Senate Majority Declines Republican Caucus’ Challenge to Save $2.6 Billion of Alaska’s Windfall

Juneau – Sen. Gene Therriault, R-North Pole introduced an amendment on the Senate floor yesterday during the debate on the state’s FY 09 operating budget that would have bolstered savings and paid down debt by $2.6 billion.

“Today the Legislature faces record breaking surpluses,” Sen. Therriault said. “Rather than spend this new flood of money we challenged the Senate to save funds for future generations to use for future state budgets. Regrettably they refused the challenge saying it would be fiscally irresponsible.”

Although we are currently experiencing surplus revenues we continue to be advised by economists that we should be saving more in anticipation of deficits in the near future.

The Senate voted against the amendment by a vote of 12 nays to 6 yeas. Sen. Fred Dyson, R – Eagle River, Sen. Tom Wagoner, R- Kenai, Sen. Con Bunde, R – Anchorage and Sen. Gary Wilken, R – Fairbanks, co-sponsored the amendment.

Therriault’s amendment to the operating budget would have set aside $1.9 billion of the projected FY 09 oil tax revenue and deposit it into the constitutional budget reserve, a long term state savings account. This fund has been in existence for thirteen years. Over the last even years the Legislature has borrowed $5.2 billion dollars from the CBR. The Legislature is constitutionally required to repay those funds. The CBR earns considerably more in interest than other Alaska short-term savings accounts.

Therriault introduced a separate amendment that would have appropriated $700 million of the current year’s surplus to pay down the state’s obligation to the Teachers’ Retirement System. By making this deposit the state would have realized an additional savings of $46 million dollars. The Senate voted against this amendment 13 nays to 5 yeas.

“The debt to the CBR is constitutionally unavoidable and must be paid down.” Sen. Con Bunde, R-Anchorage, said. “Most Alaskans realize that in times of surplus it is wise to pay down debt.”

Senate Joint Resolution Seeks to Protect Alaska’s Vital Tourist Industry – Heads to Governor for Signature

Juneau – The Alaska House of Representatives unanimously passed SJR 12 today.  Having passed both the House and Senate, the joint resolution now goes to Governor Sarah Palin for signature.

Sen. Gene Therriault, R – North Pole, introduced the resolution to put the legislature on record as opposing a U.S. Department of Homeland Security rule change that would require all foreign-flagged cruise ships to stop at least 48 hours in foreign ports.  Under the new rule, 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.

“The rule change could force cruise ship operators to reduce the number of stops in Alaskan ports and the length of time they stay in port, possibly even force them to eliminate visits to some Alaskan ports altogether,” Therriault said.  “This could have a devastating impact on the economies of both coastal and inland communities who are visited each year by cruise ship passengers.”

According to the Department of Commerce, Community & Economic Development about 158 voyages to Alaska carrying 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 puts 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 businesses.  With the unanimous support of both the House and Senate, this joint resolution sends a powerful message.”

The resolution opposes the rule change and alternatively requests that Alaska be deemed exempt from the rule if it is ultimately adopted.

Rep. Bill Thomas, R – Haines, introduced and spoke in favor of SJR 12 on the House floor.

“I want to thank Rep. Thomas, for an excellent job on the floor of the House today describing the impact of this regulation on the many cruise ships that visit Alaska each year and the need for the federal government to reconsider this regulation,” Senator Therriault said.

Once signed by the governor, the joint resolution will be sent to U.S. Secretary of Homeland Security, Michael Chertoff; Commissioner of the U.S. Bureau of Customs and Border Protection, W. Ralph Basham; and U.S. Sen. Ted Stevens,  U.S. Sen. Lisa Murkowski, and U.S. Rep. Don Young.

Senator Dyson Presents Economist’s Report
Calls for Record Breaking Savings to Match Record Breaking Revenue

Juneau – Sen. Fred Dyson, R – Eagle River, presented a report at the Senate Republican Caucus press availability today that was prepared by Dr. Scott Goldsmith, an economist and director of the Institute of Social and Economic Research.

“We’ve been asking thoughtful and knowledgeable people around the state for their opinion about what we should be doing with this record breaking revenue year, and specifically how much Alaska should have in its rainy day fund,” Dyson said.  “Dr. Goldsmith responded with a thorough and thoughtful answer.  I’m presenting his paper in the hope that his analysis will give guidance to our colleagues as they move through the process of considering the state’s capital and operating expenses for the coming year.”

The state’s capital and operating budgets are under consideration this week and next in house and senate committee hearings.  Senator Dyson, a member of the Senate Finance Committee, asked for the Goldsmith study.

