Senate Joint Resolution Seeks to Protect Alaska’s Vital Tourist Industry
Sen. Therriault’s SJR 12 passes Senate State Affairs Committee

Juneau – Yesterday SJR 12 passed out of Senate State Affairs Committee after deliberation and public testimony with all committee members voting “do pass.” Sen. Gene Therriault, R-North Pole, introduced this resolution to put the legislature on record as opposing the U.S. Department of Homeland Security, Bureau of Customs and Border Protection’s proposed new interpretation of the Passenger Vessel Services Act of June 19, 1886.

The new interpretation and rule change would require all foreign-flagged cruise ships to stop at least 48 hours in foreign ports. The amount of time spent in foreign ports would have to equal more than 50 percent of the total time spent in U.S. ports of call.

“This proposed rule change could have a devastating impact on the economies of coastal and inland communities who are visited each year by cruise ship passengers,” Therriault said.

All of the larger cruise ships that visit Alaska are foreign flag ships and those that start and end their voyage in a U.S. port would be affected by the rule change.

“The rule change could force cruise ship operators to reduce the number of cruise ship stops in Alaska and the length of time those ships stay in ports of call, and possibly force them to eliminate visits to some Alaskan ports altogether,” Therriault explained.

According to the Department of Commerce, Community & Economic Development about 158 voyages to Alaska with roughly 349,000 passengers would be affected by the change. That means a potential loss of about $222 million in passenger spending and $17.5 million in cruise ship passenger taxes. Corporate and gambling taxes paid to the state would also decline.

“This resolution, if passed by the house and senate, would put the legislature formally on record as opposing a rule change that would be detrimental to a key industry in our state,” Therriault said. “The tourism industry provides approximately 40,000 jobs and significant revenue to many Alaskan-owned and operated business. We need to present a united voice and protect this vital industry in Alaska.”

The resolution opposes the rule change and alternatively requests that Alaska be deemed exempt from the rule if it should become law.

Senate Minority Republicans Call for Responsible Criteria for Capital Spending

Juneau – Today Sen. Fred Dyson, R-Eagle River, together with the Senate Minority Caucus, presented to the press and public a comprehensive set of criteria for evaluating capital projects submitted by legislators for inclusion in the state’s capital budget.

“In the past we have asked the co-chairs of the Senate Finance Committee to develop specific criteria for capital spending and to date we have received no clear direction about spending caps and priorities for capital projects. Today we offer a comprehensive evaluation process for consideration by the legislature, the Governor and the public. We hope this will inspire new conversation about responsible and disciplined capital spending and look forward to having our criteria improved upon and utilized” said Dyson.

For four years Dyson and other conservative Republican senators have tried to interest their colleagues in developing rational and fair criteria with which to evaluate state wide capital spending. Sadly, calls for reform have been ignored as have been requests to submit a defensible, sustainable long range fiscal plan at the beginning of the legislative session rather than at the end.

Those interested in reviewing Dyson’s capital spending criteria may contact his office at 907-465-2199.

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Senator Wilken Calls for Capital Budget Reform - Presents Roadmap for Change

Juneau – Sen. Gary Wilken, R-Fairbanks, in a letter to the House and Senate Finance Committee Co-chairs, today formally requested the Finance Committees initiate three key changes to the procedure normally used to develop and pass the State’s capital budget.

“Last year the capital budget process broke down and resulted in the Governor using her veto power, leaving a blemish on the legislature, the administration, and our capital budget process.” Wilken explained. “We need a review of the current capital budget process and ultimately we need to revamp the way our State’s capital budget is built. The three changes to the process that I propose will help the legislature begin that journey.”

The three steps Wilken proposes are

1. establish clear spending limits, agreed upon by the leadership of the Senate and House of Representatives and the Governor,
2. alternate introduction of the capital budget bill each year between the House and the Senate to create a check and balance between the two bodies,
3. reclassify public dollars that do not carry a “General Fund” label, yet in practice spend like general fund dollars in the budget process, and label those funds “Alaska Funds” so they are better identified and tracked when spent.

