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Alaska Senate eyes $100 million-plus in cuts in draft budget

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Alaska Senate eyes 0 million-plus in cuts in draft budget


JUNEAU — The Alaska Senate is eyeing over $100 million in budget cuts, but a more than $85 million shortfall remains in the Senate’s draft spending plan.

The Senate Finance Committee on Thursday unveiled its new version of the budget for the fiscal year that starts July 1. The spending plan has a roughly $1,400 Permanent Fund dividend, and plans to pay a $172 million increase in school funding, closely matching what was appropriated last year for schools.

Legislators are grappling this year with a dire fiscal outlook due to diminished oil revenue. The Legislature is facing a $680 million-plus deficit over two fiscal years based on status quo spending.

Lawmakers say they have few good options to balance the budget.

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Leadership of the Democrat-dominated Senate majority has opposed drawing from savings to fill the projected deficit for the next fiscal year. Senators have instead introduced new revenue measures, including oil tax hikes, to balance the budget. But the House has shown little interest in those proposals.

Bethel Democratic Sen. Lyman Hoffman, who manages the Senate’s operating budget, sent a memorandum to senators in March directing them to look for cuts and not to fund new programs.

Additionally, Hoffman said that the Senate should reject additions to the baseline budget proposed by Gov. Mike Dunleavy, except for Medicaid spending. Over $60 million in requests from the Dunleavy administration were rejected by Senate subcommittees, Hoffman’s staff said Thursday.

The Senate is calling for over $100 million in agency reductions in its draft budget:

• After years of increases, the Alaska Department of Corrections would see an almost $32 million cut from the spending plan proposed by the Dunleavy administration for the agency. Reductions include a $7.5 million cut to Spring Creek Correctional Center, with the intention to close a housing unit.

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• Almost $18 million would be cut from the Alaska Permanent Fund Corp. The fund provides over 50% of state revenue each year. Senators are calling for a 10% reduction in staff not involved in making investment decisions for the fund.

• The Alaska Department of Health would see a $14 million cut, including $4 million cut from a new virtual call center used to pay Alaskans state benefits.

• The Alaska Department of Public Safety would see an almost $12 million budget cut. Dunleavy had proposed reopening an Alaska State Troopers post in Talkeetna, but that was rejected in the Senate’s draft budget along with additional Village Public Safety Officers in the Arctic.

• The University of Alaska would see an almost $10 million cut, largely from rejecting salary increases that are not part of labor agreements. Almost $8 million would be cut from the Alaska Department of Transportation and Public Facilities, largely by not replacing state vehicles as quickly as planned.

Jason Brune, chair of the Permanent Fund’s board, said trustees are concerned the proposed budget reductions could impact the corporation’s ability to “maximize” the value of its investments. But Brune said trustees recognize the budget process is ongoing.

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“There is an opportunity to work together with the Legislature to ensure that optimal funding is available for the investment management work we do for the Permanent Fund and the other funds entrusted to our care,” he said.

Additionally, the Senate is looking to make smaller budget reductions that could prove contentious.

Last year, the Legislature voted to defund the Alaska Gasline Development Corp. unless it secured financing for a long-sought gas pipeline. This year, the Senate is planning to cut $2.5 million from the Alaska Gasline Development Corp.’s budget with plans that the agency be largely funded by private sources.

Frank Richards, president of the AGDC, told lawmakers on Wednesday that if that cut is approved, the agency would continue representing the state’s interests in the planned pipeline with “very few assets.”

“It would make it a challenge to be able to perform the functions to properly act as a minority owner in a major, significant project development,” he said.

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Senators report making tough budget decisions during the subcommittee process.

Juneau Democratic Sen. Jesse Kiehl, a member of the Senate Finance Committee, warned earlier in the month that the Senate’s “austere” budget would still see a sizable fiscal shortfall.

The Senate’s draft budget has the same $1,400 Permanent Fund dividend as the House. But in general, the Senate’s current spending plan is markedly different from the budget approved by the House earlier in the month.

The House’s operating budget advanced with most of Dunleavy’s budget requests intact, along with spending added by legislators. The House’s budget advanced with a projected $259 million deficit for the next fiscal year as Republican minority members complained that the Democrat-dominated House majority had done enough to cut the budget.

