The 30th Legislature drew its latest session to a close earlier last week, pushing forward a budget deal that would tap into earnings from Alaska’s Permanent Fund to draw down its spending deficit from the billions to around $700 million next year.
Back home in Ketchikan, independent Rep. Dan Ortiz of District 36 thought the package left something to be desired, which under the circumstances was a good thing.
“I feel it’s a good example of a good compromise budget,” he reflected. “Nobody really got everything that they wanted, but it reflects give and take on both sides, both bodies, all four caucuses.”
The House and Senate were able to reach agreement on the operating and capital budgets for the coming fiscal year, which begins July 1. As of this printing, both items were being examined by the office of Gov. Bill Walker for signature, likely sometime next month.
“I felt like the capital budget was good for the region,” said Ortiz.
One example was inclusion of $5 million into the Department of Transportation’s facility maintenance account for the state’s ports and harbors, reestablishing the fund for future projects. Wrangell’s Shoemaker Bay Harbor is the latest to benefit from the program, with a like amount being matched by city reserves and bond money to rebuild its aging floats later this year.
Wrangell also benefited from an additional $5 million the capital budget allotted to its ongoing Byford yard site cleanup. Coming from the Department of Environmental Conservation’s spill response fund, the money may be enough to allow transport of remaining contaminated soil to be barged off-island, rather than heading to a local monofill site. The additional funding had been requested of the legislature by Walker, after receiving input from the local tribal and city governments.
“I took my lead from the governor’s request, as well as from the assembly’s letter,” said Ortiz. He acknowledged the development has its pros and cons, on the one hand avoiding a sensitive monofill site selection but on the other costing the state big, around $17 million in all. The local economic impact the project would have had will also have been redirected elsewhere, since the material will instead be transported.
“I know it didn’t make everybody happy, but I think in the end the fact that we’re going to get the material off the island in the long run is going to be good for Wrangell, good for the community,” said Ortiz.
Two late additions to the year’s budget will see wider benefits.
“In terms of the budget itself, the fact we were able to kick in $78 into the (base student allocation) formula per student, that’s going to help the community of Wrangell, it’s going to help out communities across the state,” he said.
Formerly an educator, Ortiz noted the BSA had been flat for the past few years’ budgets, and felt that an increase was overdue.
“It needed a bump and I was glad to see that,” he commented. It was his expectation the BSA would see a bigger bump upward again next year.
“It was good to get the $20 (million) in the Marine Highway budget,” Ortiz added, a late addition to the capital budget. “It gives the Marine Highway System some certainty, and will allow them to meet their scheduled obligations.”
One potentially contentious measure passed by both chambers this year was Senate Bill 26, which allows legislators to tap into earnings from the Permanent Fund. Following a percent-of-market-value approach, up to 5.25 percent of the fund could be drawn from the fund, to be divided between operational spending and individual dividends.
“It’s going to be more like a 4.3 percent (draw), because it’s based on a rolling average,” Ortiz pointed out. He would have preferred to see the draw rate set at 5 percent rather than 5.25, but within three fiscal years that rate is scheduled to decrease. “That makes it more sustainable and more likely that we’ll be able to maintain and grow the value of the fund as we go forward. That’s important to me.”
The budget still has a sizable hole in it, to the tune of $700 million. However, a recent rise in petroleum prices has been heartening for the state’s financial outlook.
“If oil prices continue in their upward rise, that will help to close the gap even more,” said Ortiz. “After that, we’re going to have to continue to look at agency spending and see if we can find some places to do some trims.”
Though a compromise budget was reached this year, next year’s session will bring with it renewed differences over the direction of state spending and new revenue creation.
“Obviously, we still have our differences. But I think there’s a recognition that it was in everybody’s interest to finish earlier this year, and it was in everybody’s best interest to compromise and give in some from our most desired ones to recognize the needs of everyone in the state and come up with something that will work for everybody, and I think we came close to that,” said Ortiz.
As with other members of the House, 2018 is an election year for Ortiz, who intends to run to retain his seat. No primary candidates are currently listed on the Division of Elections website, with the last day to file for inclusion on the August 21 primary ballot June 1.
Ahead of this year’s general election, Ortiz anticipated paying Wrangell and other constituencies a visit this summer.
“I plan to walk the community,” he said. “I’m looking for feedback on what we’ve done so far in the legislature since I’ve been there.” He was elected in 2014.
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