Connect with us

Alaska

OPINION: Alaska has made progress toward righting its financial picture

Published

on

OPINION: Alaska has made progress toward righting its financial picture


By Luke Welles

Updated: 1 hour ago Published: 1 hour ago

The State of Alaska’s financial outlook is not entirely negative. Serving as a volunteer commissioner on the State of Alaska Municipal Bond Bank since 2008, I have engaged with all major credit rating agencies, including Fitch, S&P, Moody’s and Kroll. The primary objective of these interactions has been to secure the most favorable and realistic credit ratings possible. Achieving this goal is crucial, as it directly contributes to minimizing the interest rates on general obligation bonded debt. This financial prudence directly benefits Alaskans, particularly those in communities and rural health entities that utilize the bond bank.

Advertisement

Moreover, a strong credit rating does more than just lower interest rates. It offers a thoroughly analyzed perspective on the future economic outlook of the State of Alaska. This analysis is a valuable tool for investors considering the allocation of substantial capital investments in state projects. Thus, maintaining a good credit rating is a strategic measure that underpins both fiscal responsibility and economic development in Alaska.

I’m concerned about the perception of our state’s finances and economic outlook due to static, mandated fiscal reports like the 10-year forecast. A significant source of the problem lies in the rigidity of a few of our statutes mandating static reports which do not consider reality. Alaska Statute 37.07.020(b)(2) requires that the state “must balance sources and uses of funds held while providing for essential state services and protecting the economic stability of the state” which is the guiding light for the 10-year forecast. Also required, AS 37.13.145(b) states that: “At the end of each fiscal year, the corporation shall transfer from the earnings reserve account to the dividend fund established under AS 43.23.045 , 50% of the income available for distribution under AS 37.13.140 ” which drives the projected “statutorily defined” permanent fund distribution in the 10-year forecast. The result is a significantly misleading 10-year forecast; especially given what has occurred in the past decade.

In 2016, an impactful decision by Gov. Bill Walker to veto half of the funds allocated for the Permanent Fund dividend, which had been approved by the state Legislature, led to significant legal and fiscal implications. Sen. Bill Wielechowski initiated legal action, challenging the veto on the grounds that it contravened the constitutional amendment which established the Permanent Fund. He contended that funds dedicated to the Permanent Fund dividend should be immune to gubernatorial veto. However, Anchorage Superior Court Judge William Morse upheld the governor’s veto, stating that any alteration to the governor’s veto power necessitates explicit and formal legislative action.

Without a statute change, the governor is mandated to include a “full” dividend in the state budget forecasts, a requirement that constrains the presentation of a balanced budget meeting the requirements of AS 37.07.020. It is, therefore, prudent for the Legislature to consider amending the statutory language governing the Permanent Fund earnings distribution language. Such an amendment would grant the governor greater leeway to formulate more realistic budget forecasts that are aligned with projected balanced budgets. This change is crucial for fostering transparent communication with the public regarding the state’s financial outlook, considering the necessity for the governor and legislators to balance actual income against expenditures.

The current fiscal situation of the State of Alaska must be realistically presented to the public in context of the past decade. The state’s 2013 unrestricted operating and capital budget stood at $7.9 billion, which declined to $4.5 billion in 2017 and 2018, and is estimated to be approximately $5.2 billion by 2025. This represents a significant decrease of 34% in unrestricted revenue over the past decade. Consequently, the state has struggled to meet its operational needs as per AS 37.07.020(b)(2) and unable to disburse a “full” dividend in line with current statute language (AS 37.13.140).

Advertisement

The reality is that the past Legislatures and governors have ultimately made significant cuts in the past decade and adopted the percentage-of-market-value, or POMV, rule in 2018 and implementing it 2019, with a 5.25% subject to appropriation draw through 2021 and 5% thereafter. As a result, dependence on the projected petroleum revenues has decreased from more than 80% of the state’s budget in the past to 16% of the state’s projected 2025 total budget and 33% of the state’s 2025 unrestricted general fund budget. POMV has proven to be very effective in stabilizing state revenues in the past five years and combining the earnings reserve account with the corpus account with an “up to” draw of 5% for future legislators will add even more stability for Alaska’s fiscal future.

