight to 10 years before a new ferry is built.

"These are very serious matters.  The legislature will not have the same budget that the governor proposes.  We need to develop something he will sign.  Right now we don't have budget override numbers."

He said it will be a tough go to keep the marine highway viable.  "We have to come up with affordable and meaningful service for the communities.  When you take transportation out and energy prices up, the economy goes down."

Senate Minority Leader Tom Begich said the Anchorage Caucus is in support of increased funding for the marine highway system.  He said the current budget proposal is only a starting point.  He mentioned education funding as another priority.

Full funding for Village Public Safety Officers, jobs and opportunities for Alaskans, and meeting the state's obligation to its citizens were other priorities for Senator Begich.

School bond debt reimbursement, fighting wildfire, education, capital projects, and the marine highway are things that are being debated. 

"If we reduce the size of the dividend, $600 million, about $1,000 per person and we use the extra money toward capital, that would provide money for ferry maintenance, bridges suffering from climate change, paving, airports, roads, ports, you name it," von Imhof said.

She said she wants people to write letters to accept a $1,000 dividend.

Stedman said his concern is the future budgets.  "If that budget could be reduced Governor Dunleavy would do it.  When he adds back $300 million, cutting that budget is going to be pretty difficult.  It is easy to take money out but at the end of the day we get the bill handed to us and we have to pay it anyway."

He said the state has an anemic capital budget and there is a long list of deferred maintenance projects.

"I'm worried about how we get to year two and three and how we get the marine highway running up and down the straits next summer and next winter.  We could get financially vaporized if we don't fix some of these issues," he added.

Giessel said she hears a lot from constituents about a spending cap.  "Right now we don't need a spending cap.  We don't have any money.  We hope in the future we have revenue streams from various taxes on our various resources.  As the permanent fund grows the earnings from it will increase."

She noted $3 billion of the $5 billion available to spend this year comes from the Permanent Fund.

"We can't deplete the fund by continuing to give out oversized dividends."

Begich said the state has to redesign the dividend.  He said the permanent fund is our future and it is a renewable fund.  He noted many countries are de-emphasizing the use of fossil fuels.

He said another issue this year is a general obligation bond for capital projects.  He said new revenue like the gas tax bill, a head tax on education and smaller revenue measures must be part of the mix.

"You don't have to blow up the budget but you can have a 20-year trajectory that is reasonable," he added.

Stedman said the state will have to look at routes and levels of service for the marine highway and then look at the budget.  He wants to have at least minimal service in coastal Alaska.  He said it is important to maintain the entire fleet.

Senator von Imhof said she doesn't want the dividend to go away.  She said the state must also prioritize the deferred maintenance list.  She also wants the state to sell surplus properties and assets they don't need. 

She suggested $300 million for maintenance this year would be enough to boost the economy, accommodate contractor workloads, and still qualify for bonding.