Capitol Report 2015

May 27, 2015

The Capitol Report

By Chris ChristensenAssociate Vice President for State Relations

At the time of this posting, the legislature is in its second special session, following the adjournment of the regular session on April 27 and the adjournment of the first special session on May 21. The operating budget bills (HB72 & HB73) passed the House and Senate during the regular session on April 27 and were transmitted to the Governor on May 1. The budget proposed spending $5 billion, but the state is only expected to receive $2 billion in revenues. To make up the $3 billion difference, the legislature needed to withdraw funds from the Constitutional Budget Reserve (CBR). The CBR is a savings account that requires a three-quarters vote of the House and of the Senate to access, rather than a simple majority. The Senate was able to attain a three-quarters vote, but the House was not; members of the House minority refused to provide the votes needed to reach three-quarters. This meant that the budget that was passed was not fully funded, and the money to pay for state government operations would run out sometime in the late summer or early fall. There was an expectation that the legislature would call itself into special session later in the summer, to try again to get the three-quarters vote.

Instead, Governor Walker called the legislature into its first special session on April 28 to address the underfunding and several other significant policy issues. Public hearings and private negotiation have been taking place since then, in an effort to attain the three-quarters vote needed to fully fund the operating budget.On May 19, 2015, Governor Walker vetoed most of the FY16 operating appropriations contained in HB 72. He reduced the budget to the $2 billion level to match available revenues and focused available state funding on health, life, safety and debt service obligations. The impact to the University of Alaska was a state appropriation reduction of $242.5 million from the amount included in HB72. This is a reduction of approximately 72 percent.

During the current special session, the legislature is considering bills that would add the vetoed money back to the budget, as well as negotiating to get the three-quarters vote needed to fully fund these add-backs. No one knows when these issues might be resolved.

May 1, 2015

The Capitol ReportBy Chris ChristensenAssociate 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.

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For more information, contact Associate Vice President Chris Christensen at

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

April 13, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations

Today is the 84th day of the legislative session, and we have only one week until adjournment. The Conference Committee on the operating budget has started reconciling the differences between the House and Senate versions, and plans to finish its work by Friday. The Senate passed a capital budget last Saturday, and the House Finance Committee started working on the capital budget today. The House will take several hours of public testimony on its capital budget tomorrow, April 14, from 6:00 p.m. to 8:30 p.m. This will be the last opportunity for UA advocates to testify on a budget bill this session.

Operating Budget The Conference Committee started working last Friday to put together a final operating budget. The differences between the university's House and Senate operating budgets were detailed in the April 3 Capitol Report. The Conference Committee is made up of three House members (House Finance Co-Chair Mark Neuman, House Finance Co-Chair Steve Thompson, and House Finance minority member Les Gara) and three Senate members (Senate Finance Co-Chair Pete Kelly, Senate Finance Co-Chair Anna MacKinnon, and Senate Finance minority member Donny Olson). Traditionally, the Conference Committee meets for a half-hour or so each afternoon during the session's final week, and the members put the legislature's final operating budget together by compromising on the different levels of funding in the House and Senate versions. When the committee finishes its work, the budget will be sent to the full House and Senate for approval, and then sent to the governor who can approve or veto individual appropriations. Senate Capital Budget Governor Walker sent a very small capital budget to the legislature. It contained only $158 million in unrestricted general funds, and $16 million of that total was proposed for the university: $8 million for deferred maintenance, and $8 million (of the $31 million needed) to continue construction of the new UAF engineering building. The Senate reduced this capital budget dramatically, to only $113 million. This is the smallest capital budget since 2001. It now contains only one item for the university: $3 million for deferred maintenance. The remaining $5 million for deferred maintenance recommended by the governor, as well as all $8 million proposed by the governor for the UAF engineering building, were removed. More information about the capital budget bill, SB 26, can be found at http://www.akleg.gov/basis/Bill/Detail/29?Root=SB%20%2026

House Capital Budget

The House Finance Committee began its work on the capital budget today. Tomorrow, April 14, it will take public testimony, and then it will finalize its version of the capital budget by Friday.

