Four major themes define what must get done in the Legislature this year. They are fiscal, Medicaid, criminal justice, and oil and gas tax credit reform. These require us to address Alaska’s greatest cost drivers and to rethink outdated ways of doing business.
The House Finance Committee is working with the governor to create a Permanent Fund Endowment under House Bill 245 with an average annual draw from the Permanent Fund of 4.8 percent of the current value. This will pay for dividends and state services such as education, roads, ferries and public safety.
Permanent Fund Dividends would be funded with 20 percent of the annual percent-of-market value (POMV) draw and 20 percent of our royalty share of oil. Dividends would be $1,000 in each of the next three years, starting this October and thereafter calculated under the new formula.
Medicaid and the Department of Corrections are two of the largest components of the state budget. Costs in these two areas alone equal roughly one-fifth of our state’s annual spending.
In the past 10 years, our prison population has grown by 27 percent, with a significant increase in pretrial holds and longer sentences for nonviolent crime. In 2015, the Alaska Legislature, in cooperation with Alaska Supreme Court Justice Dana Fabe and Gov. Bill Walker, requested technical assistance from the Pew Charitable Trust to review best practices across the country and recommend statutory revisions to address our prison crisis. Under Senate Bill 91, risk assessments in parole determination, modifications in bail and sentencing practices, and shorter prison stays for technical parole violations are some of the results from that work.
Oil and gas tax credit reform in House Bill 247 is also a necessary component of a fiscal plan. In the Cook Inlet region, tax credits have been successful in restoring a reliable gas supply to the Anchorage area, but the state’s current fiscal climate has compelled us to consider phasing out those incentives.
Each of these four issues — fiscal, Medicaid, criminal justice, and oil and gas tax credit reform — is a complex undertaking, but together they will put Alaska on a more sound fiscal footing. With Medicaid legislation having passed, Senate Bill 91 on its way to a House Floor vote, and discussions continuing on a Permanent Fund Endowment and oil and gas tax credits, we are making progress.
First National Bank Alaska has graciously provided office space for legislators at the Bill Ray Center for lawmakers who are displaced by major renovations at the Capitol.
At such a critical juncture, additional time is needed to build cooperation and consensus for moving forward. To do otherwise is not an option.
Please don’t hesitate to call for updates, 465-3744 or email me at representative.cathy.munoz@akleg.gov.
• Rep. Cathy Muñoz, R-Juneau.