The State of Alaska’s current financial situation reflects a stable position, attributable in part to substantial budgetary reductions and the imposition of a cap on the growth of state agency expenses at less than 2% per year. This fiscal discipline is evident when comparing the fiscal year 2019 state agencies’ expenditure of $3.95 billion with the projected budget for fiscal year 2025, which stands at $4.32 billion. Additionally, the state’s fiscal health is bolstered by the full funding of Public Employees’ Retirement System and Teachers’ Retirement System obligations.

Moreover, the state’s total debt service to maturity, inclusive of school debt reimbursement, is less than $1.5 billion. Notably, more than 71% of this debt is scheduled to be repaid within the next 10 years. This scenario underscores the state’s effective management of its financial obligations and its commitment to maintaining a robust fiscal framework.

Fiscal debates and discussions about expense priorities are vital components of good governance. Annual discussions are key to creating accurate, realistic, and transparent financial reports and projections. It is important that the fiscal documents conform to both the wording and the spirit of state statutes. My recommendation is for legislators to amend statutes related to the Permanent Fund dividend distribution during the current session and to enhance the accuracy of the 10-year forecast with associated financial reports.

Luke Welles is the chairman of the Alaska Municipal Bond Bank Authority’s board of directors. He is the Senior Director of Business Development & Strategic Partnerships for the Alaska Native Tribal Health Consortium. Prior to this position, Welles served as Vice President of Finance for the Arctic Slope Native Association.

Advertisement

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.





Source link

Alaska

‘Ticking time bomb’: Extreme snowfall fuels avalanche danger around Haines

Published

on

‘Ticking time bomb’: Extreme snowfall fuels avalanche danger around Haines


Avalanche professionals are warning backcountry adventurers to stay out of risky terrain after snow slammed the Upper Lynn Canal in late December.

National Weather Service data shows the storm dumped at least 44 inches of snow in Haines, making it the sixth snowiest five-day period in more than two decades. Other reports documented closer to six or seven feet.

“It was definitely one of the higher snowfalls you’ve gotten in five days, pretty much out of all your time that the station’s been there,” said Juneau-based meteorologist Edward Liske.

The dumping has created a risky situation in the backcountry that warrants extreme caution, said Jeff Moskowitz, the director of the Haines Avalanche Center.

Advertisement

His main message: “Avoid being in or around avalanche terrain.”

Earlier this week, Moskowitz dug a snow pit in town – in front of Haines’ historic Fort Seward – that confirmed his assessment. Standing chest-deep in the pit, he pointed out layers of snow stacked on top of each other, each representing a different storm.

There was a somewhat fluffy layer on top, from the snowfall in early January. Below that, there was a roughly three-foot-deep layer that was more compact, from the late December storm.

And then there was a thin, feeble layer of snow just inches from the ground that crumbled like sugar when Moskowitz ran his hand through it. That snow was on the ground before the big storm – it’s the layer that could collapse and trigger an avalanche under the weight of more precipitation, snowmachines or humans.

“We have about a meter of really strong snow just sitting over this sugar,” Moskowitz said, calling it a “dangerous combination for avalanches.”

Advertisement
Jeff Moskowitz directs the Haines Avalanche Center, the Chilkat Valley’s primary source of avalanche information.

Starting Dec. 27, the situation prompted the center to issue warnings about high avalanche risk in the Haines area. Moskowitz said people should stay off slopes that are greater than 30 degrees – and avoid traveling beneath them.

“It’s just a tricky situation, because there’s lots of snow, and we want to go play,” he said. “But we still have this strong-over-weak layering in most places.”

In some places, he said, the weak layer may be buried so deep that a human or snowmachine wouldn’t trigger it. But in shallower areas, like near trees or rocks. the layer would be closer to the surface and more likely to trigger an avalanche.

“People could ride that slope numerous times until one person finds that weak spot,” he said.

The deluge has stopped for now. But the situation could get worse before it gets better, as temperatures rise and the top layer of snow consolidates into a heavier, thicker slab. New precipitation or other conditions could trigger a natural avalanche cycle, wiping that weak layer out.

Advertisement

“Otherwise, it’s a little bit like a ticking time bomb,” Moskowitz said.