Testimony will be taken in Juneau and by teleconference at local Legislative Information Offices (LIO). You can find the location of your LIO here: http://w3.legis.state.ak.us/misc/lios.php. Please arrive at your LIO or call in by 8:00pm or testimony will close early. Please call 465-4648 to obtain the off-net call-in phone number. Off-Net call-in is reserved for communities without an LIO. Legislators WANT to hear from their constituents. They will listen intently and take notes on what is said and what budget items have the most support. The more university advocates who testify on the capital budget, the better.

What should you say? You can speak about projects that are in the Senate’s budget, or projects that didn't make the cut. You will have three minutes to make your case.

Identify yourself by giving your name and affiliation and your House District, if you know it.
State why you are testifying.
Pick two or three bullet points about the importance of the project.
Then tell your own story!

If you can't testify, please send written testimony to the House Finance Committee via lhscfin@akleg.gov , or email individual members of the committee, letting them know what you would have said if you had been there. Be sure to thank them. The members are: Representative Mark Neuman, Co-Chair, (R) Big Lake Representative Steve Thompson, Co-Chair, (R) Fairbanks Representative Bryce Edgmon, (D) Dillingham Representative Lynn Gattis, (R) Wasilla Representative Cathy Munoz, (R) Juneau Representative Lance Pruitt, (R) Anchorage Representative Dan Saddler, (R) Eagle River Representative Tammie Wilson, (R) North Pole Representative Les Gara, (D) Anchorage (minority member) Representative David Guttenberg, (D) Fairbanks (minority member) Representative Scott Kawasaki, (D) Fairbanks (minority member) Thank you for your support!

April 3, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations

Today is the 74th day of the legislative session, and we have only 16 days to go until adjournment on Sunday, April 19. The Senate Finance Committee completed its work on the operating budget yesterday, and the full Senate will pass that budget today. Once the budget has passed the Senate, that body will begin working with the House to reconcile the differences between their respective versions. Before that process starts, the Senate Finance Committee will take up the capital budget, beginning with public testimony on Monday.

Senate Operating Budget

As reported last week, the Senate’s University Budget Subcommittee sent a recommendation on UA’s budget to the full Senate Finance Committee. The subcommittee proposed reducing the size of the cut made by the House from $25 million to $20 million. The subcommittee also proposed adding $1.86 million to UA’s budget to continue funding the Alaska Center for Unmanned Aircraft Systems Integration (ACUASI), for a net cut of $18.14 million. The effect of this was to give UA a 4.9 percent net cut from the current year’s budget. Of the 18 agency budgets (UA, the 14 executive branch departments, the Office of the Governor, the legislative branch, and the judicial branch), the average cut recommended by the subcommittees was 8.3 percent.

The full Senate Finance Committee made two negative changes to this proposal. First, instead of reducing the House’s net cut from $25 million to $18.14 million as our subcommittee recommended, the committee reduced the net cut somewhat less, from $25 million to $20 million.

The second negative change made by the Senate Finance Committee was actually done to every agency, not just to UA: the committee rejected the negotiated FY16 pay raises that were contained in all of the state’s collective bargaining agreements, including those of the university. It also deleted all funding that was in every agency budget for FY16 salary increases for union and non-union employees. The committee made it clear that it viewed this as an action to prevent layoffs and save jobs. The savings for the state in FY16 will be about $30 million in unrestricted general funds, and an additional $26 million in other funds.

UA had just over $10 million in unrestricted general funds in the House-passed budget to fund salary and benefit increases for FY 16. This money was backed out of UA’s budget, giving it a total general fund net cut of about $30 million, or 8.1 percent.

