State Relations

The Capitol Report

The second session of the 29th Alaska State Legislature started January 19, 2016. To receive each Capitol Report as its distributed please sign up to the Support UA list serv. To subscribe, please click here!

February 12, 2016
The Capitol Report

 By Chris Christensen
Associate Vice President for State Relations

Today is the 25th day of the legislative session, and the last ten days have been eventful. During that time, we have had five budget hearings in the House, and legislation was introduced that will allow persons to carry concealed handguns on university property.

SB 174 – Guns on Campus
SB 174, "An Act relating to the regulation of firearms and knives by the University of Alaska," was introduced by Senator Pete Kelly on Monday. The bill was assigned to the Senate Education Committee and the Senate Judiciary Committee, and the Education Committee has already scheduled two hearings next week. SB 174 takes away most of the Board of Regents’ authority to regulate the carrying of concealed handguns at the university, even by persons who don’t have a concealed carry permit. The Board is opposed to the bill in its current form, and we should have position papers on the State Relations web page by Monday. The bill appears to have many supporters in the Senate and is on a fast track. Senator Mike Dunleavy, the chair of the Senate Education Committee, is a co-sponsor of the bill, as is the chair of the Senate Judiciary Committee, Senator Lesil McGuire. You can find more information on SB 174 at http://www.akleg.gov/basis/Bill/Detail/29?Root=SB%20174 .

If you would like to express an opinion, the members of the Senate Education Committee are listed below, along with their contact information. You can also use the legislature’s Public Opinion Messaging System to send a 50-word message to some or all legislators (http://www.legis.state.ak.us/poms/ ).

Senator Mike Dunleavy, Chair ( Senator.Mike.Dunleavy@akleg.gov ; 465-6600)
Senator Charlie Huggins ( Senator.Charlie.Huggins@akleg.gov ; 465-3878)
Senator Cathy Giessel ( Senator.Cathy.Giessel@akleg.gov ; 465-4843)
Senator Gary Stevens ( Senator.Gary.Stevens@akleg.gov ; 465-4925)
Senator Berta Gardner ( Senator.Berta.Gardner@akleg.gov ; 465-4930)

For those who wish to testify, the hearings will be held on Tuesday and Thursday from 3:30 – 5:00 p.m. in the Capitol Building, Room 205. There will be a teleconference set up, so you can also testify from your local Legislative Information Office if you are not in Juneau.

Budget
The House is almost halfway through the operating budget review process. Earlier this week, the House stopped working on all issues that do not involve appropriations or revenues. Basically, it has decided to work only on budget-related issues until the operating budget passes the House in early March. This was a surprising decision, but members say that the state’s financial situation is so dire that they don’t want to be distracted from the budget process by other matters.

Ten days ago, the House’s University Budget Subcommittee began hearings on our FY17 operating budget. Normally, the subcommittee chair picks specific topics and has individuals from the university sit in the witness chair, testifying and answering question from subcommittee members on those topics. This year, Chair Tammie Wilson is doing something very different. So far, the subcommittee meetings have been informal roundtable discussions between members and university representatives, including members of the Board of Regents. The meetings are being held in a room with an audio broadcast but no webcam, to create a more relaxed atmosphere. If you are interested in listening to recordings of these meetings or watching video of other meetings, you can look them up in the Gavel to Gavel archive at http://www.360north.org/gavel-archives/?startPage=1

We have had four subcommittee meetings using this new format. On February 2, Representative Wilson presented her “University of Alaska Consolidation Proposal - Three Universities Made into One.” Representative Wilson believes that student retention rates and graduation rates are among the most important ways to measure university success, and that UA’s budget could reasonably be tied to its performance in improving those rates. Present at the meeting or online were Board of Regents Chair Jo Heckman, Regent John Davies, and Regent Ken Fisher. Also online were Vice President for Academic Affairs and Research Dan White, and Vice President for University Relations Michelle Rizk.

On February 4, the subcommittee continued the discussion of performance measures and metrics. Present online or at the meeting were Regents Heckman, Anderson and Fisher; UAS Chancellor Rick Caulfield and Interim Provost Priscilla Schulte; and Dan White and Michelle Rizk.

On February 9, the subcommittee continued the discussion of Representative Wilson’s proposal with Dan White and Michelle Rizk. Regent Heckman participated online.

