State Relations

The Capitol Report

February 27, 2015

The Capitol Report
By Chris Christensen
Associate Vice President for State Relations

Today is the 39th day of the legislative session.

As previously reported, the governor and the legislature are considering unprecedented cuts in the state operating budget for FY16, and the assumption is that cuts will probably be made in subsequent years as well. The steep decline in oil revenues this year, coupled with the long-term reduction in oil production, has pushed the estimated deficit for the current fiscal year (FY15) to $3.6 billion. The deficit in FY16 may be as large if circumstances do not change.

Governor Walker submitted an FY16 operating budget to the legislature that proposed non-formula cuts to state agencies that averaged 6.5 percent. The governor’s proposed cut for the university was only 2.5 percent. The governor believes that higher education, research, and workforce development are essential to Alaska’s well-being, and that the state needs to maintain a strong university system during this economic downturn and beyond.

The governor’s proposal would make a net reduction to UA’s operating budget of around $9.3 million. Note that UA would also have to absorb about $26 million in fixed cost increases for things like salaries, utilities, and new facility operating costs. The legislature doesn’t call it a “budget cut” when it declines to fund these cost increases, but regardless of what they’re called, UA has to pay for these new costs by reducing spending elsewhere or by increasing revenue.

Unfortunately, UA’s House Budget Subcommittee, chaired by Rep. Tammie Wilson of North Pole, has proposed cutting far more from UA’s budget than Governor Walker.

The proposal that Rep. Wilson originally presented to her subcommittee members was for a cut of more than $53 million in state funds. Some members were concerned with the sheer magnitude of that reduction, and the subcommittee finally sent a compromise proposal to the House Finance Committee that would cut UA’s budget by about $35 million. This is a cut of almost 10 percent, not counting the $26 million in fixed cost increases that UA must pay for by reallocating existing resources or raising new revenues. While the regents would have the final say as to how these cuts would be spread around the system, the subcommittee suggested significant personal and contractual services cuts to each main campus and community campus, as well as cuts to travel budgets (50 percent at the main campuses) that would cripple programs, particularly intercollegiate athletics. The subcommittee also made a specific cut to the advising program that has had such success in improving graduation rates. Finally, the subcommittee recommended a 20 percent reduction in personal services and a $500,000 cut in travel for Statewide. Remember, the reduction recommended by the subcommittee follows the 4.5 percent budget cut that UA received last year.

These proposed reductions will be debated by the full House Finance Committee during the week of March 9, when the committee is tentatively scheduled to adopt its version of the state’s FY16 operating budget. Our job in the next week is to let House members know that we think the subcommittee’s proposal goes too far in one year. We know that the state is in difficult financial circumstances, and we understand the need to reduce the budget. We believe that more gradual cuts over several years, as proposed by the governor, will enable us to continue contributing in a meaningful way to what will help lead the state out of its current fiscal situation. UA cannot absorb a cut of this magnitude in a single year without serious, long-term impairment of the system. That means harm to students, to employers, to faculty and staff, and to Alaska’s economy.

There are two effective things that you can do in the next week: testify during the public hearings, or contact House members via email or telephone. There is also an additional opportunity this weekend for advocates who live in Anchorage.

First, the House Finance Committee is going to take statewide public testimony on the operating budget at local Legislative Information Offices on Tuesday, March 3, Wednesday, March 4, and Thursday, March 5. This is the annual opportunity for advocates to have their voices heard. There have been years when more UA advocates offered testimony than did advocates for any other entity or program. This is the year that we need that kind of turnout.

You will have only two minutes to convey your message. You will be asked to identify yourself, including your name, affiliation, and legislative district. The latter gets your legislator’s attention if he or she is at the table. You should thank them for their past support of the university.

Legislators are not so much interested in the financial details of the budget request as they are to hear your story. Tell them why UA is important to you or why it is important to the state. Talk about personal experiences that demonstrate the value of a program. Tell them what your future plans are and how the university will help you accomplish them. Let them know why you think a budget closer to the governor’s number is in the best interest of the state.

