Hopes for federal flood help, fears of state fiscal crisis shared with Juneau’s leaders by lawmakers, lobbyists
- Mark Sabbatini
- 4 days ago
- 6 min read
Updated: 4 days ago
Annual meeting of Assembly, legislative delegation, and state and federal lobbyists focuses on securing GLOF funding, skepticism about tax proposals at Alaska State Capitol
By Mark Sabbatini
Juneau Independent
Juneau’s well-positioned to get federal help with the city’s foremost issue of preventing glacial flooding, but the state is teetering on the edge of a fiscal cliff without a lot of optimism a rescue will happen this year.
Those overviews were provided to the Juneau Assembly and other city leaders during an annual meeting Thursday morning with Juneau’s three members of the Alaska Legislature, the city’s state and federal lobbyists, and representatives of Alaska’s two U.S. senators.
The meeting occurred during the same week as President Donald Trump’s one-year anniversary of his second term and the beginning of this year’s legislative session. It also followed a visit by Mayor Beth Weldon and local tribal leaders earlier this month to Washington, D.C., to discuss flood protection and other needs with federal administrators and Alaska’s congressional delegation.
The federal presentations went first — in part because some of the presenters had to depart mid-meeting, but also because those included updates on flood protection efforts, Mayor Beth Weldon told the room.
"We knew that you probably wanted an update from our trip because that's pretty much our life right now, is the GLOF," she said, using the acronym for a glacial lake outburst flood.
Numerous concerns about adverse impacts from Trump administration cuts and policies have been expressed by local government and business officials during the past year. But Katie Kachel, a lobbyist hired by the City and Borough of Juneau for federal issues, said efforts to secure funds for short- and long-term flood solutions are promising, in part due to the all-Republican congressional delegation that is having success working with the administration.
A short-term priority is submitting legislative language for flood projects the delegation can push in the next biannual bill that authorizes U.S. Army Corps of Engineers funding for projects, which is tentatively set for consideration by the Senate in May, Kachel said. The authorization is a step toward actually getting the funding — which occurs separately in budget legislation — so another priority is "targeting the next disaster supplemental appropriations bill for that whenever that may come."
"The timing of that bill depends on other natural national disasters happening that year," she said. "The key to getting in a disaster appropriations bill is being ready with language that checks all the boxes, and fits in all the boxes, and has (as) many justification documents as possible at the time. We'll be ready to arm our congressional delegation with this information so they can push it when the time comes."
Efforts will also be made to minimize the matching funds Juneau is required to provide to secure federal funds, Kachel said. Officials have said a long-term flood solution is likely to cost hundreds of millions of dollars, and Kachel said the initial request will be for the federal government to cover the entire amount. If that fails a 90% federal and 10% local split will be sought — the same ratio approved for a port project in Nome.
The D.C. visit by Juneau leaders also included meetings with U.S. Coast Guard officials about the future homeporting of the Storis icebreaker in the capital city, and what specific housing and other infrastructure development are needed during the next few years for that to occur, Kachel said.
"They are going forward with a request for information to understand the housing in Juneau and to seek developers who might participate in helping create housing for Coast Guard members that would be brought in with the Storis," she said. "We will continue to work with Sen. (Dan) Sullivan's office to follow up on them with that, and just make sure they're not being too bureaucratic and too slow-moving because we sense the urgency, we want them to feel the sense of urgency. Housing is a requirement of homeporting and we need to make sure that they're using the resources that they've been given to accomplish that."
State outlook
The Assembly brought copies of its legislative priorities list to the meeting, topped by items including flood protection, a second Juneau-Douglas bridge, and upgrades to waste and wastewater facilities. But Juneau’s legislative delegation said city leaders shouldn’t expect much funding for it during this year’s session.
This year’s capital projects budget is one of the smallest in recent years and the $1,000 Permanent Fund Dividend the smallest ever when adjusted for inflation. Rep. Sara Hannan, a member of the House Finance Committee, told Assembly members that an ongoing drop in oil prices means even that austere budget would have a deficit if carried forward to the coming year, which means other things like the Community Assistance Program for municipalities is being targeted in Gov. Mike Dunleavy’s proposed budget.
"We don't have the money in the fund to give the allocation that we gave last year and there's no proposal currently to fill it," she said. "There's also, it appears right now, no money for school maintenance, deferred maintenance, let alone new capital projects, which we know there’s a lot of."
Dunleavy this week has emphasized his key focus this session — his last as governor as he nears the end of his second term — is a fiscal plan that gets Alaska through what’s expected to be five tough years before new natural resource development projects are in place. But skepticism about components of his plan — and the likelihood any plan can get approved by the session’s deadline of May 20 — was expressed by the delegation.
One component, for instance, is a statewide sales tax that reportedly will be 2% from October to March and 4% from April to September.
"As you know, as local government, we just had a response from voters on a seasonal sales tax variation, so I know that this community isn't excited about that," Hannan said, referring to a local seasonal sales tax voters soundly rejected in last October’s municipal election. "I remain an advocate for an income tax. I think it captures a lot of money from folks — that ones can afford it — and it's less regressive."
But Sen. Jesse Kiehl, a member of the Senate Finance Committee, said he doubts either tax on residents has the votes to pass the Legislature this year.
"As of today I don't think either one has the votes — and from different people" opposing each type of tax, he said, adding he agrees with Hannan in favoring an income tax. "And yet at some point the math is going to have to work."
Increases in some oil taxes and fees are also reportedly part of Dunleavy’s fiscal plan, which Kiehl said may have a better chance of success.
"I definitely think that some additional value for Alaska's oil to the Alaska side of the table, instead of the producer side of the table, is entirely appropriate," he said. "And frankly, the vote counts are closer on that than they are in a sales tax right now. So that will be part of the conversation. I can't tell you what's going to be part of the solution."
One prospect, Kiehl said, is a statewide bond package being put before voters in the November election, although that also "will be a difficult discussion to have."
"I will say I support it," he said. "We have not placed a general obligation bond in front of Alaska voters since 2012. Alaska voters have not turned one down since statehood. That does not mean we should use all of our bond capacity at one go because that's how you get the voters to turn it down. But a reasonable and responsible use of our debt capacity with a very good credit rating right now can keep the construction industry working, can address some of our major maintenance backlogs and some of our public infrastructure needs. That's going to be my pitch."
Rep. Andi Story said she is trying to further progress made last year on education, which included the first major increase in per-pupil funding in many years. But the budget was partially balanced by taking $200 million from the Alaska Higher Education Investment Fund, leaving it with a market value of about $313.5 million as of Dec. 31, so she said replenishing that scholarship fund is a priority.
Story has also introduced bills she said are intended to provide more reliable funding for districts by altering how student enrollment is tallied, and boost the prospects for local Coast Guard housing by expanding the ability of the Alaska Industrial Development and Export Authority to provide loans for new workforce housing facilities.
Better salaries and benefits for public workers are also an ongoing priority of the local delegation. Kevin Jardell, the city’s lobbyist for state matters, said one much-discussed proposal he believes will advance this year is restoring a traditional pension system for public employees, but isn’t sure about its ultimate fate.
"I do think the defined benefit plan will pass the Legislature," he said. "That's my personal view of where the votes are. I will not predict what the governor will do on it. I don't think if he does veto it there's votes to override the veto, and if the veto comes up next year there'll be a new set of legislators. So it’s hard to predict what's going to happen there."
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