Senate Capital Budget

The capital budget for the university that Governor Walker sent to the legislature included $8 million for deferred maintenance, and $8 million of the $31 million needed to finish the new UAF engineering building. As previously noted, the governor submitted an extremely small capital budget this year ($158 million) and the capital budget is likely to remain small because of the budget deficit. There are complaints that UA should not get 10 percent of what’s available. Almost all of the money in the governor’s capital budget is for projects that have a large federal match (some construction projects will bring in up to $10 from the federal government for every dollar spent by the state), and UA’s projects don’t bring in any federal dollars.

The Senate Finance Committee will take public testimony on the governor’s capital budget on Monday, April 6. This may be the only opportunity for public advocacy on the capital budget, and it is important that senators hear about the need for the university’s projects. Here is the information posted by the committee:

- Public testimony may be limited to no more than 2 minutes.- 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 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 Senate Finance Committee via finance.committee@akleg.gov- If you are calling from a community without a Legislative Information Office, i.e., an “Offnet” caller, only call during the designated Offnet time period at 7:00 pm. Please call 465-4648 to obtain the call-in phone number.

9:00 am Anchorage10:00 am Kenai, Seward, Homer11:00 am Mat-Su, Glennallen, Delta Junction1:30 pm Barrow, Ketchikan, Wrangell, Petersburg2:30 pm Sitka, Cordova, Valdez3:30 pm Juneau4:30 pm Fairbanks, Tok5:30 pm Bethel, Nome, Kotzebue, Unalaska6:30 pm Kodiak, Dillingham7:00 pm Statewide Teleconference - Offnet Sites

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

If you can't testify, send an email to the members of the Senate Finance Committee, letting them know what you would have said if you had been there. Be sure to thank them. The members are:

Senator Pete Kelly, Co-chair (R-Fairbanks)http://new.akleg.gov/legislator.php?id=KEP

Senator Anna MacKinnon, Co-chair (R-Eagle River)http://new.akleg.gov/legislator.php?id=MAI

Senator Peter Micciche, Vice-chair (R-Soldotna)http://new.akleg.gov/legislator.php?id=MHE

Senator Click Bishop (R-Fairbanks)http://new.akleg.gov/legislator.php?id=BIS

Senator Mike Dunleavy (R-Wasilla)http://new.akleg.gov/legislator.php?id=DNL

Senator Lyman Hoffman (D-Bethel)http://new.akleg.gov/legislator.php?id=HOF

Senator Donny Olson (D-Golovin)http://akleg.gov/legislator.php?id=ols

The committee will probably pass out a capital budget late next week, and send it to the Senate floor. The House Finance Committee will take it up when it passes the Senate.

Thank you for all your work to promote and support the University of Alaska!

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

March 27, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations

Today is the 67^th day of the legislative session. Barring an extension or a special session, we have only 23 days left until adjournment.

Since the last Capitol Report was posted, a great deal has happened in Juneau. The House passed an operating budget on March 12, and sent it to the Senate a few days later for consideration by that body. On March 25, after reviewing the House’s budget proposal, the Senate’s University Budget Subcommittee forwarded its recommendations on UA’s operating budget to the full Senate Finance Committee.

House Operating Budget

As previously reported, the House decided to substantially reduce the FY 16 general fund operating budget for all state agencies. State agency operations were cut from the current fiscal year by about $229 million, with an average cut to agencies of 10 percent. Cuts were also made to formula programs such as Medicaid and K-12 funding for local school districts. The total operating reductions made by the House from the level of funding in the current year is about $377 million, or 8.4 percent. Unfortunately, this is just a fraction of next year’s projected deficit of over $3 billion. Cutting enough money from the budget to cause real pain to people and programs does not fix the state’s budget problems. UA’s cut in the final House operating budget was $25 million from the current fiscal year, or 6.7 percent.

Senate Operating Budget

After receiving the House’s operating budget proposal, the Senate began work in earnest on its version. Members of both the House and the Senate majorities have told the press that the Senate will make further cuts to the operating budget, and not add money back to the House version. This was bad news for other agencies. Fortunately, it does not appear that UA’s budget will suffer additional reductions in the Senate.