Finally, on February 11, the subcommittee talked with me about the limited amount of income-producing land possessed by UA, and also discussed action taken to implement recommendations contained in the Final Report of the Alaska Advisory Task Force on Higher Education & Career Readiness (HECR). That report was issued in 2011, and made several recommendations to the university. Participating in that discussion were Dan White, Michelle Rizk, and Chancellor Caulfield.

The subcommittee process in the House will conclude in late February, and then the full House Finance Committee will take up the budget. Governor Walker’s operating budget contained a $100 million reduction from the current year’s level. However, members of the House and Senate majorities have repeatedly suggested that a $500 million cut is more likely. It is probable that UA will see a cut substantially larger than the $15.8 million net reduction (4.5 percent) that was proposed by the governor in his operating budget.

Dan White and Michelle Rizk also appeared before the full House Finance Committee on Tuesday to provide an overview to the committee. President Jim Johnsen was on medical leave this week due to some unexpected complications from his December shoulder surgery, so he could not appear. The president is continuing to work on the issues before the legislature, but he needs to keep a limited meeting and travel schedule for the next few weeks.

The Senate has not yet scheduled a Finance Committee overview or any hearings for its University Budget Subcommittee. It appears, however, that the Senate will try to complete the budget process several weeks earlier than normal, possibly by mid-March.

Other Meetings
The House Education Committee had a hearing on HB 264, "An Act relating to repayment of Alaska performance scholarships and Alaska education grants." The bill was introduced by Representative Tammie Wilson, and it would require repayment of Alaska Performance Scholarships and education grants if the recipient doesn’t complete the postsecondary program enrolled in within six years. UAF Provost Susan Henrichs submitted a letter expressing concerns about the effects of the bill on students. You can get more information about the bill and read the letter here: http://www.akleg.gov/basis/get_bill.asp?session=29&bill=HB264

The House’s Department of Education and Early Development (DEED) Budget Subcommittee met on Tuesday to take testimony from Jane Shelby, the Director of UAA’s WWAMI School of Medical Education. The WWAMI program is funded through DEED’s budget, not the university’s budget. Last year the House cut WWAMI funding, but the money was restored by the conference committee that resolved differences between the House and Senate budget versions. It would not be a surprise if the House cut WWAMI funding again this session, since the overall cuts are expected to be bigger than last year’s reductions.

Also at that meeting, UAA Vice Provost Herb Schroeder discussed funding for the Alaska Native Science and Engineering Program (ANSEP) that is contained in the DEED budget.

Next Week
The House’s University Budget Subcommittee is scheduled to have three meetings next week. On Monday at 5:00 p.m., the subcommittee will continue its discussion of the HECR report. It will also discuss the reports commissioned by UA from Terrence MacTaggart (2008) and James Fisher (2011). On Tuesday at 5:00 p.m., the subcommittee will discuss UA facilities issues. A third meeting will be held on Thursday at 5:00 p.m., but the agenda has not yet been announced.

Thank you for supporting UA!

---------------------------------------------------

Watch Gavel to Gavel ( www.360north.org ) or the legislature’s streaming service (http://w3.legis.state.ak.us/#tab5 ) to view these and other hearings.

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

Capitol Report: Jan. 29, 2016

January 29, 2016
The Capitol Report

 By Chris Christensen
Associate Vice President for State Relations

Today is the 11th day of the Second Session of the 29th Alaska State Legislature. The session is scheduled to end in 79 days, on April 17.

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 session means that legislators have less time to meet with constituents and less time to deliberate on the budgets and on other bills. As a consequence, committees start working at full speed during the first week. Of course, working hard for 90 days doesn’t always get things done on schedule; last year, it took a 98-day regular session and two special sessions to resolve all the budget issues before adjournment on June 11.

On the first day of session, Governor Walker introduced his operating and capital budget bills, and they were referred to the House and Senate Finance Committees. Traditionally, the operating budget is amended and passed first by the House, and then sent to the Senate. The capital budget is amended and passed first by the Senate, and then sent to the House.

The House Finance Committee and its budget subcommittees will be reviewing Governor Walker’s FY17 operating budget over the next four or five weeks. The work should be finished by early March, and then the budget will head to the House Floor for a vote.