If you feel comfortable talking more about this, feel free to mention the improvements we’ve seen in metrics measuring student attainment and achievement; the federal research dollars we are attracting; the national and international recognition and engagement on matters related to the Arctic and its potential; and the partnerships we are forging with current industries and those looking to expand their presence in Alaska. To learn more about this, read the memo and backup materials that were sent by President Gamble in response to Governor Walker’s call for state agencies and the university to submit budget adjustments reflecting possible 5% and 8% reduction scenarios. It provides context on what we have done and will continue to do to manage budget challenges and provides a sample of some of our recent achievements. At the same time, it acknowledges the critical work ahead to ensure that we maintain a strong university by preserving our core. You can find links to the memo and backup documents on this webpage: http://www.alaska.edu/state/advocacy/ Look under “FY2016 Budget Information.”

At the end of your testimony, be sure to thank the legislators for their time and ask for their continued support.

You can find the location of your local Legislative Information Office at this link: http://akleg.gov/lios.php

Here is the schedule for public testimony:

Tuesday, March 3                  

1:00 – 3:30 p.m.* Juneau

3:30 – 5:30 p.m.* Homer, Kenai, Ketchikan, Kodiak, Mat-Su & Seward

Wednesday, March 4 

1:00 – 4:00 p.m.* Barrow, Dillingham, & Fairbanks

4:00 – 5:30 p.m.* Bethel, Cordova, Kotzebue, Nome, Valdez, Wrangell & **Off Net sites

Thursday, March 5

1:00 – 4:30 p.m.* Anchorage

4:30 – 6:00 p.m.* Sitka, Petersburg, Delta Junction, Unalaska, Glennallen, & Tok

-Public testimony limited to 2 minutes each.

-Please arrive 15 minutes prior to the end of the allotted time period or testimony will close early.

-If you are a member of a group with the same message, in the interest of time, please select a spokesperson to testify for the entire group. 

-**If you are calling from a community without a legislative information office, i.e., an “Off Net” caller, only call during the designated Off Net time period on Wednesday. Please call 465-4648 by 5:00pm on Monday to obtain the call-in phone number.

-*If you live in a community with a legislative information office, but are unable to access it during the specified time period, you may send your written testimony to the House Finance Committee via lhscfin@akleg.gov

-Please try to arrive 15 minutes early to expedite the sign-in process.


House Finance Committee members and alternate members are listed below. Note that an email link is on each member’s webpage, if you wish to contact one or more of them directly, instead of or in addition to offering testimony at the hearings. The email link in the preceding paragraph (lhscfin@akleg.gov) can be used to provide written public testimony that will be given to all the members during the meetings.

Representative Mark Neuman, Co-Chair, (R) Big Lake
http://akleg.gov/legislator.php?id=neu

Representative Steve Thompson, Co-Chair, (R) Fairbanks
http://akleg.gov/legislator.php?id=thp

Representative Bryce Edgmon, (D) Dillingham
http://akleg.gov/legislator.php?id=edg

Represenative Lynn Gattis, (R) Wasilla

http://akleg.gov/legislator.php?id=gat

Representative Cathy Munoz, (R) Juneau
http://akleg.gov/legislator.php?id=mun

Representative Lance Pruitt, (R) Anchorage

http://new.akleg.gov/legislator.php?id=PRU

Representative Dan Saddler, (R) Eagle River

http://akleg.gov/legislator.php?id=sad


Representative Tammie Wilson, (R) North Pole
http://akleg.gov/legislator.php?id=wlt

Representative Les Gara, (D) Anchorage (minority member)
http://akleg.gov/legislator.php?id=gar


Representative David Guttenberg, (D) Fairbanks (minority member)
http://akleg.gov/legislator.php?id=gtt

Representative Scott Kawasaki, (D) Fairbanks (minority member)
http://akleg.gov/legislator.php?id=kaw

Representative Mike Hawker, (R) Anchorage (alternate member)
http://akleg.gov/legislator.php?id=haw

The second thing that you can do is contact the House member who represents you, whether or not that person is a member of the Finance Committee, and let them know how you feel. Those members will make their views known to their Finance Committee colleagues during caucuses on the budget. If you don’t know which House member represents you, you can find out on this webpage: http://www.elections.alaska.gov/vi_eo_state.php

You can find email links for House members here: http://akleg.gov/house.php

The third thing that Anchorage advocates can do is testify at the Anchorage Legislative Caucus public hearing in the Loussac Library Assembly Chambers. The hearing will be held Saturday, February 28, from 1:00 – 5:00 p.m. The Anchorage Legislative Caucus is a bipartisan group made up of all Anchorage legislators, and they want to hear about any issue that concerns you, including the UA budget.