Haines Avalanche Center

The Haines Avalanche Center is a nonprofit and the main source of avalanche information in the Chilkat Valley, which draws backcountry adventurers from around the world. Moskowitz emphasized the importance of donations, grants and borough funding to make that work possible.

In the past, the Haines Borough has asked nonprofits to apply for funding from a $100,000 bucket. But Haines Mayor Tom Morphet said that, amid a steep budget deficit, the assembly discontinued that grant process for fiscal year 2026, which runs through June.

That has meant less funding than usual for the Avalanche Center, which has just three part-time employees, including Moskowitz.

Advertisement

“Less funding means less staff time,” Moskowitz said. “And staff time means that locals who are avalanche professionals and have certifications are out there, digging in the snow, making assessments, posting that information publicly.”

The center posts a general avalanche information product every week, plus a weather forecast and season summary. They also issue advisories when avalanche danger is high, including three days in a row in late December.

But the center does not currently have the funding or staff capacity to consistently publish advisories when avalanche risk is low, moderate or considerable.

“What we don’t want, is that there’s an accident that sparks the public interest in supporting the Avalanche Center,” Moskowitz said. “We just need to maintain the services we provide and just keep it going year after year after year.”

Morphet, the mayor, said the borough and assembly are “acutely aware” of the center’s importance.

Advertisement

Moskowitz said people who recreate in the backcountry can help by paying close attention to their surroundings – and he urged them to send in their observations online.

That could mean details about a human-triggered or natural avalanche, about where the sun has hit the mountains on a particular day, or an observation that feathery crystals – known as surface hoar – have started forming on the snow’s surface.

“There’s very little information that we’re not going to find useful,” Moskowitz said. “All of that is very valuable, and it helps to inform this bigger picture.”



Source link

Advertisement
Continue Reading

Alaska

Alaska delegation mixed on Venezuela capture legality, day before presidential war powers vote

Published

on

Alaska delegation mixed on Venezuela capture legality, day before presidential war powers vote


ANCHORAGE, Alaska (KTUU) – Alaska’s congressional delegation had mixed reactions Wednesday on the legality of the Trump administration’s actions in Venezuela over the weekend, just a day before they’re set to vote on a bill ending “hostilities” in Venezuela.

It comes days after former Venezuelan Nicolás Maduro was captured by American forces and brought to the United States in handcuffs to face federal drug trafficking charges.

All U.S. Senators were to be briefed by the administration members at 10 a.m. ET Wednesday, including Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth, according to CBS News.

Spokespersons for Alaska Sens. Lisa Murkowski, R-Alaska, and Dan Sullivan, R-Alaska, say they were at that meeting, but from their responses, the two shared different takeaways.

Advertisement

Sullivan, who previously commended the Trump administration for the operation in Venezuela, told KDLL after his briefing that the next steps in Venezuela would be done in three phases.

“One is just stabilization. They don’t want chaos,” he said.

“The second is to have an economic recovery phase … and then finally, the third phase is a transition to conduct free and fair elections and perhaps install the real winner of the 2024 election there, which was not Maduro.”

Murkowski spokesperson Joe Plesha said she had similar takeaways to Sullivan on the ousting of Maduro, but still held concerns on the legality.

“Nicolás Maduro is a dictator who led a brutally oppressive regime, and Venezuela and the world are better places without him in power,” Plesha said in a statement Wednesday. “While [Murkowski] continues to question the legal and policy framework that led to the military operation, the bigger question now is what happens next.”

Advertisement

Thursday, the Senate will decide what happens next when they vote on a war powers resolution which would require congressional approval to “be engaged in hostilities within or against Venezuela,” and directs the president to terminate the use of armed forces against Venezuela, “unless explicitly authorized by a declaration of war or specific authorization for use of military force.”

Several House leaders have also received a briefing from the administration according to CBS News. A spokesperson for Rep. Nick Begich, R-Alaska, said he received a House briefing and left believing the actions taken by the administration were legal.

“The information provided in today’s classified House briefing further confirmed that the actions taken by the Administration to obtain Maduro were necessary, time-dependent, and justified; and I applaud our military and the intelligence community for their exceptional work in executing this operation,” Begich said in a statement.