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)

    As noted, the House starts the work on the operating budget, and the Senate Finance Committee will do much of its work only after the House has passed the budget and transmitted it to the Senate for consideration. The Senate Finance Committee also has a budget subcommittee to do the detail work on UA’s operating budget. 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)

    Last week, the House Education Committee had a joint meeting with the House University Budget Subcommittee to hear a presentation by Representative Tammie Wilson titled “University of Alaska Consolidation Proposal - Three Universities Made into One.” The presentation discussed UA performance, costs, and potential savings through consolidation. Representative Wilson’s basic point was that state revenues are in dramatic decline, and UA could increase opportunities and save money by consolidating academics and administration in the appropriate way. While one can disagree with some of the statistics used and conclusions drawn from them, there were points made that resonated with committee members. Representative Wilson emphasized that it is up the Board of Regents to decide how the university is structured and operated, and she would not be introducing legislation this year to force consolidation.

    If you are interested, you can watch a video of the 45-minute meeting and download a PowerPoint of the presentation at this link:
    http://www.akleg.gov/basis/Meeting/Detail?Meeting=HEDC%202016-01-22%2008:00:00#tab4_4

    Other Meetings:

    On Monday, a joint meeting of the House and Senate Judiciary Committees was held to hear Associate General Counsel Mike O’Brien provide an overview on Title IX and university policy. The questions by committee members focused
    on the due process rights afforded to students and employees who are accused of Title IX violations. An audio tape of the hearing can be found at this link:
    http://www.akleg.gov/basis/Meeting/Detail?Meeting=HJUD%202016-01-25%2013:30:00#tab4_4
    <https://mail.google.com/mail/u/0/www.akleg.gov/basis/Meeting/Detail?Meeting=HJUD%202016-01-25%2013:30:00#tab4_4>

    On Wednesday, a joint meeting of the House and Senate Education Committees was held to hear a report and a proposal by UAA Vice Provost Herb Schroeder, the founder of the Alaska Native Science & Engineering Program (ANSEP). Dr. Schroeder would like the university to take over Mt. Edgecombe High School from the Department of Education and Early Development and operate it as the ANSEP Acceleration High School, a three-year STEM academy. The sense of the committee was that the proposal had merit but raised many important questions that must be answered first. A video of the hearing can be seen at:
    http://www.360north.org/gavel/video/?clientID=2147483647&eventID=2016011077

    Gunnar Knapp, the Director of UAA’s Institute of Social and Economic Research (ISER), participated in two Lunch and Learn events in the Capitol Building. On Tuesday, he spoke on "Alaska's Fiscal Challenge: What Every Alaskan Should Know & Think About.” On Thursday, he presented "The Fiscal Balance Game: A New & Instructive Way to Think About Alaska's Fiscal Challenge.” Both events were sponsored by the House Finance Committee.

    Next Week:

    The House University Budget Subcommittee has two hearings scheduled next week. On February 2 from 5:00 p.m. to 7:00 p.m., Representative Wilson will make a presentation on “Budget Overview & Consolidation Plan.” On February 4 from 5:00 p.m. to 6:00 p.m., President Johnsen and others have been invited to discuss the budget and the university’s strategic plans. These meetings will take place in a room without a webcam, and it is unknown at this time if they will be broadcast by Gavel to Gavel.

    There will be a an overview on “The Fiscal Effects of Commercial Fishing and Mining” by Bob Loeffler, Professor of Public Policy, UAA  Institute of Social & Economic Research (ICER). Professor Loeffler will appear in front of the House Resources Committee on February 1 between 1:00 – 3:00 p.m., and in front of the Senate Resources Committee on the same day between 3:30 – 5:00 p.m. You can watch the hearings at this link:
    http://w3.legis.state.ak.us/index.php#tab5

    New Bills:

    Several bills of interest to the UA community have been introduced this session:

    Representative Jim Colver introduced HB 232, "An Act relating to the duties of the Department of Education and Early Development; relating to student assessments; and prohibiting the Department of Education and Early Development from administering the Alaska Measures of Progress student assessments." The bill was referred to the Education and Finance Committees. No hearings have yet been scheduled. You can get more information here:
    http://www.akleg.gov/basis/get_bill.asp?session=29&bill=HB232

    Representative Tammie Wilson introduced HB 264, "An Act relating to repayment of Alaska performance scholarships and Alaska education grants." The bill was referred to the Education and Finance Committees. No hearings have yet been scheduled. You can get more information here:
    http://www.akleg.gov/basis/get_bill.asp?session=29&bill=HB264