The House included a one-time, $253 million school funding increase in case a permanent $1,000 boost in per-student spending is not approved this year. The Legislature on Tuesday failed to override Dunleavy’s veto of a $1,000 Base Student Allocation increase.

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The Senate’s draft budget contains a $172 million one-time school funding increase. That would roughly match the same school funding boost the Legislature approved last year.

Additionally, the Senate rejected an unallocated $79 million cut to the budget approved by the House. That would have directed Dunleavy to reduce the budget from wherever he chooses. But the Legislature’s attorneys warned that move would likely be unconstitutional.

Earlier in the month, the Senate advanced a stripped-down capital budget. The spending plan, which funds infrastructure and maintenance projects, would draw $120 million less from the state treasury than the capital budget proposed by Dunleavy.

Despite the Senate’s planned budget reductions, a more than $85 million projected deficit remains for the next fiscal year. That could balloon as labor agreements are finalized with state agencies, lawmakers said.

Hoffman concluded Thursday’s Senate Finance Committee meeting by telling members that “there still has to be work that needs to be done on this budget in order to have it balanced.”

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“We are still in deficit mode,” he added.

The regular legislative session must end by midnight of May 21.





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Rivers Turn Bright Orange in Alaska

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Rivers Turn Bright Orange in Alaska


Josh Koch / U.S. Geological Survey

Some of Alaska’s scenic rivers and streams look downright apocalyptic this year because they turned a flagrant orange color — but it’s not due to local pollution, according to scientists at the National Oceanic and Atmospheric Administration (NOAA).

In actuality, the orange tinted water is rust, released as the frozen ground in Alaska thaws out due to unchecked greenhouse gasses driving global warming. And it’s leaking into the state’s waterways, according to NOAA’s annual report on the Arctic region, where it’s posing a danger to local wildlife, residents and commercial fisheries.

The day-glo rivers are also a bright orange flag that the Arctic is warming faster than the rest of the world. The massive defrosting is also anticipated to increase sea levels and screw up weather patterns, according to scientists who talked to NPR.

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“When the Arctic thaws and warms, it’s having an impact on the global climate,” Matthew Druckenmiller, lead author of the report and senior scientist with the Boulder, Colorado-based National Snow and Ice Data Center, told the broadcaster.

The planet is already showing signs of distress from global warming, such as large-scale forest fires and extreme summer temperatures outside the Arctic, which Druckenmiller described as a giant fridge for the planet.

“The Arctic is warming several times faster than Earth as a whole, reshaping the northern landscapes, ecosystems, and livelihoods of Arctic peoples,” reads the NOAA report. “Also transforming are the roles the Arctic plays in the global climate, economic, and societal systems.”

Zooming back to Alaska, people started noticing the orange waterways in 2018, according to NPR.

“ We heard from people who live in the region — pilots who are often flying over, people in the national parks,”  US Geological Survey research hydrologist Josh Koch told the broadcaster.

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As temperatures heats up in the most remote parts of Alaska, permafrost — ground that usually stays continuously frozen — is melting, and that’s unlocking iron in the soil, which oxidizes from exposure to water and air, causing rivers and streams to turn orange. Surveys revealed that this contamination is far reaching, covering hundreds of miles of terrain in Alaska.

“It’s often not orange until it reaches the stream, and then all the iron and other metals can precipitate and create this iron staining,” Koch added.

It’s not clear if residents are being harmed from the polluted water, but local scientists are monitoring the situation, NPR reports.

The other problem with these rusty rivers is that they increase the acidity level in the water, according to the NOAA report, and this may harm fish like Dolly Varden char, whose juvenile offspring have experienced a sharp decrease in numbers most likely due to iron in its aquatic habitat. And that’s pretty bad for everybody in Alaska.

“The food chain is connected to the lives of people living in the Arctic,” Druckenmiller said.

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More on climate change: Melting Glacier in Alaska Floods State Capital



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Winter Solstice celebration takes over Cuddy Park

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Winter Solstice celebration takes over Cuddy Park


ANCHORAGE, Alaska (KTUU) – On the darkest weekend of the year, Alaskans gathered at Cuddy Park to mark the moments before daylight finally begins its slow return.

To celebrate, the Municipality held its annual winter solstice festival, inviting everyone for an evening of cold-weather fun.