Once it is finished with public testimony, the House Finance Committee will take the comments it received under consideration and close out the state operating budget around March 10. Shortly thereafter, the operating budget will be sent to the full House for a vote.

After the budget passes the House, we will do this all over again in the Senate, and then the House and Senate versions of the budget will be reconciled in a conference committee. The Senate has not yet started its work on the UA operating budget, and we will let you know when it does.

 

Thank you for all your work to promote and support the University of Alaska!
---
For more information, contact Associate Vice President Chris
Christensen at cschristenseniii at alaska.edu or visit
www.alaska.edu/state.

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February 13, 2015

The Capitol Report
By Chris Christensen
Associate Vice President for State Relations

Today is the 25th day of the legislative session. The House is about halfway through the operating budget review process, and the Senate has just begun its work.

Last week, the House’s University Budget Subcommittee had two hearings on our FY16 operating budget. President Gamble provided an overview of the university system, and discussed the operating budget that the governor submitted to the legislature. He also talked about the short-term and long-term impact on the university of the decline in oil revenue, and the plans that UA has been developing to deal with the resulting reduction in state funds.

At the second subcommittee hearing, Regent Mike Powers provided an overview of the role of the Board of Regents in governing the university. He was assisted by Board Chair Jo Heckman via audio conference. Regents Ken Fisher and Dale Anderson attended the meeting in person and were invited to make brief statements by Chair Tammie Wilson. New Regent Lisa Parker and long-time Regent Mary Hughes were also on line.

This week, we had two additional subcommittee hearings. On Monday, Dr. Dan White, UAF’s Interim Vice Chancellor for Research, and Dr. Helena Wisniewski, UAA’s Vice Provost for Research and Graduate Studies, appeared at the request of the subcommittee to speak about research and grants at UA. They discussed grant revenue received by the system, the benefits of research to UA and to the state, and UA’s efforts to use research to leverage additional revenue and benefit Alaska’s economy.

On Thursday, the subcommittee heard from President Gamble and UAS Chancellor John Pugh on the topic of students, classes, and tuition. The subcommittee wanted to hear about graduation rates, job placement, and the costs and benefits of operating facilities and programs in communities all around the state.

The subcommittee process in the House will conclude in late February, and then the full House Finance Committee will take up the budget. Representative Mark Neuman, the Co-Chair of the House Finance Committee, told the press recently that the House would be looking at the governor’s budget with an eye for further cuts. This is disappointing news, since the governor's budget for the university already proposes a cut.

In the Senate, President Gamble appeared before the Senate Finance Committee on Wednesday to provide an overview to the committee. The Senate has not yet scheduled any hearings for its University Budget Subcommittee.

Advocacy:

We’ve had questions about advocacy activity this session. UA has many passionate advocates who are always willing to assist as we try to get our message out to legislators.

Normally, university advocates ask legislators to support various operating increments and capital projects that have been sent to the legislature by the Board of Regents.

While the Board of Regents did approve modest operating increments and several capital projects in November, since that time the board and university leadership have acknowledged the radically different fiscal environment that the state is facing. As I have noted in previous Capitol Reports, the price of oil has collapsed in the last four months, and the state is missing two-thirds of the revenues it expected to fund the state budget during the current fiscal year. This year’s deficit is now estimated to run between $3.5 and $4 billion. Projections from the Department of Revenue are that the price of oil will remain low for a least another year, and the governor and legislature are planning accordingly.

With that in mind, we are no longer pushing for an increase.

We are pleased that Governor Walker’s budget shows a smaller percentage reduction to the university's operating budget than the reduction he proposed for most agencies, and his capital budget does include a modest amount for the new UAF engineering building and for deferred maintenance. In our conversations with legislators, we are asking them to support the governor's proposed budgets.

