Chugiak-Eagle River legislators deliver frank fiscal update
Home following a marathon legislative season, a trio of local lawmakers gathered in Eagle River July 19 to give constituents a bleak brief on capitol affairs.
“It’s a messy business with 60 people, all with different ideas,” said Sen. Shelley Hughes, a District F Republican, at a weekly meeting of the Chugiak-Eagle River Chamber of Commerce. “The state is at a serious crossroads.”
Hughes joined fellow Republican legislators Rep. Dan Saddler (District 13), and Rep. Cathy Tilton, (District 12), at the Chamber luncheon at the Eagle River Alehouse, where the three took questions on topics ranging from taxes to health care to criminal justice reform. They addressed the state’s gloomy fiscal situation and their many attempts to change it.
“Our team of minority members worked very, very hard to find reductions in the budget, and we presented – as probably most of you read – about 300 amendments,” said Tilton, a member of the Alaska House Finance Committee. “All of those were rejected, except for a very few.”
In June, Alaska Gov. Bill Walker signed off on a $4.9 billion fiscal year 2018 operating budget, funding a $2.5 billion deficit entirely through state savings, according to a statement from the governor’s office. In July, the financial services firm Moody’s downgraded the state’s credit rating from an Aa2 to Aa3, citing Alaska’s “ongoing structural budget imbalance, a small economy with concentration in energy production, large fixed costs and heavy pension burden.” The outlook is negative, Moody’s reported. Only Illinois and New Jersey now have lower ratings, according to the State of Alaska.
The three area lawmakers — who all gave numerous reasons why voters should not hold them individually responsible for the recent credit downgrade — spoke critically Wednesday about the Legislature’s recent prolonged performance in Juneau. Reading from prepared notes, Saddler described a partisan gridlock that ultimately ground to a halt not far from where it began.
“I tried to put it all in one sentence or one paragraph, and it comes out like this: Facing fundamentally irreconcilable views about how to deal with Alaska’s deficit, the Legislature basically took no extreme steps either way,” Saddler said. “We didn’t make big cuts, we didn’t make big moves towards revenue, we didn’t do much until the last minute – and in some cases, not until after the last minute – and always in great confusion and agony.”
He spoke about legislative disagreements over oil and income taxes, the Permanent Fund, spending cuts and other issues. He mentioned “inexperienced and clumsy” Democrat lawmakers, and reminded chamber members House Republicans were in the minority this past session. Alaskan politicians continue to hold “fundamental differences” – differences that will likely persist into the next session, Saddler said.
On one side is an “entitlement state” where “the few productive workers” hold jobs and support those who can’t or won’t, Saddler told attendees at the Chamber of Commerce luncheon
“The other view is an opportunity state that does encourage new production, new oil, new gas, allows private industry the chance to innovate and thrive, limits government and holds citizens responsible for their choices,” he said. “I do hope there is room for compromise so … the people on both sides can work together for the good of our state.”
The Eagle River representative said he voted in favor of the recent operating budget compromise in order to avoid a government shutdown and the ensuing destruction to local economies. Sitting next to him, Hughes said she voted against the budget bill, “a decision that I felt was in the best interest of the state and would reflect those in my district,” she said.
“I believe that we didn’t do what we really set out to do,” Hughes told the local businesspeople assembled for the Chamber luncheon.
Hughes said she was glad to see the most recent threat of government shutdown averted, but she believed the FY 2018 operating budget deal set the state on a path toward implementing a broad-based tax.
“Now my job is to let Alaskans know: Is this the way we want to go?” Hughes said. “Is this the direction? Do we want to look like California? Do we want to look like New York? I don’t believe we do.”
After the regular 120-day legislative session and two more month-long special sessions, the lawmakers’ work was still not done: As of the Wednesday luncheon, they had yet to pass a capital budget. On Friday, July 21, Sen. Anna MacKinnon — an Eagle River Republican who co-chairs the Senate Finance Committee, said legislators had worked out a compromise on the capital budget and would meet to finalize the legislation.
“I am pleased with the spirit of compromise both bodies had when negotiating the final agreement,” MacKinnon said in a press release.
The session was later scheduled to begin Thursday, July 27, with the intent of passing the capital budget “promptly,” according to a statement issued by House Speaker Bryce Edgmon, D-Dillingham, and Senate President Pete Kelly, R-Fairbanks. The statement said the House and Senate will convene at 11 a.m. before taking a recess for legislators from the two bodies to meet in conference committee.
“The intent is to finalize a compromise Fiscal Year 2018 capital budget and promptly reconvene the House and Senate floor sessions to formally pass the capital budget,” the statement said.
Contact Chugiak-Eagle River Star reporter Kirsten Swann at [email protected]