”Some of the highlights, of course, are ice skating at the oval right over there, some holiday music, we have Santa and Mrs. Claus wandering around, we are going to have some reindeer here,” Anchorage Parks and Recs Community Engagement Coordinator, Ellen Devine, said.

In addition to seeing reindeer, folks could take a ride around the park in a horse-drawn carriage or sit down and watch a classic holiday film provided by the Alaska Bookmobile.

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Despite the frigid temperature, people made their way down to the park to partake in some festive cheer.

“It is my first time in Anchorage,” attendee Stefan Grigoras said. “It’s beautiful, it is a little bit cold, I’m not going to lie, but I want to take a picture with the reindeer.”

Grigoras, like many, took part in the free hot chocolate and took his photo with St. Nick and Mrs. Claus, who were seen wandering around bringing joy to all.

“[The kids] get so excited and, you know, you have everything from run over and almost knock us down with hugs to not even wanting to come near us, and it’s just a fun combination of all that,” Mrs. Claus said.

Some of those kids were Logan and Keegan, who were out and about with their parents, Samantha and Trevor. The two kids asked for things that every child is sure to want.

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“A monster truck,” Logan said.

“Bingo,” Keegan said.

”Like Bluey and Bingo,” Samantha clarified for Keegan.

The young family is originally from Arkansas and is excited to be a part of a thriving community.

“I love Anchorage’s community. There’s so many community events, and especially as a young family, it makes me really excited to get together and get to know people,” Samantha said.

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As the festivities continued into the night, a familiar holiday message could be heard.

”Merry Christmas, ho, ho, ho,” the Clauses yelled!

“Merry Christmas,” Logan and Keegan said.

See a spelling or grammar error? Report it to web@ktuu.com

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Opinion: You get what you pay for — and Alaska is paying too little

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Opinion: You get what you pay for — and Alaska is paying too little


A protester holds a sign before the start of a rally held in support of the Alaska university system on Wednesday, Feb. 13, 2019, in Juneau, Alaska. (AP Photo/Becky Bohrer)

Most Alaskans, perhaps even most Americans, have a knee-jerk reaction to taxes. They affect citizens in a sensitive area — their pocketbook. Perhaps a little analysis and thought could change this normal negative reaction.

It is clear, even to the stingiest among us, that Anchorage and Alaska need more income. Our severely underfunded public schools, decreasing population — called “outmigration” these days — underfunded police force, deteriorating streets and highways, underfunded city and state park budgets, and on and on, are not going to fix themselves. We have to pay for it.

Public schools are the best example. Do you want your first grader in a classroom with 25-plus students or your intermediate composition student in a class with 35-plus students? What if the teacher needs four to five paragraphs per week per student from two such classes? Who suffers? The teacher and 70 students. It’s not rocket science — if you minimize taxes, you minimize services.

I was an English teacher in Anchorage and had students coming into my classroom at lunch for help. Why? They were ambitious. Far more students who wanted and needed help were too shy, too busy or less motivated. With smaller class sizes, those students would have gotten the help in class.

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Some Alaskans resent paying taxes that help other people’s children. They often say, “But I don’t have any kids in school!” The same attitude is heard when folks say, “The streets in our neighborhood are fine.” Taxes are not designed to help specific taxpayers; they are, or should be, designed to help the entire community. And we are a community.

As well, lots of people get real excited by sales taxes, especially those who have enough income to buy lots of stuff. They argue that, on balance, sales taxes are unfair — they are regressive. That means that individuals with less income pay a higher percent of their income than individuals with a higher income, and this is true. It is minimized by exempting some expenses — medical care, groceries and the like.

A recent opinion piece published in the Anchorage Daily News explained the disadvantages of a regressive tax. In doing so, the author made an excellent argument for using a different kind of tax.

The solution is to use an income tax. With an income tax, the regulations of the tax can prevent it from being regressive by requiring higher tax rates as individual incomes increase. Alaska is one of only eight or nine states with no state income tax. For those folks all worked up about regressive sales taxes, this is the solution.

Any tax that most folks will accept depends on people seeing themselves as part of the same community. That’s not always obvious these days — but it doesn’t change the bottom line: We still have to pay our way.

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Tom Nelson has lived in Anchorage more than 50 years. He is a retired school teacher, cross country ski coach, track coach, commercial fisherman and wilderness guide.

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