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Season's Greetings and a Merry Christmas to All!

I'm currently at home with my family celebrating the holiday season.


    The Governor recently released his purposed budget for the coming year. This budget sets a good starting point but unfortunately due to the legislatures unwillingness to agree on a comprehensive fiscal plan it is left incomplete, and it is hard to tell what the budget will look like come May. For more information on the Governor’s FY 2025 proposed budget click (here).


This month I want to talk about Alaska’s historical revenue sources and highlight some new legislation I have in the works to help us get the most bang for our buck in the capital budget.

Alaska Historic Revenue Sources: the fall traditional revenue and the rise of investment revenues

    The Alaska Legislative Finance Division released an update on their comprehensive budget historical data set. What is interesting regarding the data is the difference between the use of traditional revenues and Percent of Market Value (POMV) draws.


From statehood to 1975, most state revenue utilized to support Alaska government operations were taxes funds collected from in-state economic activities such as fisheries and mining (Figure 1). With the discovery of oil, the importance of revenues from oil production began to overshadow other in-state activities as a source of revenue. From 1975 to 2014, the majority of Alaska unrestricted general fund revenue came from the petroleum industry.


However, with the decline of oil prices and production in the 1980s, the State of Alaska began to shift its revenue source away from petroleum to investment revenues. Alaska’s investment revenue is the income generated from certain assets such as the Permanent Fund, the Constitutional Budget Reserve Fund (CBRF), and other investment funds. At first, the legislature appropriated funds from CBRF to pay for operating state government. This resulted in a greater focus on investment revenues as compared to in-state economic activities of traditional non-petroleum revenue sources.


In 2018 the legislature created the POMV framework for using a portion of the earnings of the Alaska Permanent Fund to support government operations. By accessing the Permanent Fund in this way, it allowed state policymakers to continue providing government services based on global markets and investment revenues rather than utilization of traditional revenue that focused on in-state economic activities and investments.


While the POMV does allow the state to avoid new or increased taxes on Alaska residents and industry, it inherently shifts the focus from in-state economic development to a greater reliance on investment revenue. In addition, it did not define how the annual draw is divided between government operations and PFDs. This results in an annual legislative debate regarding how much the state wishes to dedicate to government operations as compared to PFD’s individual economic investments.


In the end, the historical data shows Alaska’s gradual shift away from in-state natural resource economies to oil production and finally state investment revenues. When we discuss how to fund government services in Alaska, it is important to note where the revenue comes from. Do we want Alaska to fund its government services based on its own investment revenue becoming a self-perpetuating system that has no purpose other than to sustain itself. The cautionary tale of the self-licking ice cream cone is one that Alaska needs to consider when discussing Alaska’s in-state economic activities and investments.

New Legislation Brewing: Capital Project Evaluation Division

    Currently the state of Alaska has multiple capital project evaluation boards and committees that utilize different criteria scoring and evaluation rubric, if any, for potential capital projects. However, it can be difficult to analyze Alaska’s Capital Project budget when each highway, harbor, runway, and school building is evaluated distinctively and focused upon different weighted score criteria. As such, it is in the public best interest to create a standardized criteria scoring and evaluation process for capital projects funded by the State of Alaska to improve the cost efficiency and effectiveness of infrastructure investment and economic development in the State.


The bill would establish the Capital Project Evaluation Division within the Office Management and Budget (OMB). The goal is to create standardized criteria scoring and evaluation rubric across all types of capital projects that meet both state and federal requirements. This would allow a clear assessment of Alaska’s capital projects across departments, regions, and different types of infrastructure to improve the cost efficiency and effectiveness of infrastructure investment and economic development in the State.


Evaluated based on following criteria:

1) Safety – including the reduction of fatalities or serious injuries the expenditure is likely to achieve, the proximity of the project to safety hazards, and any possible reduction of emergency response time.  

2) Accessibility – including an increase in access to jobs or services or a reduction in traffic congestion.

3) Land use – including the projects efficient use of land for the land’s intended function.

4) Environmental impact – including improvement to the natural environment, mitigation of harm to the natural environment, and changes to air or water quality.

5) Economic development – including the projects effect on the movement of goods, economic development projects, private sector development, and the future economic development and private sector economic growth.

6) Maintenance – including whether the project adequately accounts for the ongoing maintenance costs and the project’s effect on future maintenance and the operation costs to the state, and if appliable, a political subdivision of the state.

7) Urgency – including whether the project meets a foreseeable need or could be completed without state funds.

8) Operational importance – including the number of people served by the project and available alternatives.

9) Local ranking – whether a municipality or other pollical subdivision of the state has requested a project and the importance of the project to that municipality or political subdivision.

Meet My Awesome Staff!

For further information, responses and feedback please contact my office anytime. Below you can find contact info for each member of team Myers. 


Dawson Mann- Chief of Staff

-Senator's Aide for Floor Session

Dawson.Mann@akleg.gov

907-465-6858

                     

Theresa Woldstad- Legislative Aide

-Senator's Aide for Senate Transportation Committee

Theresa.Woldstad@akleg.gov

907-465-3719

The Voice of Common Sense 

The Alaska Senate Minority website is live! Check out our priorities, proposed solutions, viewpoints, video clips, press releases and more by clicking here. You can also follow us on Facebook at Alaska Senate Minority | Facebook 

About Me

Senator Robert Myers was born in Fairbanks, Alaska. He spent much of his young childhood at the Salchaket Roadhouse which his parents owned. Growing up, Robb developed a passion for Alaska. He attended the University of Alaska Fairbanks where he studied philosophy, political science, and history. During college he drove for a tour company where he was able to share Alaska with countless people. He currently drives truck and travels the Haul Road frequently. He ran for office because he wants an Alaska his children will choose to make their home down the road. When Robb isn’t working, he enjoys reading, history, board games, and spending time with his wife Dawna and his five kids.

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