Foster Report

Greetings to each of the 18,400 people in the 28 communities of District 39. The Alaska State legislature started its work on January 16 and is expected to continue through the end of May.

This session I will be focusing on the Permanent Fund Dividend, education, subsistence, energy, and funding for our communities.

PERMANENT FUND (PFD)

During my last year as the chair of the State’s budget in 2022, we paid Alaskans the largest PFD ($3,284) in state history. This year I will vote to support the full statutory PFD, which is expected to be around $3,500.

The big question is: “Where will the money come from?” The Governor recently proposed a $7.3 billion budget. He included a full PFD at a cost of $2.3 billion. The other $5 billion pays for things like roads, public safety, education and healthcare. The problem is our revenue is only $6.3 billion. This means the Governor’s budget has a $1 billion deficit.

The Governor has not proposed a solution to filling his budget shortfall. Many legislators are on record as supporting a smaller PFD. Some of them support a $2,000 PFD, which balances the Governor’s budget. Other legislators support the “25/75” plan, which results in a $1,360 PFD. This allocates 25 percent to the PFD and 75 percent to state services. Further options include eliminating oil tax subsidies — which I support— and dipping into savings.

My argument for a full PFD has been that we should not balance the budget on the backs of Alaskan families who are struggling to buy food and pay heating bills. Each legislator will have to take a stand on the PFD when we vote on amendments, but we won’t know the final amount until May.

DIVIDEND

EDUCATION

I support the education community’s funding request for an increase of $1,400 to the Base Student Allocation (BSA). The BSA is the annual amount the state pays to schools for each student. Currently, the BSA is $5,960. Since 2011, the BSA has only gone up 5 percent while inflation has increased by 25 percent.

Last year the legislature passed a one-time $680 “BSA equivalent” increase. The Governor vetoed half of that, which left schools with $340. Last week the legislature attempted to override the Governor’s veto. I voted “yes” to override. But the three-quarter vote threshold was too high, and the override failed.

Increased education funding is still on the table in Senate Bill 140. This bill increases the minimum internet speeds in our schools. In finance, I voted ‘yes’ on an amendment to increase the BSA by $680. It passed.

However, last week the rules committee reduced that to $300. The $680 was the floor for most schools, and they’ve all said that $300 falls far short of what is needed.

If the bill makes it to the floor, then there will surely be amendments to increase the BSA. I will be supporting our schools by voting for a minimum of $680 and preferably $1,400.

The Senate also seems to favor a minimum of $680. But the real question is: “Will the Governor sign or veto the bill?” I’m hearing that he is inclined to veto, and unlike a budget bill where he can reduce line item, if he vetoes a policy bill like SB140 then the entire bill dies. There are some other educational items that he’s interested in, so it’s possible a package can be put together that everyone must compromise on.

SUBSISTENCE

Subsistence is of course incredibly important to folks in our district. But the Dunleavy Administration appears to be taking actions that could erode subsistence rights. A legal standoff with the federal government could endanger the Katie John decision, which allows for subsistence priorities in certain parts of the state. I am opposed to any reduction of subsistence in Alaska. The legislature has the power of the purse, and I will not support appropriating funds if they are aimed at harming the ability of

Alaskan families to put subsistence food on the table.

ENERGY

Urban Alaska is facing a natural gas shortage, and they are looking to the state for help. This is an opportunity for rural legislators to also get help for our remote communities as they struggle to pay high energy costs.

We are currently focused on improvements to the “power cost equalization” (PCE) program. One possibility is to raise the residential cap. Currently, homes are only eligible for assistance up to 750 kilowatt hours. Other options include expanding program eligibility to schools or businesses. If grocery stores could participate in the PCE program, then that could help to reduce food costs.

COMMUNITY FUNDING

Rural Alaska has significant infrastructure needs. Snow clearing and road maintenance equipment is often in short supply. Water and sewer systems are being constructed, but upgrades are often needed. And schools, fuel tank farms, and health clinics are frequently in need of funding for repairs.

It’s been ten years since we saw a $2 billion capital budget. And those days seem long gone. Recently, the capital budget was as low as $135 million. Almost all of that was used as match to secure federal dollars (largely for transportation). And that meant no discretionary capital projects for any districts.

Rural legislators are at a disadvantage because of the number of communities that we often represent. Say, for example, each district is allotted $1 million. An urban legislator who represents part of Anchorage may ask that it be applied to a neighborhood library for roof replacement.

Our district, however, has 28 communities. Each of them usually has requests ranging from a few million to tens of millions. Total requests have been as high as $200 million.

Luckily, rural legislators have been well positioned both in the majority and in key positions. The competition among 40 House members to chair the capital budget is fierce.

Prior to chairing the operating budget, I chaired the capital budget for 2 years. And now my fellow rural legislator from Dillingham oversees this budget. We understand rural areas have unique challenges that justify robust appropriations.

Last year the capital budget was $360 million. After the federal match requirements and a long list of Governor adds there was a little bit of wiggle room for each of the 40 districts. This year’s budget could very well be about the same size. The chair of the capital budget often gives the highest consideration to “life, safety, health” projects.

If a community wants to submit a capital request, please contact Paul LaBolle in my office at Paul.Labolle@akleg.gov.

Thank you to everyone who has reached out to me recently on education funding.

If folks need assistance or have comments on any issue, please feel free to contact me. You can call me at 800-478-3789 or email me at Rep.Neal.Foster@akleg.gov. Thank you!