Two days ago, the Senate’s University Budget Subcommittee completed its work and sent a recommendation on UA’s budget to the full Senate Finance Committee. The subcommittee proposed reducing the size of the cut made by the House from $25 million to $20 million. The subcommittee also proposed adding $1.86 million to UA’s budget to continue funding the Alaska Center for Unmanned Aircraft Systems Integration (ACUASI). ACUASI was established in 2012 by the Board of Regents in recognition of the importance and growth of the unmanned aircraft program. ACUASI operates one of the six test sites established by the 2012 FAA Modernization and Reform Act, and is considered the national leader in civilian unmanned aircraft systems research and development.

The net cut from the current fiscal year proposed by UA’s Senate subcommittee is approximately $18.14 million in general funds. This is twice the cut that was proposed by Governor Walker, but it is substantially less than the $53 million cut that our House subcommittee chair, Rep. Tammie Wilson, originally proposed as UA’s target. It was difficult for the Senate subcommittee to lessen UA’s cut when the Senate is increasing the House cuts for many other agencies, and we are grateful for their willingness to help us as much as they did.

One significant budget decision made by the House is not contained in UA’s operating budget, but it still is very important to us. The WWAMI program is funded in the budget of the Department of Education and Early Development (DEED). WWAMI is a collaborative medical school among universities in five northwestern states (Washington, Wyoming, Alaska, Montana, and Idaho) and the University of Washington School of Medicine (UWSOM). Each state participating in WWAMI partners with UWSOM to educate a fixed number of medical students from and for their state. This state-funded program currently has 20 seats per year reserved for Alaskans at UWSOM. UWSOM is a top-10 medical school, and other than the WWAMI applicants, it only admits 10 out of 6900 non-resident applicants each year. Twenty Alaskans enter the program annually, and each year 17 WWAMI graduates come to Alaska to practice after completing their education. Alaska has a shortage of doctors, and WWAMI has demonstrated a tremendous return on investment. Those Alaskans who choose not to return after graduation must repay the state for the tuition paid on their behalf. Much of the medical training is done at UAA and during clinical rotations at Alaskan medical facilities, and over 71% of the state money used for this program is actually spent in Alaska, not in Washington.

Unfortunately, the House adopted language in DEED’s budget that instructs it to give notice of termination of participation in the WWAMI program. The program requires three years’ notice of termination, and the program will be shut down by June 30, 2020. This portion of the House’s budget is controversial in the Senate, and there are a number of Senators who want to delete the language. There are others who think that the state needs to make cuts even to programs as valuable as WWAMI. This morning, the DEED budget subcommittee recommended that the House language be deleted from the budget, and that WWAMI continue accepting new students.

Hopefully, the full Senate Finance Committee will accept this recommendation. At this time, we anticipate that it will.

Other things proposed by the DEED subcommittee that will affect UA include:

Accepted a decrease of $300.0 Unrestricted General Funds for the Alaska Native Science and Engineering Program.
Decrease $850.0 Unrestricted General Funds for the Alaska Learning Network, eliminating the program.
Decrease $1,000.0 Unrestricted General Funds in addition to the $300.0 decrease recommended in the Governor’s budget for the Alaska Native Science and Engineering Program, leaving $1,660.0 state support for the program.
Decrease $1 .100.0 Unrestricted General Funds for the Statewide Mentoring Program, eliminating the Coaches Mentor Program for principals.
Decrease $761 .8 Unrestricted General Funds for the Online with Libraries Program, eliminating the program.
Add intent language to read as follows: “It is the intent of the legislature that the Alaska Student Loan Corporation reduce operating expenditures by the Alaska Commission on Postsecondary Education with the goal of generating a dividend to the state in FY17.”

The Next Step

The full Senate Finance Committee will review the recommendations of all the agency subcommittees, and can decrease them, increase them, or leave them unchanged. Before it makes any decisions, it will take public testimony next week on Monday, March 30 and Tuesday, March 31. This is the annual opportunity for advocates to have their voices heard by the Senate. 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 than to the House’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.

