Dear Friends and Neighbors:
Houston, we have a problem! If you’d like to testify tomorrow on the operating budget before the House Finance committee, you’ll need some information, and it’s provided below.
The State seems to be building its own fiscal cliff to tumble over.
How? By creating a $1 – 1.5 billion deficit through a poorly crafted oil tax giveaway. The biggest part of the tax break gives away $1.5 billion or more in state revenue when oil prices are high. The Governor’s oil bill gives away our fair share of windfall profits, and allows companies to take that money and spend it anywhere in the world they want. That likely means not in Alaska. As you’ve read, I and others have proposed a smarter plan that requires Alaskan investment and production in exchange for meaningful, but not devastating (temporary in most cases) tax relief on new fields, heavy oil production, and new developments in existing fields. For more information, here is a link to our last op-ed that discusses that plan.
At the same time we are looking at a budget that seems to be built towards this artificially-created fiscal cliff. At the bottom of this e-news I will let you know when you can testify on Tuesday if you oppose any of the existing tentative budget proposals being considered by the House Finance committee, on which I sit.
The budget cuts voluntary pre-k education that we only provide in pockets of the state, and don’t provide on a statewide basis. It leaves out any effort to reverse the Governor’s classroom funding cuts for k-12 education. It cuts good proposals to build a strong university, cuts substance abuse treatment funds, and more.
I believe in cutting waste. Like the Rocket Launch facility in Kodiak that has cost us over $20 million during the past two years yet operates without a single launch contract. Despite annual promises that they are about to stop using state money to stay open without launching any satellites or rockets, the facility sits expensive and idle, and I believe it is time to lease it, if it truly has a viable future. Or stop wasting money on it if it doesn’t.
I also believe that with public testimony and the work of the full Finance Committee, many of these issues will be fixed. I hope. For the sake of our children, schools, a needed economic engine at the University, and those who wish to better their lives by dealing with substance abuse addiction but cannot afford high-cost treatment.
Here are some of the budget proposals that concern me, that can potentially be reversed by the House Finance Committee…
Pre-K Education Cuts – Cutting Educational Opportunity and Achievement At The Knees?
Last year we passed a conservative, bi-partisan pre-k plan called “Parents as Teachers”. We do some of that now, and aimed to expand it to more communities at a cost of roughly $3.3 million per year. The Governor cut roughly $3 million of that amount, and the Education Budget Subcommittee recommends cutting that remaining $400,000 addition by another $240,000. There is $800,000 remaining in this program, which doesn’t let the funds reach most communities in a meaningful way.
We also launched a $2 million “Pilot” pre-K program that served only 211 students. The goal was to prove to skeptics what studies show – that pre-k improves academic achievement. It did. Upon successful implementation, the promise was that it would be expanded to other communities with an additional $2 million each year until families across the state who sought a need for pre-k for their kids were served. Well, that promise has been violated. The Governor vetoed most of the $2 million increase the Legislature passed last year, and the current recommendation from the Education Budget Subcommittee is to cut it back to its original $2 million. We will again serve roughly 200 children with a program that’s been proven to work.
Outside of Head Start pre-k for some low-income children, Alaska only serves roughly 600 families statewide through the stunted pilot program and slashed Parents as Teachers effort. That’s a failure on our part to prepare our next generation for success.
And that subcommittee has slashed Best Beginnings, an effort to spread early learning across the state. It has been cut from $937,500 last year to $800,000 this year.
K-12 Education Cuts
I anticipate that at some point we will get traction on the ability to fund our schools properly. But right now with the Governor’s proposal we are stuck with a budget that would lead to a third year in a row of educational staff cuts across the state. Legislation proposed by my colleagues and myself, House Bill 95, would reverse those cuts. A budget increment would also reverse those cuts. Here is my op-ed on the subject that ran in the Anchorage Daily News this week that provides more detail than I can provide here.
The Governor has called keeping education funding up with rising costs of inflation and medical insurance costs “the ultimate giveaway”. I don’t get that. I don’t get cutting staff every year. And I don’t get his demand that schools show they are improving before we fund them.
That’s like kneecapping someone and telling them to show you they can now run faster.
No Help To Build A University To Better Diversify and Expand Our Economy?
A strong university is one of the ways we can become a research center for renewable energy, climate change, and other areas that Alaska is well-suited for. The Board of Regents is responsible for submitting the initial budget request.
The Governor rejected roughly half of their proposals including proposed assistance by the University to school districts to improve education; initiatives in health care and workforce development; fisheries, seafood, and mining initiatives; and University of Alaska press work on Alaska history and culture. Also denied were regents’ requests for many utility and maintenance increases, and UAF’s resources extraction-related “Process Technology” program. Finally, the House Budget Subcommittee reduced roughly $2.4 million of the governor’s proposed increments, roughly $2 million of which was needed for the operation of the Fairbanks health sciences building, which left an increase in university spending that almost solely covers labor contract increases. So – don’t expect any enhancement of courses, or efforts to attract federal or private research money this year. The stated intention is that this will be a blueprint for future state university funding.
Substance Abuse Funding?
We know there are waiting lists across the state for those seeking alcoholism and substance abuse treatment. We can leave Alaskans untreated. We can tell those addicted to heroin in Anchorage that they can’t get treatment (unless you’re pregnant it’s hard to find treatment if you can’t afford it).
The budget takes out roughly $8 million of treatment funds appropriated last year. It adds “one-time” grants of roughly $8 million that will disappear next year unless someone increases that amount next year. It leaves us with waiting lists or lack of access to treatment for too many Alaskans, and doesn’t add back the major vetoes the governor made to substance abuse treatment last year.
For the state with the nation’s worst alcoholism and domestic violence rates, this is not a good move.
People who want off of an addiction shouldn’t be told we’re okay with them going to their heroin dealer or that we’re okay if they keep drinking. That’s agony to families, and children, and jail time, and foster care, and police calls we cannot afford. Finally, the state doesn’t plan to replace a loss of roughly $700,000 in federal funds that boost education efforts and jobs and helps run our rehabilitation courts that monitor non-violent prisoners through mental health and substance abuse treatment.
If you’d like to testify tomorrow, we want to hear you. Here is the schedule for legislative information office testimony tomorrow (some sites testify in the daytime, some at night). If you can’t make it there, sometimes the Finance Chair lets you call in. You’d need to get permission from Rep. Alan Austerman’s office in advance by calling 465-2487.
Let us know if you have questions! But this is the sort of budget you can expect if the Governor’s oil bill passes. One that does little to strengthen our economy, our students, and our ability to build a diversified economy.
The current proposed operating budget sits at roughly $7.7 billion in state funds, or roughly 2% above last year’s. I believe small changes, both in cuts and fixes, can make this budget much stronger.