    Representative Tammie Wilson also introduced HB 265, "An Act relating to terminating the Alaska technical and vocational education program; increasing contributions to the Department of Labor and Workforce Development for the State Training and Employment Program; and providing for an effective date." The bill was referred to the Labor & Commerce and Finance Committees. No hearings have yet been scheduled. You can get more information here:
    http://www.akleg.gov/basis/get_bill.asp?session=29&bill=HB265

    Thank you for your support of the University of Alaska!
    --
    Watch Gavel to Gavel (www.360north.org) or the legislature’s webcam network (http://akleg.gov/index.php#tab5) to view live and archived hearings. Also see the legislative information web page (http://www.legis.state.ak.us/basis/start.asp) for information on bills and committee meetings.

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

Capitol Report: Jan. 20, 2016

January 20, 2016
The Capitol Report

 By Chris Christensen
Associate Vice President for State Relations

The Second Session of the 29th Alaska State Legislature is underway in Juneau, and the 90-day session will be a challenging one. My name is Chris Christensen, and I am the Associate Vice President for State Relations. This will be the 33rd session I have spent working with the legislature in Juneau, and my fifth year representing the university. I know the legislature and its members well, but each year brings new challenges and unexpected complications. 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 four 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

Our most important task each session is advocating for the university’s operating and capital budgets. That job has been made more difficult over the last few years by the dramatic reduction in oil revenues received by the state, the result of both declining production and a collapse in prices. In FY13, the state took in $6.3 billion in unrestricted revenues. By FY15, unrestricted revenues had declined to $2.3 billion. During FY16, the current fiscal year, it is estimated that the state will receive $1.8 billion in unrestricted revenues. In FY 17, unrestricted revenues are projected to be about $2 billion. This decline means that the state will run an estimated $3.6 billion deficit during the current fiscal year. When the legislature puts together the FY17 budgets this session, it will attempt to lower next year’s deficit by reducing state spending.

Governor Walker announced his FY17 operating and capital budgets on December 15. Those budgets propose that the state spend 3.1 percent less in unrestricted general fund (UGF) dollars than it is spending during the current fiscal year.

For the university’s operating budget, the governor is proposing a $25.6 million UGF decrease from the FY16 base budget, and a $9.8 million UGF increase for certain salary and benefit adjustments for employees. The net decrease from FY16 is $15.8 million, or 4.5 percent.

In his capital budget, Governor Walker is proposing that UA receive $10 million UGF for deferred maintenance. Unfortunately, there is no funding in his budget for the balance needed to complete construction of the new UAF engineering building ($34.8 million). In addition to the capital budget, the governor will be proposing a general obligation bond package to fund additional capital expenses. If enacted by the legislature, the bond package will be put on the ballot for voter approval in November. We don’t know at this time what projects will be included by the governor.

Governor Walker is also proposing the New Sustainable Alaska Plan, his blueprint for state government finances in the future. The plan proposes additional cuts to state spending; key investments in things like a gas pipeline and education; adjustments to the way that revenues are deposited into the various state accounts to reduce volatility; reductions to the size of the Permanent Fund Dividend; and the implementation of new taxes and increases in certain existing taxes. It is intended that the amount of cuts and new revenues generated by the plan would largely close the existing gap between revenues and spending.

At this point, there appears to be a large divide between the governor and the legislative majorities on the specifics of the New Sustainable Alaska Plan, and on how much more the operating budget should be cut this session. It’s an election year, and that must always be factored into the process. It will be an interesting session to watch.

The House and Senate Finance Committees are already starting to work on the operating budget. University President Jim Johnsen has been asked to appear before the House Finance Committee on Monday, February 8 between 1:30 –3:30 p.m. to give committee members an overview on UA and its operating budget. We will keep you updated as budget hearings are added to the schedule.

Here are some reference guides for your information and use. As the legislature updates them in the next week or two, we will 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://akleg.gov/docs/pdf/commlist.pdf

 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 or visit www.alaska.edu/state .

End of First Session: Final Capitol Report of 2015

June 11, 2015

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

It has been 143 days since the 29th Alaska State Legislature gaveled in on January 20. After a 98-day regular session and two special sessions, the legislature is getting ready to adjourn after reaching an agreement on the FY16 operating budget.