The three changes Wilken proposes would open the process for more public scrutiny and install needed checks and balances on the system.

Senator Wilken will explain his plan in more detail and make available copies of his letter to the House and Senate Finance Committee Co-chairs at the Republican Minority Caucus press availability today at 11:00 a.m. in the Capitol Building.

Senator Wagoner’s Bill Gives Alaskans $750 Annual Credit on Home Energy Bill

Juneau – Sen. Tom Wagoner, R-Kenai, announced today that he has a sponsor substitute for Senate Bill 217 that will be introduced in the Senate on Friday. The new language in the bill provides every home owner and renter in Alaska a $750 annual credit on their residential electric bill - or $62.50 a month.

“Energy prices are soaring and Alaskan’s need some relief.” Wagoner said. “In addition to provided that relief, my bill goes a step further and sets up the Alaska Energy Council, which will be tasked with preparing an energy plan to address residential, municipal, and rural community energy delivery and needs in the years to come.”

The relief afforded under the bill, SB 217, also called the Alaska Power Cost Reduction Program, will take affect only when oil and gas prices reach the level where the state’s ACES tax progressivity is triggered, about $60 per barrel, and stays at that level for at least 12 consecutive months.

“The reason we had the $750 energy credit kick in when oil and gas prices are high is because that’s when utility costs start to rise and when the Alaskan people most need a break. That is also when the state can most afford to help out residents because state revenues will get a boost from ACES progressivity tax.”

“Let’s use the tax money we get from high oil and gas prices to reduce the negative affects of those high prices” Wagoner explained.

Senate Republican Minority Endorses Use of Pension Obligation Bonds

Juneau – The Senate Republican Minority today united in their support of paying down the State of Alaska’s mounting retirement and pension system debt using a combination of pension obligations bonds and cash.

Pension obligation bonds, also referred to as “POBs,” are issued by a state or municipality to help the government pay down its obligation to a pension and retirement system. In Alaska that debt has reached a staggering $8.6 billion.

“The State of Alaska Department of Revenue has shown that a mixture of cash from our surplus and POB arbitrage is a way to reduce future general fund requirements for our pension obligation for the next 25 years. We should have the courage to spend some of our available cash and incur positive debt.” Sen. Gary Wilken, R-Fairbanks said.

The long term savings would be enjoyed by both the state and municipalities because both pay into the retirement fund for employees who are part of the PERS/TRS system.

The State of Alaska’s Constitution mandates that the State’s PERS/TRS benefits be paid to all eligible state and municipal workers. “This is a debt that cannot be avoided” Sen. Gene Therriault, R-North Pole, explained. “What we are endorsing is not unlike what any one of my constituents might do when refinancing a home. You first look for a mortgage with a better interest rate, pay down as much as you can on the previous debt in cash, and then refinance the remaining balance with a lower interest loan. That’s exactly what we’re endorsing here.”

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Bill Provides Optional Municipal Property Tax Exemption
Sen. Therriault’s SB 204 passes Senate Community & Regional Affairs Committee

Juneau — A bill providing municipalities the option of granting a partial or whole property tax exemption to widows or widowers of members of the United States’ Armed Forces killed during combat operations moved from the Senate Community & Regional Affairs Committee on Tuesday.

“The bill advanced by the C&RA committee will give municipalities the discretion to provide some financial relief to families of fallen soldiers as well as offer a token of appreciation from the citizens of Alaska,” said bill sponsor Sen. Gene Therriault, R-North Pole.

Senate Bill 204 honors the sacrifices made by members of the armed services and their families while protecting the Untied States from foreign aggression and also gives deference to the economic and demographic diversity of Alaskan communities by allowing municipalities the discretion to shape and opt-in to the property tax exemption.

To qualify for the exemption, SB 204 requires the widow or widower to be a permanent Alaska resident and for the deceased to have been eligible for hostile fire or imminent danger pay, and to have died within 90 days of sustaining combat related injuries.

SB 204 now awaits a hearing in the Senate Finance Committee.