District 38 Dems React to the Devastating Cuts in Proposed State Budget

by Vicki Turner Malone 

District 38 Democrats met Wednesday evening, Feb 20, 2019, at KuC to discuss Governor Dunleavy’s proposed 2020 budget. Representative Tiffany Zulkosky made time at the beginning of the meeting via teleconference with Democrats to outline the areas most affecting rural Alaska in the proposed budget.

•Cuts to K-12 School Funding ($333 million statewide-roughly 24%)

•42% decrease in University of Alaska funding which could result in the closing of some of the rural campuses

•Reduction of state Medicaid dollars by $225 million; (Federal money would also be reduced)

•Elimination of payouts that protect public assistance after Permanent Fund payments are received. (This hold harmless law funds payments to ensure people don’t lose food stamps or benefits paid to the elderly, blind or disabled under the Adult Public Assistance and Supplemental Security programs as a result of receiving the Permanent Dividend.

•Raid on the Power Equalization Program Fund (including the 33.5 million endowment during Walker administration.) Proposing that it be paid out of unrestricted general funds most probably destabilizing the program.

•Eliminate state funding for Public Broadcasting (state funds also serve to qualify many rural stations for federal funding)

•Eliminate Tribal Assistance Program

•Cuts to Public Assistance and Adult Public Assistance Programs (over 50 million statewide)

•Large cuts to Fish & Game (1.85 million statewide)

•Reduce the number of public airports in largely rural and small communities. (Overall D.O.T cuts are 48% statewide)

•Eliminate the State Council on the Arts

•Eliminate the Health Career Scholarship Fund

•Other programs including power upgrade, bulk fuel, energy efficiency, and 911 response and many others are either eliminated or reduced.

The preceding list only highlights the proposed budget; it does not include many other cuts which will also impact this region and other cuts which will cripple other Alaskan regions. Other devastating cuts such as the elimination of the Alaska ferry service and the State’s proposal to stop sharing 50% of the raw fish taxes collected with communities throughout the State (a loss of $28 million to communities).

REACTION FROM LEGISLATURE AND ALTERNATIVE REVENUES

Following the budget review with Zulkosky, local democrats concluded, it is unlikely that the legislative branch will pass this budget as proposed. There is a lot of push back from the legislature, especially in the House, and even in the Senate majority. There are those who are questioning the rationale of some of the cuts to their own regions. What other sources of revenue could be used, they asked.

“The political reality of where we are today has caught up with us. Had we instituted some of the proposals of the Walker team, this train wreck could have been avoided,” commented Beverly Hoffman.

A couple of years ago, the Walker team proposed instituting a state income tax of 4% of the federal income tax, (80% would have been paid by the top 20% of wage earners. The Walker team also proposed capping the Permanent Dividend.

Longtime local resident, Kathy Hanson, spoke in favor of raising oil taxes referring to the oil companies, Hanson said, “They have never operated at full capacity as promised and they started eliminating positions before the ink was dry on the last agreement.”

However, this Governor has indicated strong opposition to the creation of any new state revenue in the form of restructured oil taxes or the creation of broad based taxes such as a state income tax. As a result, the budget he proposed would fully fund a statutory formula dividend, but would have dramatic cuts to programs that propel our economy in rural Alaska and across the state. Due to the recent organization of the House, and how early it is into the budget process, and negotiations that will have to happen with the Senate, the proposed size of the Permanent Fund Dividend has not yet been discussed.

In essence, Governor Dunleavy’s well-publicized opposition to introducing a state income tax, restructuring oil taxes, or capping the PFD would make passage of such proposals difficult. Dunleavy has stated many times, “The government cannot be all things to all people,” and believes Alaska’s economic woes can all be solved by massive cuts in spending.

Therefore, a legislative override would be necessary to pass any of the proposals above with the possible exception of a seasonal sales tax. Legislative override for any proposal would be very difficult especially on the Senate side.

Mike Williams, Sr. said he was very angry when he saw the budget, “If they cut Medicaid at that level, we will be attending more funerals out here,” Williams predicted.

In looking at other revenues, Williams thinks the region should look again at restoring federal funding for tribes. These funds would enable tribes to compact for educational services using federal instead of state dollars.

While many Democrats are opposed to mineral development as a source of revenue, some favor it. However, both sides agreed that the starvation diet in the proposed budget is designed to force rural Alaskans into accepting controversial mining developments.

WHAT CAN PEOPLE IN OUR REGION DO ABOUT THE BUDGET CUTS

Democrats are encouraging people throughout the region to make their stories heard. The impact of these cuts needs to be understood by everyone in the state. Letters to the editor, calling and messaging legislators, and letters and calls to the Governor’s office are ways of communicating the personal gravity of these cuts. Copies of letters and stories should be sent to our legislators, Rep. Zulkosky and Sen. Hoffman, so our legislators are aware of what is being said and can use them as needed.

Secondly, Democrats are encouraging everybody in the region to keep following the legislative process so constituents can respond in a timely way as the revised budget proposals move forward. Constituent comment will be critical if a legislative veto override becomes an option. Representative Zulkosky will be back out in Bethel within the next month for budget meetings.

Any reader who is interested in getting on an email list for future District 38 Democratic budget work sessions and updates can email Vicki Malone [email protected]

“People receiving public assistance will be affected by the higher permanent dividends. The one time per year permanent fund dividend bumps people out of the income eligibility limits and the Governor is proposing to eliminate the public assistance payments which are lost as a result of this windfall.” – Beverly Hoffman

“The cuts proposed in the Governor’s budget would have unprecedented impact to communities and programs across the state. This budget does not only cause harm, it compounds harm to vulnerable Alaskans. I remain unwavering in my commitment to protect critical programs – like education, healthcare, Power Cost Equalization, and public safety – that are essential to supporting the well-being of our district,” – Tiffany Zulkosky

“If they cut Medicaid at that level, we will be attending more funerals out here.” – Mike Williams, Sr.

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