The agreement obtained the three-quarters vote needed to access the Constitutional Budget Reserve (CBR). The CBR is the savings account that will be used to cover the estimated $3.2 billion deficit that the state will have in FY16. Prior to this agreement, the Senate was able to achieve a three-quarters vote but the House was not; the House minority refused to provide the necessary votes unless additional funding for certain items was added to the operating budget and the pay raises in the collective bargaining agreements were approved.

The operating budget that finally passed the legislature reduced UA’s budget from the FY15 level by $26.4 million. This cut is $5 million smaller than the $31.4 million cut that was on the table when the regular session ended on April 27. One of the demands of the House Minority was that UA’s cut be reduced by $5 million, and this demand became part of the final compromise.

The final operating budget also approved the collective bargaining agreements negotiated by UA and by the state, and it provided funding for pay raises for union and non-union employees. However, after providing additional money for the raises, the budget gave the executive branch (including the university) an unallocated cut in an amount equal to the amount of the raises. Basically, this means that no additional funds were provided to cover pay raises.

The cost of raises for UA’s union employees is approximately $8 million. The cost of raises for non-union employees is approximately $12 million.

The following intent language for the pay raises was added to the budget:

It is the intent of the legislature that the following appropriations be one-time increments to the operating budget. It is the intent of the legislature that there be no cost-of-living pay raises beginning with collective bargaining agreements negotiated in 2015.

It is the intent of the legislature that language in each of the negotiated collective bargaining agreements allow for the agreements to be re-opened if the oil price of Alaska North Slope West Coast reaches $95.00 and if that price is maintained or increases over that amount for a period of 60 consecutive days; this language shall be reviewed at the end of the three-year negotiated agreements.

It is the intent of the legislature that language in each of the negotiated collective bargaining agreements allow for the agreements to be re-opened if the oil price of Alaska North Slope West Coast falls below $45.00 and remains below that amount for a period of 60 consecutive days; this language shall be reviewed at the end of the three-year negotiated agreements.

There was also intent language relating to the unallocated reduction that was equal to the amount added for the pay raises:

It is the intent of the legislature that the unallocated reduction be implemented in a manner that results in a minimum number of state employee layoffs and that is geared toward finding internal agency and department efficiencies. It is the intent of the legislature that no supplemental funding be requested during the next regular session to fill the unallocated reduction.

You can find more information on the compromise budget bill (HB 2001) that was just passed here: http://www.akleg.gov/basis/Bill/Detail/29?Root=HB2001#tab6_4

The budget will now go to Governor Walker for signature or veto. The assumption is that he will sign it into law. With the passage of a fully-funded operating budget, there should be no additional special sessions on the budget this year.

---

For more information, contact Associate Vice President Chris Christensen at

cschristenseniii@alaska.edu

FY16 Budgets and Bills: Capitol Report May 1, 2015

May 1, 2015

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

Session Status

Ninety-seven days after it began, the First Session of the 29th Alaska State Legislature adjourned on April 27. This was one week later than scheduled. Immediately upon adjournment, Governor Walker called legislators into a special session to address issues that were not dealt with to the governor’s satisfaction during the regular session. Special sessions can last for up to 30 days.

The FY16 budget deficit was estimated to be $4 billion, assuming no cuts were made to the operating and capital budgets. The legislature passed FY16 operating and capital budgets during the regular session that contain approximately $800 million in cuts, meaning that the deficit for the next fiscal year will be about $3.2 billion. In other words, it is predicted that the revenues received by the state in FY16 will be $3.2 billion less than the level of spending that was just approved by the legislature.

With expenses that are $3.2 billion more than revenues, the legislature needed to access funds in the Constitutional Budget Reserve (CBR) to cover the gap. Keep in mind that unlike the federal government, the state can’t run a deficit; it can only spend as much as it has available either in revenue or in savings accounts.

The CBR is a savings account that had billions of dollars put into it when oil prices and production were much higher than they are now. The legislature can tap the CBR to fund the budget when revenues are less than expenses. The problem is that while the budget normally needs a simple majority vote in the House and the Senate to pass, taking money from the CBR requires a three-quarters vote. In the Senate, the operating budget did get a three-quarters vote to withdraw money from the CBR. Unfortunately, the operating budget did not get the three-quarters vote for the CBR in the House. This means that while an operating budget has passed the legislature, it is not fully funded; without accessing the money in the CBR, the state’s revenues and other savings accounts will run out sometime around September, and there will be no money to continue operating state government.