“For years Alaskans have been asking us for a long term fiscal plan,” Dyson said.  “The general consensus is that Alaska will experience a deficit before it begins to enjoy a revenue stream from the gas line.  We need a plan that imposes rational restraints on spending and encourages substantial savings to assist us through those lean years.”

Every member of the Senate Republican Caucus has either introduced or co-sponsored a bill addressing this citizen request for a rational fiscal plan that includes spending caps and savings.  All but one of these bills was introduced in 2007.  All are still being held in the Senate Finance Committee.

Issuance of the Goldsmith opinion came out in the same month as Governing, a magazine published by Congressional Quarterly Inc., Saint Petersburg, Florida.  The magazine contains a report, “Governing: Measuring Performance; the State Management Report Card for 2008,”  that gives the State of Alaska a grade of C- in the area of money, a category that includes: long-term outlook, budget process, structural balance, contracting and purchasing, and financial controls and reporting.  Both documents were presented to the public and press at today’s press availability.

Senate Republican Caucus Reacts to News of Record Breaking FY 2008 Oil Revenues – Challenges Legislature to Increase Savings for Alaska’s Future

Juneau – Today the Senate Republican Caucus reacted to the Alaska Department of Revenue’s news that the General Purpose Unrestricted Revenue for FY 2008 is projected to be a record breaking $8.5 Million.

“This year’s projected revenue is almost 30% higher than last year,” Sen. Gary Wilken, R – Fairbanks, said. “With this dramatic increase in revenue comes an equally dramatic duty to exercise self-restraint in spending and to save for future generations of Alaskans.”

Repeatedly during the 25th Legislature, the Senate Republican Caucus has called for the creation of a long term fiscal plan that includes a commitment to saving. This year in particular, they stepped up the call.

“During the ACES debate last fall, we proposed that a mechanism be put into place to prompt future legislatures to set aside sizeable portions of the increase in oil tax revenue under the new law – particularly revenue generated by the progressivity component of the tax,” Sen. Gene Therriault, R- North Pole, said.

“While the $3.6 billion set aside in SB 256 sounds good, it is a fraction of what we should deposit into Alaska’s savings accounts in a banner year like this one,” Wilken said. “With Friday’s revenue forecast, the legislature has the financial ability to set aside far more money than $3.6 billion.”

The Senate Republican Caucus is challenging the legislature to set aside an additional $3.6 billion of surplus as savings or through a combination of deposits to savings and debt pay down.

“The Legislative Finance Division assures us that this amount is justifiable if the operating and capital budgets stay reasonably contained, or even reduced from the amount spent last year,” Therriault said.

The Senate Republican Caucus’ position is bolstered by a recent Institute of Social and Economic Research opinion. Dr. Goldsmith, an economist and director of ISER, suggests that Alaska should redouble its efforts to save money now and reduce the risk that future generations will be forced to meet Alaska’s operating and capital needs by imposing income tax, sales tax and dipping into the permanent fund earnings reserve account.

“Dr. Goldsmith suggests that we view the increase in revenues over the past few years not as a trend that will continue, but as a windfall,” Sen. Tom Wagoner, R- Kenai, said. “The best strategy for dealing with a windfall is to put as much as possible in the bank and spread the spending out over a long period of time. It’s prudent, it protects future generations. Let’s step up to the plate and do what’s right.”

“With the unpredictability of our oil and gas revenue stream, the revenues we enjoy now might not be enjoyed by future generations,” Sen. Con Bunde, R- Anchorage, said. “It’s not a question of whether we will face sizeable deficits in the future, it’s a question of when; now is the time to save.”

“If we discover in future years that this windfall is a permanent and predictable increase in income, then we can modify the savings plan,” Therriault said. “But for now it would be robbing from future Alaskan’s to spend our non-renewable resource dollars without a plan. A better public policy is to agree that the petroleum wealth of the state should be shared equitably among today’s and tomorrow’s Alaskans.”

# # #

Senator Therriault’s bill allows Lions Club and other non-profits to provide Alaskan’s with used glasses
SB 149 passes senate unanimously

Juneau – Today the Alaska State Senate joined together and passed SB 149 unanimously.  Sen. Gene Therriault, R – North Pole, introduced this legislation at the request of the Lions Club of Alaska.

“This new law allows an important need to be met.”  Therriault explained.  “The Lion’s Club devotes a tremendous amount of volunteer time and resources to gathering, repairing and providing used eye glasses to people in third world countries;  this new law allows them to continue their good work to serve those in need right here in Alaska.”

Under the new law, a non-profit can apply to be certified by the state to safely fit any Alaskan, free of charge, with a set of used glasses.  To be fit for glasses, the Alaskan must present a prescription obtained from a licensed optometrist or physician.  The glasses provided will conform, to the greatest extent possible, to that prescription.