Wrangell residents will have an opportunity to offer their two cents on the state operating budget currently in development in the Alaska House.
The basis for the draft budget was proposed by Gov. Bill Walker last December. Being considered now in the House, bill number 286 will see a number of amendments to it that have been put forward by the chamber’s representatives and various subcommittees.
“We’re in the process of finalizing what we’ll be looking at right now,” said Rep. Dan Ortiz (U-District 36), who sits on the House Finance Committee.
Testimony from around the state begins this afternoon, with a second round of teleconferences scheduled for Friday. During tomorrow afternoon’s session Wrangell residents will be allotted time to speak between 4 and 5 p.m., with a speakerphone set out in the Legislative Information Office, on the second floor of the Kadin Building on Front Street.
“We’re sharing it with five other communities,” LIO officer Sarah Wittlesey-Merritt said of the hour-long timeframe.
During that time House Finance will also be hearing from Bethel, Cordova, Kotzebue, Nome and Valdez. In order to deal with concerns as efficiently as possible, the committee asks that testimony be limited to two minutes per speaker.
“They’re going to be very strict about that,” Whittlesey-Merritt added.
Pushing to pass its own version of the budget sometime next month, the House will be taking its input from the public before Finance adds amendments that reflect those concerns. Once that process is done, a finished product will undergo a floor vote before heading to the Senate.
“There’s that opportunity statewide for people to weigh in on where things stand with the budget,” said Ortiz, who encouraged constituents to participate.
Legislature leadership will try to finish its session after an allotted 90 days, though it can go for 120 before requiring a special session. Four such additional sessions were called last year, running through much of the calendar. While an attempt to get things put together in a more timely schedule this year is on the table, the issue of finding a fiscal solution to the budget seems fertile ground for disagreement.
“The big issues are funding for closing our fiscal gap, and what’ll we have in terms of a percent-of-market-value draw,” explained Ortiz.
Faced with an approximately $2.5 billion spending deficit this year, the Legislature has for the past four years been covering operational spending for similarly multibillion-dollar deficits with reserve savings and agency cuts. With the budget reserve funds now nearing exhaustion, legislators have been looking to the Alaska Permanent Fund as a possible out.
Valued at $66 billion by January’s end, the Fund currently allows for earnings to be drawn into a reserve account, through which annual dividends are apportioned out to state residents. Gaining traction in both chambers as a possible solution to its budget crisis would be a percent-of-market-value (POMV) draw from the Fund to partially pay for state operations. A 5.25-percent draw based on a five-year market value average of the Fund has been suggested, last session in the form of Senate Bill 26, which was not adopted.
“I think there’s still some division throughout the Legislature,” Ortiz commented. However, he saw consensus remaining on a POMV model, though questions of the size of the draw and proportion allotted to the dividend would still need to be worked out.
“I do think by the end of the session we will have voted across the board for a POMV draw,” he predicted, though he would not hazard a guess when that would be. “We’re making progress. I feel like there’s a lot of support for getting out without the added special sessions.”
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