The House did not get the three-quarters vote to withdraw savings from the CBR because the House minority doesn’t agree with the cuts made in the operating budget. They want to add money back in some areas and reduce funding in other areas. Essentially, needing the CBR to fully fund the budget means that the House minority has influence over the final budget that it normally would not have. Governor Walker also does not like the final operating budget, and wants funds added back.

The assumption last week was that the legislature would return in special session sometime this summer, to try again to get the votes needed to access the CBR. However, Governor Walker doesn’t want the legislature to leave Juneau without fully funding the budget.

During a special session called by the governor, the legislature can only work on those items specified by the governor. Those items are the budget; HB 148, relating to Medicaid expansion; and HB 44, relating to sexual abuse and sexual assault prevention programs (commonly known as “Erin’s Law”).

Pending the results of the special session, the following is a summary of legislative action this session.

FY16 Operating Budget

The current fiscal year, FY15, is the third year in row in which the state has run a deficit and had to fund part of the budget by withdrawing money from savings accounts. Until now, the state has been able to use savings accounts that did not require a three-quarters vote, so there was no impasse while enacting the last three budgets.

When the legislature left Juneau in April of last year, it anticipated that the budget for FY15 would result in a $1.4 billion deficit. Then in September, oil prices collapsed. The deficit is now estimated to be $4 billion. As noted above, the estimated deficit for FY16 is $3.2 billion. The significance of these huge deficits is that the state’s savings accounts will only last for so long. A few years ago, it was estimated that the savings would cover deficits until FY23, by which time it was hoped that increased oil production or the building of a natural gas pipeline might result in a revenue increase. Now, the legislature is operating on the assumption that the savings accounts will be drained in less than three years, during FY18.

The FY16 unrestricted general fund budget for all-agency operations that was approved by the House and Senate is about $444 million less than the FY15 budget. The operating budget is contained in two bills, CCS HB 72 and CCS HB 73.

Unfortunately, UA’s operating budget was substantially decreased from the FY15 level. The legislature approved a UA operating budget for FY16 that includes a net reduction in unrestricted general funds from FY15 of $29.88 million, or 8.1 percent. The average agency cut in this budget is 9.9 percent. The cut is unallocated; UA can decide how best to spread it.

The budget bill that passed the legislature also rejected the monetary terms of all state and university collective bargaining agreements, removed funds from the budget that were intended to cover scheduled pay raises for union and nonunion employees, and prohibited agencies from using other money to pay for raises.

We did have success with the legislature in a few areas. The conference committee decided to provide UA with $1.86 million to continue funding the unmanned aircraft systems program at UAF. It also decided to reject House proposals to start the termination of the WWAMI collaborative medical school program at UAA.

The operating budget also included intent language that encourages state agencies to send research to UA, instead of sending it to other contractors:

It is the intent of the legislature that all state agencies and instrumentalities that intend to contract for basic or applied research, including consultation, undertaking a study, performing a needs assessment, or providing an analysis, pursue discussions and negotiations with the University's Vice-President for Academic Affairs and Research to determine if the University can provide that service to the agency, and if so, to obtain that service from the University unless contrary to the best interests of the State or contrary to another provision of law.

The operating budget passed by the legislature has not yet been submitted to the governor for signature or veto. With the start of the special session, the governor has submitted new budget bills to the House and Senate (HB 1001 and SB 1001) that have the practical effect of increasing the budget that already passed. The legislature has already redrafted the governor’s bills to make it easier to see what he wants to add to the already-passed budget. You can review the redraft of HB 1001 here: http://www.legis.state.ak.us/basis/get_documents.asp?session=29&docid=8530

Two items are significant for UA. First, the governor wants the legislature to add back $7 million to UA’s budget, to reduce the size of our cut from $29.88 million to $22.88 million. Second, the governor wants the legislature to approve the monetary terms of the collective bargaining agreements for all agencies, and put money in the budget to fund the pay raises that are in those agreements. The governor’s bill does not contain any funds to pay for the scheduled raises of nonunion state or university employees.