Looming vote

Sen. Tim Kaine, D-VA, authored the war powers resolution scheduled for debate Thursday at 11 a.m. ET — 7 a.m. AKST.

It’s a resolution which was one of the biggest topics of discussion on the chamber floors Wednesday.

Advertisement

Sen. Rand Paul, R-KY, said on the Senate floor Wednesdya that the actions taken by the administration were an “act of war,” and the president’s capture of Maduro violated the checks and balances established in the constitution, ending his remarks by encouraging his colleagues to vote in favor of the resolution.

“The constitution is clear,” Paul said. “Only Congress can declare a war.”

If all Democrats and independents vote for the Kaine resolution, and Paul keeps to his support, the bill will need three more votes to pass. If there is a tie, the vice president is the deciding vote.

“It’s as if a magical dust of soma has descended through the ventilation systems of congressional office buildings,” Paul continued Wednesday, referring to a particular type of muscle relaxant.

“Vague faces in permanent smiles and obedient applause indicate the degree that the majority party has lost its grip and have become eunuchs in the thrall of presidential domination.”

Advertisement

Legality of actions under scrutiny

U.S. forces arrested Maduro and his wife, Cilia Flores, from their Caracas home in an overnight operation early Saturday morning, Alaska time. Strikes accompanying the capture killed about 75 people, including military personnel and civilians, according to U.S. government officials granted anonymity by The Washington Post.

Maduro pleaded not guilty Monday in a New York courtroom to drug trafficking charges that include leading the “Cartel of the Suns,” a narco-trafficking organization comprised of high-ranking Venezuelan officials. The U.S. offered a $50 million reward for information leading to his capture.

Whether the U.S. was legally able to capture Maduro under both domestic and international law has been scrutinized in the halls of Congress. Members of the administration, like Secretary of State Marco Rubio, have been open in defending what they say was a law enforcement operation carrying out an arrest warrant, The Hill reports. Lawmakers, like Paul or Sen. Chuck Schumer, D-NY, say the actions were an act of war and a violation of the constitution.

While the president controls the military as commander in chief, Congress constitutionally has the power to declare wars. Congressional Democrats have accused Trump of skirting the Constitution by not seeking congressional authorization before the operation.

Murkowski has not outright condemned or supported the actions taken by the administration, saying in a statement she was hopeful the world was safer without Maduro in power, but the way the operation was handled is “important.”

Advertisement

Sullivan, on the other hand, commended Trump and those involved in the operation for forcing Maduro to “face American justice,” in an online statement.

Begich spokesperson Silver Prout told Alaska’s News Source Monday the Congressman believed the operation was “a lawful execution of a valid U.S. arrest warrant on longstanding criminal charges against Nicolás Maduro.”

The legality of U.S. military actions against Venezuela has taken significant focus in Washington over the past several months, highlighted by a “double-tap” strike — a second attack on the same target after an initial strike — which the Washington Post reported killed people clinging to the wreckage of a vessel after the military already struck it. The White House has confirmed the follow-up attack.

Advertisement

Sullivan, who saw classified video of the strike, previously told Alaska’s News Source in December he believed actions taken by the U.S. did not violate international law.

“I support them doing it, but they have to get it right,” he said. “I think so far they’re getting it right.”

Murkowski, who has not seen the video, previously said at an Anchorage press event the takeaways on that strike’s legality seem to be divided along party lines.

“I spoke to a colleague who is on the Intelligence Committee, a Republican, and I spoke to a colleague, a Democrat, who is on the Senate Armed Services Committee … their recollection or their retelling of what they saw [was] vastly different.”

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

Advertisement





Source link

Continue Reading

Alaska

National Native helpline for domestic violence and sexual assault to open Alaska-specific service

Published

on

National Native helpline for domestic violence and sexual assault to open Alaska-specific service


A national support line for Native survivors of domestic violence and sexual assault has begun work to launch an Alaska-specific service. Strong Hearts Native Helpline is a Native-led nonprofit that offers 24-hour, seven-day-a-week support for anonymous and confidential calls from people who have experienced domestic violence or sexual assault. The line is staffed by Native […]



Source link

Continue Reading
Advertisement

Trending