1. With the recent drop in oil process, the Legislature will face some tough decisions in 2015. What will be your top priorities for funding? Are there areas you think should be cut?
Rocky Knudsen, District 29: Schools need to be funded to the levels that local school districts can meet their budget needs.
Wasteful spending in the operating budgets must come an end.
Kurt Olson, District 30: I believe we should base our next three years of funding decisions on oil prices in the low $80 per barrel range. It will be less painful to err on the side of caution. I recommend starting with some strict limits on the capital budget. No non-essential capital projects for the next three years while giving highest priority to life and safety projects and infrastructure maintenance projects. Next, place a moratorium on existing large and mega projects, with the exception of those related to the gas line.
The operating budget will be more difficult. Each department should prioritize a list of all non-essential activities, unfilled positions and unspent funds. These lists would then be presented to the House and Senate budget subcommittees, who make recommendations to their full committees. They would then budget to reduce spending. Life, health and public safety should still remain our highest funding priority.
Shauna Thornton, District 30: The top priorities for funding will be education, job creation, and resource development. We need to have discussions where we “roll up our sleeves and working hard” to find solutions. While some might sit back and say that there is nothing that can be done is unacceptable. We need to work hard and be innovative, to keep the budget within manageable parameters. Common sense and working hard is something that I am not afraid of. After visiting constituents for the past six months I have gained far more insight to what is needed and will continue to listen.
Paul Seaton, District 31: We need to figure out how to do many things more efficiently in Alaska. Prisons/corrections is an example, we have one of the highest incarceration rates in the nation multiplied with the highest cost per person yet one of the highest re-offender rates. Health care is a similar situation – highest cost in the nation (world) yet we have measurably one of the least healthy populations. Status Quo produced these results so we need to change the incentive structures. We also need to terminate unrealistic and high maintenance cost projects – such as the Kodiak rocket launch facility, the Juneau road and the Knik Arm Bridge. Making tough decisions on which big capital projects to drop is necessary and must be weighed against the benefit to the state as a whole.
2. Are there steps the Legislature can take to diversify the state’s revenue stream?
Knudsen: The State of Alaska relies on Oil for most of our revenue. The State should act like the resource owner that it is, and partner with industry to ensure Alaska gets the maximum benefit of it’s resources.
Olson: It will be difficult when 90% of the State’s revenue comes from the oil and gas industry. I do not believe that the citizens of Alaska or the Legislature would consider an income tax, a State sales tax or raiding the Permanent Fund until such time as we have exhausted all reductions available in the existing capital and operating budgets. I would not support the fund sources outlined above without it being the will of the people of Alaska, either by referendum or the initiative process. I remember the public reaction to studded tire and alcohol taxes from years ago. The public expects us to be prudent and not over-react. Again, we need to look at this problem on at least a three year basis and handle this as if we are a family trying to live within our means rather than with a debit card that doesn’t run out of money.
Thornton: We as a state need to develop and diversify the state’s revenue stream, this can be accomplished by networking and identifying areas of potential growth and working hard to bring these potential new and added value revenue streams into fruition. Working together Alaskans can accomplish many more things, because we are innovative, resourceful, and determined as history shows. We will have to work proactively to achieve diversity in our revenue stream.
Seaton: Alaskans wanted revenue diversification measures passed in deficit years 2003-06 rolled back as soon as we had high oil prices and an oil tax structure that gave us a surplus. For example, the business tax was cut in half, the lowest gasoline tax in the nation was suspended, and vehicle registration fees were reduced. Oil taxes were just changed to preclude big surpluses if future oil prices spike so we cannot rely on balancing deficits with future surpluses. We are left to drastically cut budgets, reduce programs, use the ‘other earnings’ from the Permanent Fund after dividends are paid, institute a broad based tax or deplete our savings. Alaska now gets no revenue from job creation because there is no income, sales, state property tax or school tax. Hard choices when there is great resistance to any tax, and residents want to grow the Permanent Fund from it’s earnings.
3. Are there aspects of the state’s education policy you would like to address during the next legislative session?
Knudsen: First we should focus our efforts toward teaching our children how to problem solve, rather than the current policies of weighing heavy on testing.
We also need to focus recruiting, and retaining, the best educators. This can be more easily achieved by offering a defined benefit retirement plan.
Olson: There are several elements of our education policy that must be addressed during the next session. The first is revisiting the Area Cost Differential (ACD) issue. The ACD was used to levelize state funding across all school districts in Alaska, on a percentile basis, either above or below Anchorage. As it turned out, our district was on the losing end of this formula for a number of years. Ultimately, Speaker Chenault and I, along with several legislators from smaller districts, were able to recover a portion of the funds lost by this flawed formula.
The second issue is that of accountability. While we are blessed with a school administration and staff who are accomplishing much, even with reduced funding, there have a number of districts that appear to lack accountability. This issue needs to be addressed on a statewide basis.