We are also asking that the legislature make a single lump-sum operating appropriation to the university, instead of giving us multiple appropriations that specify cuts to individual programs, campuses, or categories (such as personnel costs). The lump sum would allow us to manage budget reductions as we believe will best ensure a strong university going forward.

We know that advocates will have specific things that are important to them and we hope they will share examples of things that have had and continue to have an impact on them and on the state.

It's important that legislators and other community leaders see the university as a major asset to the state and a partner in helping to educate Alaskans for the roles they will play in advancing our state and its economy.

Other Meetings:

A Lunch and Learn was held on Monday on “UAS Industry in Alaska and Alaska Center for Unmanned Aircraft Systems Integration." The presenter was Ro Bailey, the Director of the Pan-Pacific UAS Test Range Complex and Deputy Director of ACUASI. The Lunch and Learn is a 60-minute presentation made during the lunch hour that is used by the university and other organizations to provide information on topics of interest to legislators and staff. Lunch is provided by the sponsor, and presentations are popular and well attended.

Next Week:

On Monday at noon, there will be a Lunch and Learn on the Alaska Maritime Workforce Development plant. The presenters will include UAF’s Paula Cullenberg, the Director of Alaska Sea Grant.

On Monday, Tuesday, and Wednesday, the R/V Sikuliaq will be in Juneau. The Sikuliaq is on its maiden voyage to its home port of Seward. The vessel is a 261-foot oceanographic research ship designed for work in the Arctic. It is owned by the National Science Foundation and operated by UAF’s School of Fisheries and Ocean Sciences. It is one of the most advanced university research vessels in the world. Legislators will be touring the Sikuliaq while it is here.

Watch Gavel to Gavel ( www.360north.org ) to view these and other hearings.

For more information, contact Chris Christensen at
cschristenseniii@alaska.edu or visit www.alaska.edu/state .

~~~~~~~~~~~~~~~~~~~~~~~
Many Traditions ... One Alaska
~~~~~~~~~~~~~~~~~~~~~~~

  1. www.alaska.edu
  2. www.facebook.com/uasystem

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January 30, 2015

The Capitol Report
By Chris Christensen
Associate Vice President for State Relations

Today is the 11th day of the First Session of the 29th Alaska State Legislature. The session is scheduled to end in 79 days, on April 19. 

The length of regular sessions was shortened from 121 days to 90 days in 2008. There is a lot of work to get done in only 90 days, and the shorter sessions mean that legislators have less time to meet with constituents and less time to deliberate on the budgets and on the bills in committee. Committees start working at full speed during the first week.

As I previously reported, Governor Walker has substantially revised and reduced the operating budget that was prepared by the outgoing Parnell administration. This was necessary because of the dramatic drop in state revenues. One fact that the legislature is grappling with is that if it laid off every single state employee, it would only reduce the projected deficit by about 35%. The problem is that big. 

The House Finance Committee and its budget subcommittees will be reviewing Governor Walker’s FY16 operating budget over the next five or six weeks. The work should be finished by early March, and then the budget will head to the House Floor for a vote.

President Gamble appeared before House Finance yesterday to provide an overview of UA and its budget situation. He lined out the challenges that UA faces in the near-term and long-term to deal with reductions, while still providing for the postsecondary education and research needs of Alaska. He shared what has been done to reduce expenditures during the current fiscal year, and the discussion that is ongoing with the Board of Regents, chancellors, faculty, and staff to explore longer-term strategic cuts and revenue opportunities that will help UA preserve and strengthen its core during this downturn in the state’s finances. Quality must be preserved in that core, and a right-sized cadre of faculty and staff must be retained to do the preserving. When Alaska makes its eventual economic turnaround, UA needs to be healthy enough to make a successful recovery along with the rest of the state.