The legislature has recessed the special session until Tuesday, May 12, when all members are scheduled to return to Juneau. Next week, the House Finance Committee and the Senate Finance Committee plan to have several meetings on the governor’s new budget proposal. Senate Finance will meet in Juneau, and House Finance will meet in Anchorage.

FY16 Capital Budget

The capital budget (HCS CSSB 26 FIN AM H) that passed the legislature can be found here: http://www.akleg.gov/basis/Bill/Detail/29?Root=SB%20%2026

The FY16 capital budget has the smallest general fund component of any capital budget since 2001. Governor Walker’s capital budget proposed spending $158 million in general funds for capital projects, including $16 million for UA. $8 million would have been used for deferred maintenance, and $8 million would have funded additional construction on the new UAF engineering building.

The legislature cut the capital budget to $108 million in general funds, with only $3 million going to UA for deferred maintenance. No funding was provided for the UAF engineering building. Most of the unrestricted general funds in the capital budget were put there because federal matching money is available, and unfortunately UA’s projects have no federal match.

There is no proposal in the special session to add more money to UA’s capital budget.

Legislation

Many pieces of legislation that would directly or indirectly impact UA were introduced during the session. Any bill or resolution that did not pass prior to adjournment will remain in committee, to be considered next session. None of these bills can be heard during the current special session. Bills that passed the legislature will now be sent to the governor to be signed into law or vetoed. Resolutions are not subject to veto.

Once a bill has passed the legislature and is sent to the governor, he must sign it or veto it within 15 days if the legislature is in session (not counting Sundays) or within 20 days if the legislature is not in session (not counting Sundays). Typically, the legislature does not actually send bills to the governor for signature or veto immediately after passage. Instead, the bills are held for a period of time, sometimes for more than a month. This delay allows agencies extra time to review and recommend items for signature or veto.

These are the noteworthy bills and resolutions that were considered during the 2015 session:

HB 1 – STATE ARCTIC POLICY by Rep. Bob Herron

http://www.legis.state.ak.us/basis/get_bill.asp?session=29&bill=HB0001

Status: Passed the House and the Senate/currently waiting for action by Governor Walker

This bill declares the arctic policy of the State of Alaska. The policy includes “build(ing) 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 54 – UNIVERSITY INSTITUTES OF LAW AND MEDICINCE by Rep. Scott Kawasaki

http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20%2054

Status: Currently in the House Education Committee

This bill would authorize the university to establish a medical school at UAF and a law school at UAA. The bill was not introduced at the request of the university.

HB 63 – STUDENT LOAN INTEREST REDUCTIONS by Rep. Les Gara, Rep. David Ortiz, and Rep. Adam Wool

http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20%2063

Status: Currently in the House Education Committee

Currently, Alaskans pay interest rates of roughly 6.6% for new and outstanding student loans. This bill restructures Alaska student loans by reducing the interest rate charged on student loans for residents by 2.5%. The borrower must establish and maintain residency for one year prior to obtaining the loan, must maintain residency in Alaska while repaying the loan, and cannot be in default. The purpose of this legislation is to help encourage Alaska’s youth to remain in or return to Alaska following completion of their postsecondary studies, while relieving high debt burdens.

HB 80 – REPEAL COLLEGE/CAREER READINESS ASSESSMENTS by Rep. Lynn Gattis

http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20%2080

Status: Passed the House/currently in the Senate Education Committee

With the passage of HB 278 in 2014, all secondary students were required take the ACT, SAT or Work Keys exam to receive a high school diploma, at state expense. HB 80 removes the mandate for student college and career readiness assessment. Students who wish to be eligible for the Performance Scholarship or college admissions would still be able to take the tests, but would have to pay for the testing themselves.

HB 85 – STUDENT DATA AND ASSESSMENTS by Rep. Lora Reinbold

http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20%2085

Status: Currently in the House Finance Committee

Like HB 80, this bill repeals the mandate for student college and career readiness assessment. It also places restrictions on the collection and use of student data.

HB 107 – BOARD OF REGENTS REGIONAL RESIDENCY QUALIIFCATION by Rep. Lynn Gattis

http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20107

Status: Passed the House/currently in the Senate Education Committee

This bill changes the current at-large composition of the Board of Regents to a regional composition. Under the bill, the board would be composed of one student regent, four at-large regents, and six regents who are residents of specific regions of the state. This includes one each from the Municipality of Anchorage; the Fairbanks North Star Borough; the City and Borough of Juneau; the Kenai Peninsula Borough; the Matanuska-Susitna Borough; and a community not connected by road or rail to Anchorage or Fairbanks.