Here is the information you need to testify:

Statewide Public Testimony - Public testimony may be limited to no more than 2 minutes.- 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 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 Senate Finance Committee via finance.committee@akleg.gov-**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 Tuesday. Please call 465-4648 to obtain the call-in phone number.

Monday, March 30:1:30 PM Juneau3:00 PM Bethel, Nome, Kotzebue, Unalaska5:00 pm Barrow, Tok, Delta Junction5:30 pm Ketchikan, Wrangell, Petersburg6:00 pm Sitka, Cordova, Valdez

Tuesday, March 31:9:00 AM Anchorage10:30 AM Glennallen, Seward, Homer1:30 PM Fairbanks, Mat-Su2:30 PM Kenai, Kodiak, Dillingham3:30 PM Statewide Teleconference – **Off Net Sites (locations without a Legislative Information Office)

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

If you can't testify, send an email to the members of the Senate Finance Committee, letting them know what you would have said if you had been there. Be sure to thank them. The members are:

Senator Pete Kelly, Co-chair (R-Fairbanks)http://new.akleg.gov/legislator.php?id=KEP

Senator Anna MacKinnon, Co-chair (R-Eagle River)http://new.akleg.gov/legislator.php?id=MAI

Senator Peter Micciche, Vice-chair (R-Soldotna)http://new.akleg.gov/legislator.php?id=MHE

Senator Click Bishop (R-Fairbanks)http://new.akleg.gov/legislator.php?id=BIS

Senator Mike Dunleavy (R-Wasilla)http://new.akleg.gov/legislator.php?id=DNL

Senator Lyman Hoffman (D-Bethel)http://new.akleg.gov/legislator.php?id=HOF

Senator Donny Olson (D-Golovin)http://new.akleg.gov/legislator.php?id=HOF

The committee intends to amend the operating budget later in the week, and it will then send the budget to the Senate floor for a vote.

Once the budget has passed the Senate, a conference committee made up of three members of the Senate and three members of the House will be appointed. The conference committee will have the job of reconciling the different versions of the budget passed by the House and Senate. The university could end up with the House budget, the Senate budget, or somewhere in between.

Legislation

Today, the House Education Committee had its second hearing on HB 107, "An Act relating to the composition of the Board of Regents of the University of Alaska." This bill was introduced by Rep. Lynn Gattis of Wasilla. Currently, the 11-member Board of Regents has one student member and 10 at-large members. HB 107 would change the composition of the board so that it would have one student member, four at large members, and six members who are residents of specific areas: the Municipality of Anchorage, the Fairbanks North Star Borough, the City and Borough of Juneau, the Kenai Peninsula Borough, the Matanuska-Susitna Borough, and another area that is not connected by road or rail to Anchorage or Fairbanks.

There was an additional amendment proposed at the meeting to decrease the size of the board from 11 members to nine.

Board Chair Jo Heckman testified by audio conference. She stated her view that the bill would create constituencies and promote regionalism on the board; that limitations on the governor’s constitutional authority to appoint the board members of his choice might be subject to legal challenge and call into question board action; and that a reduction in the number of board members would have fewer members sharing the same amount of work, and make it more difficult to get a quorum to do business.

The committee did not adopt the amendment to reduce the size of the board, but they passed out a bill version changing the board’s composition. Its next committee of referral will be the Rules Committee, which will schedule the bill for a floor vote. You can read more about the bill at this link: http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20107#tab1_4

March 12, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations

Today is the 52^nd day of the legislative session. We have passed the session’s midpoint, and the House Finance Committee amended the operating budget yesterday. Today, the full House is planning to debate and pass the operating budget and then send it to the Senate for consideration.

