The Capitol Report for Feb. 13, 2017
February 14, 2017
By Miles Baker
UA associate vice president, government relations
Yesterday was the 28th day of the legislative session. It’s difficult to believe, but, by the time this week is over, we will be one-third of the way through the regular 90-day session.
I’m happy to welcome several important university advocacy groups to Juneau this week. The Coalition of Student Leaders arrived Saturday for their annual Legislative Conference. Student representatives from all three universities are here to participate in valuable policy discussions and to advocate for the university. I was honored to speak with the students yesterday morning and to participate in their legislative priorities discussion. Also joining me in the Capitol this week are representatives from each of our three alumni associations who have come together this year for a joint “UA Impact” fly-in. Both groups have busy agendas that include meetings with individual legislators over the next several days. The interest and enthusiasm they demonstrate for the university is incredibly valuable to this process.
Most of the excitement in the Capitol last week centered on the introduction of two major pieces of legislation by the House majority coalition.
HB 111, introduced on Wednesday by the House Resources Committee, scales back some of the state’s oil and gas tax credits. The bill establishes a 4 percent production tax floor, reduces the per barrel credit, and reduces the net operating loss credit. Sponsors estimate the bill could result in $100 million to $300 million in additional revenue to the state at $70-per-barrel oil. House Resources Committee hearings are scheduled for today and Friday .
HB 115, introduced on Friday by the House Finance Committee, is the majority coalition’s fiscal reform package. The bill restructures the Permanent Fund to allow 4.75 percent of its overall market value to be drawn off annually with one-third of the revenue paying dividends and the remaining two-thirds paying for state services. Under the proposal, dividends would be approximately $1,100 and the general fund would receive approximately $1.5 billion to $2 billion annually. The bill also establishes a new income tax of 15 percent of an individual’s federal income tax and a capital gains tax of 10 percent. The taxes would raise an estimated $655 million annually once fully implemented. HB115 is the latest of several Permanent Fund restructuring proposals introduced this year. For the sixth year in a row, the state will have to draw on its savings accounts to balance the budget. But with only another year’s worth of savings available, serious conversations are happening about how the Permanent Fund’s earnings will be part of the revenue mix going forward. HB 115 is scheduled for four hearings in the House Finance Committee this week, with a round of public testimony set for Friday at 1:30 p.m.
In university-related news, on Wednesday morning, President Jim Johnsen provided an overview to the Senate Education Committee. President Johnsen discussed the university’s mission, the “65 by 2025” education imperative, the correlation between income and educational attainment, Strategic Pathways, the regents’ 10-year budget glide path, and the board’s highest priorities for continued investment. President Johnsen outlined the significant impacts that three years of budget reductions have had across the entire system. He noted that the university is the number one Arctic research university in the world. That work helps attract graduate students from all over the world and improves the quality of education in the classroom, while solving Alaska-specific problems and informing global climate policy. You can watch President Johnsen and get committee presentation materials here.
Thursday afternoon, the University of Alaska House Finance Budget Subcommittee held its second meeting on UA’s FY18 operating budget. Dan White, vice president for academic affairs and research, presented for the university. Dan explained the “65 by 2025” education imperative and UA’s partnership with the state Department of Education and Early Development, and he outlined UA’s early plans for increasing enrollment and retention. You can watch Dan and get committee presentation materials here.
Friday afternoon, Dr. Ralph Townsend, director of the Institute of Social and Economic Research, participated in a House Finance Committee hearing on fiscal policy planning and forecasting. Dr. Townsend and the team at ISER continue to demonstrate their value to policy makers in Juneau. Dr. Townsend reviewed the tax options available to the state and emphasized the importance of multiyear fiscal planning to mitigate risks of depleting the Permanent Fund’s earnings reserve. You can watch Dr. Townsend and get committee presentation materials here.
*Coming Up This Week:*
Wednesday is the statutory deadline for the governor to submit his FY18 budget amendments. The Legislature can always consider amendments after that date, but for those amendments to be considered in the Legislature’s normal budget process, they must be transmitted by the 30th day of the session.
Wednesday, Feb. 15., at 8 a.m. the House Finance Education Subcommittee will discuss the Alaska Post-Secondary Education Commission, WWAMI program, Alaska Performance Scholarships and the Alaska Student Loan Corp.
Thursday, Feb. 16, at 9:30 a.m. President Johnsen will present the university’s FY18 operating budget to the Senate Finance Committee. This is the first Senate Finance hearing on the university’s budget.
Thursday, Feb. 16, at noon President Johnsen will give his annual State of the University address at the Hangar on the Wharf ballroom in Juneau. The event is part of the Alaska Chamber and the Juneau Chamber’s Business Roundtable lunch series. Doors open at 11:30 a.m., and the program begins at noon . Video and transcript of the address will be posted at http://www.alaska.edu/pres/sou
Thursday, Feb. 16, at 1:30 p.m. Dan White, vice president for academic affairs and research, will be part of a Senate Labor and Commerce Committee hearing on economic innovation. The hearing is being held in conjunction with the Juneau Economic Development Council’s Innovation Summit in Juneau this week: http://jedc.org/innovation/.
Thursday, Feb. 16, at 4:30 p.m. the University of Alaska House Finance Budget Subcommittee will hold its third meeting on the university’s FY18 budget. The topics expected to be covered include the Alaska education tax credit, athletics and indirect expenditures.
*New Legislation of Interest to the UA Community:*
*HB 11* (Rep. Kawasaki) – would implement a temporary, voluntary program to allow employees enrolled in the Public Employees’ Retirement System or Teachers’ Retirement System the ability to retire up to three years early.
You can find an index of legislation we are following this session here: http://www.alaska.edu/state/
Thank you for your continued support of the University of Alaska.
For more information, contact Miles Baker at miles.baker@alaska.edu or visit www.alaska.edu/state.