Capitol Live: Lawmakers ask governor to preserve transboundary work group

Live updates from inside the Capitol.

5:01 p.m.

Jill Weitz, the director of the nonprofit Salmon Beyond Borders, released the following statement about the letter to Dunleavy’s administration:

“Salmon Beyond Borders thanks the 22 legislators who brought this to the governor’s attention,” Weitz said in the statement. “It’s essential that Gov. Dunleavy works to ensure Alaska voices are heard and that B.C. is liable for impacts from B.C. projects that could affect Alaska’s resources and communities. As the threat along Alaska’s border grows, it’s more important than ever that the state works with the governments of Washington, Idaho and Montana to defend U.S. interests. We look forward to working with the administration.”

— Alex McCarthy

2:25 p.m.

Twenty-two legislators — including all three of Juneau’s lawmakers — signed a letter this month asking Gov. Mike Dunleavy and Lt. Gov. Kevin Meyer to continue the Transboundary Working Group. The group, established by former Gov. Bill Walker and former British Columbia Premier Christy Clark in 2015, aims to transparently share information and best practices, collaborate on data gathering and research, and to discuss draft permits and authorizations.

“It is critically important that we work with Canada to protect and encourage industry, particularly our maritime and aquaculture industries,” Rep. Dan Ortiz, I-Ketchikan said in a press release. “Without the involvement of our governor and lieutenant governor, the State of Alaska doesn’t have a seat at the table during these discussions.”

The letter is embedded below.

— Alex McCarthy

10:15 a.m.

Teal wrapping up now, saying he’s not telling the senators much that they don’t know. They can spend money on dividends, they can spend money on government, but they can’t spend money twice, he says.

“The governor is right when he says the House proposal is an incomplete fix,” Teal says. “You will not have a complete fix until dividends are determined.”

— Alex McCarthy

10:13 a.m.

Stedman reminds people that projections 10 years out should always be taken with a grain of salt.

“Ten years previous to this, no one would have known what 2019, 2020 look like,” Stedman says.

— Alex McCarthy

10:02 a.m.

Teal starts dropping elbows on the governor’s budget as it relates to his stated priorities, saying the House’s budget proposal does a better job of balancing the budget, funding core services, preserving savings accounts and providing a more sustainable and predictable future for the budget. The one major difference is that the House plan will leave less money for PFDs.

— Alex McCarthy

9:53 a.m.

Sen. Peter Micciche, R-Soldotna, tries to set the record straight. While the House budget doesn’t include any taxes, it does reduce the PFD, so it does affect household income. While the governor’s budget keeps the PFD high, it will result in a rise in local taxes.

“It’s not like either one is impact free,” Micciche says.

Teal concurs.

— Alex McCarthy

9:37 a.m.

Teal shows numbers and graphs that show that Dunleavy’s budget proposal can balance the budget long-term. There are signs of stability there, Teal says.

But, he asks, is the governor’s budget practical?

“It relies on revenue that may not materialize,” Teal says. “That’s because the Legislature shows no signs of support. I’m referring of course to the oil and gas property tax and the treasury sweeping the (Unrestricted General Fund) funds. If those things don’t happen, the governor’s scenario looks much different.”

— Alex McCarthy

9:33 a.m.

Teal says that if the state dipped into the Earnings Reserve to pay people back for previous Permanent Fund Dividends, the Earnings Reserve might never recover as the Permanent Fund falls behind inflation.

— Alex McCarthy

9:25 a.m.

Office of Management and Budget Economist Ed King is watching Teal’s presentation and is not impressed with Legislative Finance’s projections.

— Alex McCarthy

9:10 a.m.

Teal is looking specifically at the long-term implications of the budget.

He shows a slide that illustrates that under the governor’s plan, the budget balances in Fiscal Year 2020 without drawing from reserves. In the years after that, the state would draw from reserves, including a $455 million draw in 2022.

Teal points out that eventually, in Fiscal Year 2027, the budget could balance again without drawing from savings.

“The governor’s plan is not merely a spending plan, but a revenue plan as well,” Teal says, pointing out more than $400 million that will come from municipalities, including oil revenues that would normally go to the North Slope Borough.

— Alex McCarthy

9:05 a.m.

Up at the Senate Finance Committee, Legislative Finance Director David Teal is set to speak to the committee. Yesterday, Chair Bert Stedman says, the committee adopted a proposal that’s basically a compilation of what all the Senate Finance subcommittees did.

— Alex McCarthy

8:30 a.m.

One of the main bits of news yesterday was the Department of Health and Social Services amending the state’s contract for the Alaska Psychiatric Institute. The Associated Press reports that the department reached an agreement with Wellpath Recovery Solutions to only operate the institute through the end of the calendar year instead of five years.

Wellpath was awarded the contract earlier this session after a fast process that many believed was illegal in that it wasn’t open enough to other organizations. For example, Senate Minority Leader Tom Begich, D-Anchorage, released the following statement last night:

“The commissioner of Health & Social Services’ decision to terminate the sole source contract with Wellpath underscores our belief in the illegality of the contract and frustration with the process in which it was awarded,” Begich said. “Nevertheless, it will cost the state $1 million a month for Wellpath to continue operations until December of 2019. We must establish oversight and transparency during this transitional process to ensure the health and safety of patients, and we must ensure the API employees receive the full protection of the law. I look forward to seeing the administration’s proposed management plan for API in the near future.”

— Alex McCarthy

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