Haines’ representatives in the state legislature plan to prioritize ferry service and education funding in the upcoming legislative session, they told the CVN this week.
But their ability to pass their agenda will depend on how leadership in the Alaska House of Representatives shakes out, which might not be determined for several weeks. The eventual makeup of the House majority will break a tie between re-elected Republican Gov. Mike Dunleavy and a bipartisan Senate coalition — comprising nine Democrats and eight Republicans — that formed after last month’s elections.
The House is evenly split between two factions, and the deadlock “shows no sign of a quick resolution,” Alaskan journalist Nat Herz reported this week in his newsletter Northern Journal. Two vote recounts in tight races and an ongoing lawsuit over a House Republicans eligibility to hold public office could tip the balance.
Sen. Jesse Kiehl, a Juneau Democrat who has represented Haines’ district for four years and ran uncontested in November, said he was “very excited” about the centrist majority in the Senate.
“There is a huge spectrum of political philosophies inside this coalition, from some very conservative people to some pretty liberal ones,” he said. “The way it has been put together is just about straight down the middle, even-steven. What that’s going to let us do is stop worrying about whose team is winning and just work on the issues.”
Kiehl said his priorities are the same as they were last year: ferries, education and fiscal policy. He said “there’s a lot of agreement” among his Senate colleagues that more needs to be done for education in the coming year. Schools got a one-time infusion of $57 million from the state last year but a bill costing the same amount to permanently increase the base student allocation (BSA) — the amount of money multiplied by student numbers to determine how much state funding each district gets — failed to pass.
In the past decade, Alaska’s urban consumer price index rose by 17.8% but the BSA increased by only 4.4%, according to a recent Anchorage Daily News report.
“This coming year we’ve got to do significantly more for education funding. Our schools are losing ground,” Kiehl said.
Rep. Andi Story, who ran uncontested in a House district that was redrawn last year to include Haines, also said she wants to increase education funding by permanently increasing and inflation-proofing the BSA.
She also, like Kiehl, supports reforming the state’s fiscal policy. For years lawmakers have debated how to divide permanent fund withdrawals between dividends for individual Alaskans and spending on public services.
“It’s really important that we protect our nest egg, our Permanent Fund, and not overdraw our earnings reserve and give a robust permanent fund dividend,” Story said.
Kiehl, who has served on a fiscal policy working group in the Senate, said he favors a plan to divide annual Permanent Fund withdrawals 50/50 between dividends and the government. Last year he also proposed establishing a state income tax and is “considering whether to reintroduce it” this year, he told the CVN this week.
He said it would be a “small tax” geared as a gradual transition away from a revenue structure dependent on oil prices. A bill Kiehl introduced last year included a tax at 2.75% of taxable income in the first year, climbing to 3.75% within three years.
“If we wait until a crisis, it will be excruciating,” he said. “Short-term (with high oil prices), there’s some money. Long-term, we have all the same problems. It’s extremely difficult to get people to make the transitions that will help us in the long term. They hurt a lot less if you make them small and gradually,” Kiehl said.
With regards to the ferry system, Kiehl said the upcoming session would involve a lot of educating new legislators, most of whom don’t come from communities on the marine highway system.
The federal infrastructure bill passed last year includes $209 million for ferry service for rural communities and an additional $35.6 million for construction of new Alaska ferries. Kiehl said the state now has enough money to provide reliable service to communities like Haines but staffing remains an issue.
“We have more money than service because we don’t have crew to run vessels,” Kiehl said. “That’s a direct result of the cuts to the ferry system of the governor’s first two years, followed by the ‘Great Resignation,’” he said. The Alaska Department of Transportation, for example, for two months delayed scheduling winter sailings to Haines on the Tazlina ferry due to difficulty hiring crew.
Both Kiehl and Story also said they hoped to secure funding for capital projects like Haines’ public safety building and school locker room renovation, but whether those projects will be funded depends in part on the size of the state’s capital budget.
A budget proposal from Gov. Dunleavy is due by Dec. 15.