House Budget:

Two weeks ago, the House’s University Budget Subcommittee, chaired by Rep. Tammie Wilson, took the $9.3 million general fund cut proposed for UA by Governor Walker and increased it to a $35 million cut. Note that there is a budget subcommittee for each executive branch department, as well as for UA and the judicial and legislative branches. Each one reviews the governor’s operating budget proposal for its department and makes a recommendation for cuts or additions. The subcommittee recommendations are then rolled into a new budget bill, which is considered by the House Finance Committee.

On Tuesday, the House Finance Committee spent over six hours hearing amendments to this operating budget bill. A total of 81 amendments were offered by committee members, and many of them were debated at length. Some of the amendments proposed adding money back to the budget, and some suggested making additional cuts. Several of the amendments proposed making smaller cuts to UA than those proposed by our subcommittee. By the end of the meeting, UA's cut had been reduced by $10 million. This still leaves us with a cut from the current year of about $25 million, but that is better than the $35 million cut recommended by the subcommittee, and substantially better than the $53 million cut that Rep. Wilson originally proposed.

The House Finance Committee has 11 members. The amendment to restore $10 million to UA’s operating budget passed on an 8-3 vote. The eight members who voted for UA were:Rep. Mark Neuman, Co-Chair (R - Big Lake)Rep. Steve Thompson, Co-Chair (R - Fairbanks)Rep. Dan Saddler, Vice-Chair (R - Eagle River)Rep Bryce Edgmon (D - Dillingham)Rep Cathy Muñoz (R - Juneau)Rep. Les Gara (D - Anchorage)Rep. David Guttenberg (D - Fairbanks)Rep. Scott Kawasaki (D - Fairbanks)

The three members who voted against restoring $10 million to UA’s budget were:Rep. Lynn Gattis (R - Wasilla)Rep. Lance Pruitt (R - Anchorage)Rep. Tammie Wilson (R - North Pole)

The committee’s final bill version reduced the general fund budget for state agency operations by almost $229 million from the level in the current fiscal year. UA’s cut from the current year is about 6.7 percent. The average agency cut was 10 percent. The cuts ranged from a low of 3.7 percent at the Department of Public Safety, to a high of over 30 percent at the Department of Education and Early Development and the Department of Commerce, Community and Economic Development.

Cuts were also made to formula funds, not just to agency budgets. Formula funds are appropriations distributed to beneficiaries according to a statutory or regulatory formula, such as Medicaid payments and K-12 funding for local school districts. If you add the formula fund cuts to the agency budget cuts, the reductions to the state operating budget totaled almost $377 million. This is an 8.4 percent reduction from the current general fund operating budget.

These cuts sound huge. Keep in mind, however, that even with these reductions, the state is projecting a multi-billion dollar deficit next year. Because of this, we will probably see big cuts again next session.

In addition to putting money in the budget, House Finance also added intent language that will benefit the university:

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.

Co-Chair Mark Neuman said that he decided this language was needed when he saw work that was done for a department by a university located in another state. In this budget environment, he doesn’t think that state agencies should be sending work out of Alaska, if UA is capable of handling it.

House Finance also added this intent language to the budget bill:

It is the intent of the legislature to have the University of Alaska focus the majority of additional decrements through reduction in management positions from below the chancellor level through the levels of: Associate Deans; Vice, Assistant, and Associate Vice Provosts; Vice, Assistant, and Associate Vice Chancellor; and Shaping Alaska’s Future staff.

Senate Budget:

The Senate Finance Committee also has budget subcommittees, and many will start working next week after the Senate receives the House’s version of the operating budget. UA’s subcommittee will have its first meeting on Monday, March 16 from 3:30 – 4:30 p.m. The Senate will take a long look at the budget passed by the House, and it could make more cuts or add money back. The members of UA’s subcommittee are:

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

This Week:

This week, we had two other meetings of interest. UA is required by law to submit a report to the legislature documenting its efforts and degree of success in training teachers and in assisting Alaska school districts to attract and retain qualified teachers. The Senate Education Committee received this year’s report at its meeting on Tuesday, and the House Education Committee received the report at its Wednesday meeting. Presenting were Regent Jo Heckman, Regent Mike Powers, and Dr. Steve Atwater, the Associate Vice President for K-12 Outreach.