A budget subcommittee will do the detailed review work on the University’s budget and send a recommendation back to the full Finance Committee. The subcommittee is composed of one House Finance Committee member (Tammie Wilson), and six legislators who are not members of the Finance Committee. Our subcommittee members are:

  • Representative Tammie Wilson, Chair (R-North Pole; House Majority)
  • Representative Jim Colver (R-Palmer; House Majority)
  • Representative Neal Foster (D-Nome; House Majority)
  • Representative Paul Seaton (R-Homer; House Majority)
  • Representative Liz Vasquez (R-Anchorage; House Majority)
  • Representative Andy Josephson (D-Anchorage; House Minority)
  • Representative Adam Wool (D-Fairbanks; House Minority)

The House starts the work on the operating budget, and the Senate Finance Committee will do much of its work after the House has passed the budget and transmitted it to the Senate for consideration.The Senate Finance Committee also has a University Budget Subcommittee to do the detail work. The subcommittee is made up of two members of the Senate Finance Committee (Pete Kelly and Anna MacKinnon) and two senators who are not members of the Finance Committee. The subcommittee members are: 

  • Senator Pete Kelly, Chair (R-Fairbanks; Senate Majority)
  • Senator Anna MacKinnon (R-Eagle River; Senate Majority)
  • Senator Gary Stevens (R-Kodiak; Senate Majority)
  • Senator Johnny Ellis (D-Anchorage; Senate Minority)


Next Week:
 

UA President Pat Gamble will appear before the House’s University Budget Subcommittee on Monday, February 2 at 5:00 p.m. to provide an overview of the university system. There will be a second subcommittee meeting on Thursday, February 5 at 5:00 p.m.

On Tuesday, February 3, the House Resources Committee will hold a Lunch & Learn in the Capitol at noon. The topic is the "Economics of Mining Exploration & Development.” Bob Loeffler, Professor of Public Policy, Institute of Social & Economic Research at UAA, will present.

Bills of Interest:

Companion bills declaring the Arctic policy of the state were introduced in the House and Senate last week. HB 1 is sponsored by Representative Bob Herron, and SB 16 is sponsored by Senator Lesil McGuire. Among other things, the bills provide that it is the policy of the State to “build capacity to conduct science and research and advance innovation and technology in part by providing support to the University of Alaska for Arctic research consistent with state priorities.” HB 1 will have a hearing in the House Economic Development, Tourism, and Arctic Policy Committee on Thursday, February 5 at 10:15 a.m. SB 16 is currently in the Senate Special Committee on the Arctic, but has not yet been scheduled for a hearing. 

Representative Scott Kawasaki has introduced HB 54. This bill authorizes the university to establish a school of medicine at UAF and a school of law at UAA, if it chooses to do so. It is currently in the House Education Committee.

Representatives Les Gara, Dan Ortiz, and Adam Wool have sponsored HB 63. This bill provides for a reduction in interest on postsecondary education loans for residents. It is currently in the House Education Committee.

Senator Anna MacKinnon has introduced SJR 2. This resolution proposes a constitutional amendment to establish a cost-effective way to finance state education loans by leveraging the State’s outstanding general obligation credit ratings. Doing so will not only achieve lower costs of funds than what is otherwise available through current alternative financing structures, but will also permit some relaxation of the loan underwriting criteria which currently results in a 41% denial rate on loan applications. SJR 2 is currently in the Senate State Affairs Committee.

Watch Gavel to Gavel (www.360north.org) to view hearings. Also see the legislative information web page (http://www.legis.state.ak.us/basis/start.asp).

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For more information, contact Chris Christensen at cschristenseniii@alaska.edu.

January 23, 2015

The Capitol Report
By Chris Christensen, Associate Vice President, State Relations

Last night, Governor Bill Walker gave his first State of the Budget speech to the Alaska Legislature. Governor Walker said that he was submitting new FY16 operating and capital budgets to the legislature, to replace those that were prepared by the last administration when oil prices were higher. He stated that the new operating budget would cut state spending by about 5 percent, with all agencies receiving general fund budget reductions. Cuts are even proposed for popular programs like K-12 funding and municipal revenue sharing. Walker also said that unless oil prices rebound quickly, the state will need to start discussing new taxes next year, because the savings accounts that cover deficits will be empty in three years.

In the governor’s proposed operating budget, UA receives a smaller cut than most executive departments. The average non-formula agency cut from the current fiscal year (FY15) is 6.5 percent; UA’s proposed cut from FY15 is 2.4 percent. This number does not include some increased costs that UA will be expected to cover (such as pay raises, new building operating costs, and utilities increases), which will make the effective budget reduction much higher than 2.4 percent.

