Incoming Alaska Legislative Leaders Focus on Fiscal Plan

kasey-chen-1BY KASEY CHEN
Staff Writer, UAS Whalesong

After the formation of a new bipartisan majority caucus in Alaska’s House of Representatives, Rep. Bryce Edgmon of Dillingham was tapped to take the place of Republican Mike Chenault as Speaker of the House. Chenault has held the position since 2009, working with a republican led majority caucus. Democrats will take the places of Benjamin Nageak of Barrow and Bob Herron of Bethel, leaving three republicans and two independents left on the new Majority caucus, which consists of 22 members.

According to Edgmon, Alaska’s fiscal crisis will serve as a focus point for the caucus, and that the members of the new House Majority will work to address the fiscal crisis with the legislative agenda.

Rep. Edgmon is a graduate of the University of Alaska, receiving a degree in Business Administration from Anchorage. The same program was recently suspended at University of Alaska Fairbanks in an effort to meet the reduced budget. He is an Alaska native, and the first speaker of the Alaska House to come from native heritage. His experience in the UA system and position as one of the many rural lawmakers in key roles this session set up an expectation for his stance that he may not fulfill. Previously rural lawmakers have sought to either maintain or increase government services, but Edgmon is looking to create a more balanced plan.

Republican Rep. Paul Seaton, the recently appointed co-chair of the house finance committee, agrees with Edgmon on the need for the creation of a sustainable fiscal strategy. Seaton believes that the diversification of revenue be key in combatting the deficit. The new plan will rely on a broad-based tax that Seaton hopes will affect Alaskans less harshly than a Permanent Fund Dividend (PFD) reduction.

Republican Pete Kelly is the incoming President of Senate. The Republican-led majority is similar to the make-up of last session. Kelly is on board with the goal of closing the budget gap, but is cautious about implementing a tax. He worries that if the deficit is filled with taxes then the government will grow, resulting in another deficit. While Edgmon and Kelly have differing ideas on how to handle the budget, there is no ill will between the two. Their relationship, and the liaison between the House and Senate, will be significant in the ultimate decision on handling the deficit, since conflict between the two chambers has previously resulted in inaction. Last year, the senate declined to consider a broad based tax, and instead advanced a bill to draw from Permanent Fund earnings that was ultimately shot down by the House.

Gov. Bill Walker will release his new budget proposal in mid-December. His veto of the planned $666 million Permanent Fund Dividend received criticism from many members of the House and the Senate, including Sen. Bill Wielechowski who took Walker to court in an attempt to reverse the veto. The judge ultimately decided to uphold Walker’s decision to cut the fund, a choice he made in an attempt to preserve future dividends as well as to try and lessen the state’s deficit. Walker said he was forced to make the cuts since the Legislature failed to create a sustainable fiscal plan. Speaker Chenault was not in favor of the Governor’s decision saying, “I’m disappointed that the Governor ignored the public and the Legislature and continued with his veto of the dividend amount. Fiscal times are tough and I understand that, but Alaskans spoke and said this isn’t how we should fix the deficit. I imagine the Governor will reintroduce similar legislation during the 30th Legislature and we’ll have another discussion then. Until then, I remain disappointed that Alaskans are bearing the brunt of this cut.”

Rep. Edgmon’s reaction to the veto was not as negative as Chenault’s. In his newsletter, Edgmon took the veto as reinforcement for the need to create a strong fiscal plan that includes a restructuring of the permanent fund to pay for essential state services and PFDs as well as a possible state income tax and legislation aimed at reform of the tax credit program for oil and gas. Edgmon also emphasized a need for cooperation between the House and Senate as well as with Gov. Walker’s administration.

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