HB 176 – REPEAL STATE EMPLOYEE SALARY INCREASES by the House Finance Committee

http://www.legis.state.ak.us/basis/get_bill.asp?bill=HB%20176&session=29

Status: Passed the House and the Senate/currently waiting for transmittal to the governor.

This bill repeals the statutory salary increase that was scheduled to be granted to non-union state employees in FY16. This bill was companion legislation to the rejection of the union salary increase for state employees and university employees that was made in the operating budget bills (HB 72 and HB 73).

HB 211 – RETIREMENT INCENTIVE PROGRAMS FOR PUBLIC EMPLOYEES, TEACHERS by Rep. Scott Kawasaki

Status: Currently in the House State Affairs Committee

http://www.legis.state.ak.us/basis/get_bill.asp?session=29&bill=hb211&submit=Display+Bill

This bill authorizes PERS and TRS employers such as the university to set up a retirement incentive program for members of those retirement systems.

HCR 10 – MARITIME WORKFORCE DEVELOPMENT by Rep. Louise Stutes

http://www.legis.state.ak.us/basis/get_bill.asp?bill=HCR%2010&session=29

Status: Passed the House/currently in the Senate Rules Committee

This resolution recognizes the need for the Alaska Maritime Workforce Development Plan, the Alaska Workforce Investment Board and Alaska Vocational & Technical Education Center in Seward (AVTEC). It conveys support for the Alaska Maritime Workforce Industry Advisory Committee, whose guidance and leadership will be an integral component of the implementation of the Plan. HCR 10 encourages support and participation by various state agencies already tasked with the mission of workforce development, including the university.

SB 81 – UNIVERITY OF ALASKA BUILDING FUND; UNIVERSITY RECEIPTS by Sen. Pete Kelly

http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%2081&session=29

Status: Currently in the Senate Education Committee

SB 81 was introduced at the request of the university. UA is a land grant university, but it never received its land. For various legal reasons, the state will not be able to create, on its own, the type of permanent land endowment that universities in other states have been able to develop into significant revenue generators. SB 81 sets out a new model, Land Equivalency Grant for University Progress (LEG-UP). Patterned to some degree after the Public School Trust Fund, this bill would have an equivalent percentage of state resource development revenues (limited to those revenues flowing from future leases, sales, or other agreements) put into the University Building Fund (created under AS 37.05.555) , all subject to legislative appropriation authority.

SCR 9 - UA EDUCATION CREDIT FOR MILITARY TRAINING by Sen. Bill Stoltz by request

http://www.legis.state.ak.us/basis/get_bill.asp?bill=SCR%20%209&session=29

Status: Currently in the Senate Education Committee

This resolution encourages the University of Alaska to consider accepting upper division undergraduate credits awarded to members of the military and to veterans toward masters degrees.

SJR 2 – CONSTITUTIONAL AMENDMENT: STUDENT LOAN DEBT by Sen. Anna MacKinnon

http://www.akleg.gov/basis/Bill/Detail/29?Root=SJR%20%202

Status: Passed the Senate/currently in the House Education Committee

This resolution would put a constitutional amendment on the ballot in 2016. If the voters approve the amendment, it would allow the Alaska Student Loan Corporation to issue general obligation bonds, which would result in lower interest rates for student loans.

A Final Note

Many thanks to all who actively participated in advocating for the University of Alaska during the regular session. Whether you provided public testimony on budget initiatives or bills, wrote letters, sent emails, or met with legislators and staff, the collective actions of all encouraged legislators take actions that benefited the university. Going forward, we will keep you posted on the status of the special session and the final operating budget.

---

For more information, contact Associate Vice President Chris Christensen at

cschristenseniii@alaska.edu or visit www.alaska.edu/state/

 

 

Click HERE for the archive of 2015 Capitol Reports covering the first session of the 29th Legislature.


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.

Subscribe Now!

SupportUA Listserve

SupportUA-L is designed to keep UA advocates informed about the University's budget and other legislative matters.  To subscribe to this listserve, please click here!

Back to Top