Next Week:

On Monday, March 16, the House Education Committee has invited the Chair of the Board of Regents, Jo Heckman, to speak about UA’s funding priorities in a time of budget cuts. Regent Heckman will be on audio, and President Pat Gamble and Chancellor John Pugh will attend in person. The meeting runs from 8:00 – 10:00 a.m.

As noted above, the university’s first Senate Budget Subcommittee meeting will be on Monday from 3:30 – 4:30 p.m. President Gamble has been asked to provide an overview to the subcommittee.

On Tuesday at 9:00 a.m., President Gamble will appear before the Senate Finance Committee to give a presentation on the university’s capital budget. Governor Walker has submitted an extremely small capital budget this year ($158 million), and his budget proposes appropriating $16 million of that for UA: $8 million to continue work on the UAF engineering building project, and $8 million for deferred maintenance projects. The capital budget is likely to remain small because of the budget deficit, and there are complaints that UA should not get 10 percent of what’s available. Almost all of the money in the capital budget this year is for projects that have a large federal match (some construction projects will bring in up to $10 from the federal government for every dollar spent by the state), and UA’s projects don’t bring in any federal dollars.

On Wednesday, the House Education Committee will have a hearing on HB 107, "An Act relating to the composition of the Board of Regents of the University of Alaska." This bill was introduced by Rep. Lynn Gattis of Wasilla. Currently, the 11-member Board of Regents has one student member and 10 at-large members. HB 107 would change the composition of the board so that it would have one student member, four at large members, and six members who are residents of specific areas: the Municipality of Anchorage, the Fairbanks North Star Borough, the City and Borough of Juneau, the Kenai Peninsula Borough, the Matanuska-Susitna Borough, and another area that is not connected by road or rail to Anchorage or Fairbanks. You can read more about the bill at this link: http://www.akleg.gov/basis/Bill/Detail/29?Root=HB%20107#tab1_4

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@alaska.edu.

Click here to download a overview of the budget process timeline: http://www.alaska.edu/files/state/Vertical-Budget-Interactive---Final-3-9-15.pdf

March 4, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations

Additional Opportunity to Testify on the Operating Budget

Last Friday’s Capitol Report (read it here: http://www.alaska.edu/state/report/ ) contained the House Finance Committee’s schedule for taking public testimony on the operating budget. The committee has just added one additional time slot for advocates around the state to call in, if they were unable to make it to their local Legislative Information Office to testify. Here is the information that was posted on the additional opportunity:

Thursday, March 56:00-9:00 p.m.Statewide Offnet (testimony via phone)

The meeting time has been extended to accommodate anyone who wishes to testify in any area of the state who did not previously testify. Please call 465-4648 or 465-6258 for the call-in phone number.

All Off Net callers are required to hang up immediately after your testimony is taken to keep as many lines open as possible for other callers. Testifiers can continue to access the meeting on your computer through akleg.gov, click on Alaska State Legislature and then choose the "Live Now" button or televised on Gavel to Gavel, check listings.

Public testimony limited to 2 minutes each.

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@alaska.edu

February 27, 2015

The Capitol ReportBy Chris ChristensenAssociate Vice President for State Relations Today is the 39^th 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.

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 Representative 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. _______________________________________________ SupportUA-L mailing list SupportUA-L@lists.alaska.edu To unsubscribe from this list, please visit: https://lists.alaska.edu/mailman/listinfo/supportua-l (description)

February 13, 2015

The Capitol ReportBy Chris ChristensenAssociate 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 atcschristenseniii@alaska.edu or visit www.alaska.edu/state .

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

_______________________________________________

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January 30, 2015

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

Today is the 11^th 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

SupportUA-L is designed to keep UA advocates informed about the University's budget and other legislative matters. To subscribe to this listserve, please visit: https://lists.uaf.edu:8025/mailman/listinfo/supportua-l

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 32^nd 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