We also need to consider the consolidation of smaller rural districts
Thornton: Working proactively and with common sense, we can forward fund so that educators do not constantly have to adjust and change. This is nothing different than for the corporate sector that would rather see plans for five to ten years head so that they can plan. Why, do we view educational needs differently? If there comes a time extra funding is available then it is possible to add to the budget. It is impossible to plan and retain good quality teachers, and staff facing a merry go round of funding that could drastically change from year to year. Educated communities are successful communities.
Seaton: We need to expand vocational/technical education — currently called Career Technical Education (CTE). About 70% of Alaskan students are not going to a four-year college so we should align our teaching strategies so they are relevant to students while meeting the standards. These are local district decisions but the state can offer help and incentives. I was disappointed that the administration eliminated the requirement that all high school students take the WorkKeys assessment with the level recorded on transcripts. We have struggled for years to enable schools, parents and employers to be able to know what high school diplomas from across the state mean. The Administration eliminated that by reversing the requirement for the single WorkKey assessment, allowing students to choose either of two other tests and not require any level of proficiency or record of scores. I hope we reverse that poor decision.
4. As a member of the Legislature, what can you do to help Alaskans deal with access to and the cost of health care?
Knudsen: Push to expand Medicaid for Alaska’s working poor. States like Kentucky have seen reductions in cost, by their expanded Medicaid programs. I believe Alaska could see the same results with a State-Based Marketplace health care.
Olson: As chair of the House Labor and Commerce Committee for eight years, I have access to a number of tools. I have been a member of the National Association of Insurance Legislators (NCOIL) which gives me access to the Labor and Commerce chairs from 42 other states. I have also been liaison between the Alaska Legislature and the National Association of Insurance Commissioners. Both groups are devoted to finding ways to fix the unintended consequences of the Affordable Care Act (ACA). Earlier this month I held a two day hearing on the upcoming 37% increases on certain groups of ACA programs. Many Alaskans were not able to keep their health plans, keep their doctor or receive a $2,500 reduction in our annual premium. Promises made in Washington DC were not kept. Although this is a federal issue we are doing what we can to stabilize and improve the situation.
Thornton: The key here is to expand Medicaid and to do what it takes to assist our community members access to good quality medical care available right here in our communities. Preventative and proactive health care services are needed to keep our community members healthy. While we have designed, and implemented many innovative and original programs for Veteran’s health care services. We need to do more, traveling outside or far distances, waiting for days, weeks, and months for care should be a last resort not a first resort, when there is good quality care right in their communities.
Seaton: The cost of healthcare must be addressed by improving the health of Alaskans. In 2011 the legislature unanimously passed House Concurrent Resolution 5 calling on the Governor to adopt “prevention of disease as a primary model of healthcare.” HCR5 cited 35 studies indicating if Alaskan’s vitamin D levels were above 30 ng/ml instead of below the national average of 22 we would lower by 50% respiratory infections, significantly reduce cancer rates, etc. Unfortunately, the administration has not taken any initiative to implement the legislative request other than make vitamin D blood tests available free to employees. New studies and clinical trials demonstrated that up to 90% of diabetes and 82% of breast cancer could be avoided with blood levels of 50ng/ml and higher. My HB356 demonstrated that lowering the incidence of disease among employees and retirees would reduce the PERS/TERS unfunded liability by 6 billion dollars. It passed the House.
5. Will you pre-file any bills for the 2015 session? On what issues?
Knudsen: No.
Olson: I will be pre-filing a number of bills for the 2015 legislative session, many of which I have been working on for several years. Most of these pieces of legislation will be related to workers compensation reform; including return to work, drug dispensing and drug misuse issues. I expect to have legislation regarding oil and gas issues but these may not be ready in time to meet the pre-filing deadline. Also, I plan to address consumer protection and professional licensing issues. It is always my intent to make government more efficient for the public. I would be delighted to discuss these bills with the Clarion after they have been pre-filed and before the beginning of the next session. It would be premature and possibly counter-productive to open them up for discussion before they have been pre-filed.
Thornton: I am sure I will. However, I will need to assess what our needs are after elected and get to work. Which I have plans to do the day after elections. When elected I believe that the work is year round not just during the legislative session or a few months a year.
Seaton: I will re-introduce HB356 — saving $6 billion in future expense is imperative. I will continue to push for voluntary improvement in health for all Alaskans. The new vitamin D studies show drastic reduction in hospital infections, better recovery from trauma, half the risk of Alzheimer’s, lower preterm births, 1/3 the amount of severe/moderate language impairment to kids entering school, 70% fewer respiratory tract infections, 80% reduction in gingivitis and fewer dental carries. Our citizens need to know the latest research on how to stay healthy — especially when it costs only $10 per person per year.
I will also be reintroducing the aquatic and marine invasive species bill to prepare for rapid response to new outbreaks. Preparation will save our streams and productive coastal areas from huge impacts and huge future response costs.