In the governor’s proposed capital budget, UA has two items: $8 million in unrestricted general funds to continue construction of the UAF engineering building project, and $8 million in unrestricted general funds for deferred maintenance. There was nothing for UA in the previous version of the capital budget, so this is good news.

These new budgets will now be considered by the legislature. It is expected to make additional cuts to the budgets before they are voted on in April.

For more information, contact Associate Vice President Chris Christensen at cschristenseniii@alaska.edu

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January 21, 2015

The Capitol Report
By Chris Christensen, Associate Vice President, State Relations

The First Session of the 29th Alaska State Legislature is underway in Juneau. My name is Chris Christensen, and I am the Associate Vice President for State Relations. This will be the 32nd session I have spent working with the legislature in Juneau, and the fourth year I have represented the university. I know the legislature and its members well, but each year brings new challenges and this one will be no exception. One thing I have learned in my time here is that there are many passionate advocates for the university, people who are willing to devote their time and energy to advancing its interests. You made my first three sessions with UA much easier, and I look forward to working with all of you again this year.

Over the course of the legislative session, you will be receiving this newsletter periodically to keep you up to date on what is happening in Juneau. When there are important hearings or opportunities to actively engage in advocacy for the university, we will also post it on the UA State Relations webpage: www.alaska.edu/state

The steep decline in oil revenues this year, coupled with the long-term reduction in oil production, has created a budget situation that will probably result in unprecedented cuts to the state budget over the next few years. When the legislature left Juneau last April, it anticipated that the budget for the current year, FY15, would result in a $1.4 billion deficit. In fact, the deficit is approaching $4 billion and collapsing oil prices keep pushing it higher. Think of the $4 billion deficit this way: the state’s FY15 general fund budget is approximately $6 billion. Two-thirds of the revenues needed to fund that level of spending are simply not there.

In recent years, the legislature has covered deficits by withdrawing money from savings. However, continuing deficits of the size we are running this year will drain the state’s savings accounts in less than three years. The legislature can’t reduce the size of future deficits by raising the price of oil, but it can reduce those deficits by cutting spending. That is what it will do this session. The question is, how much?

Governor Walker plans to introduce new state operating and capital budgets for FY16 in the next few weeks. These budgets will replace the budgets that former Governor Parnell prepared before he left office; much of the work on those budgets was done when oil prices were expected to be much higher and the deficit much smaller. It is anticipated that the new operating budget will contain cuts for all state agencies of five percent to eight percent. It is also anticipated that there will be no capital money for any projects that do not have a federal match, such as road projects.

We will update you when we learn how much Governor Walker proposes for UA’s budget in FY16. We will also provide you with more information on the best way to approach the advocacy process during this challenging session.

While waiting for the latest word from the governor, the House and Senate Finance Committees are already starting to work on the operating budget. University President Pat Gamble has been asked to appear before the House Finance Committee on Thursday, January 29 between 1:30 – 3:30 p.m. to give committee members an overview on UA and its operating budget. He will give the same presentation to the Senate Finance Committee on Wednesday, February 11 between 9:00 – 11:00 a.m. President Gamble will also appear before the House’s University Budget Subcommittee on Monday, February 2 at 5:00 p.m.  We will keep you updated as budget hearings are added to the schedule.

Here are links to some handy reference guides for your information and use. We will also post them on the State Relations webpage for easy access:

A roster of legislative members with contact information:
http://akleg.gov/docs/pdf/whoswho2015.pdf

Legislators by district:
http://akleg.gov/docs/pdf/DISTRICTS.pdf

Committee assignments for the 29th legislature:
http://www.akleg.gov/basis/committee/#tabCom4

BASIS – A great reference tool to locate specific legislation, bill sponsors, legislative actions, and a host of other reference materials:

http://www.akleg.gov/basis/Home/BillsandLaws

Thank you for supporting the University of Alaska!

For more information, contact Associate Vice President Chris Christensen at cschristenseniii@alaska.edu
 


This publication is produced and distributed by the State Relations office of the University of Alaska System with assistance from the UA Office of Public Affairs.

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