Bradners’ laska Legislative Digest A- Commentary on Alaska issues and policy

PUBLISHERS: Mike Bradner, Tim Bradner / Business Office: (907) 440-6068 / 3037 South Circle Anchorage, AK 99507 / Fax: (907) 345-5683

Digest No. 8/2021 March 8, 2020 More fallout from failure of emergency declaration A new bill to deal with COVID-19 response may be introduced as early as Monday, Senate leaders said Friday in a briefing. It will deal with issues left dangling when the state emergency declaration ended Feb. 14, including authorization to shift vaccine supply between communities; telehealth authorization without a physical exam; liability issues; authorization for $8 million a month in federal food stamp funds; and authorization for school districts to have larger car- ry-over fund balances (the current limit is 10 percent). Those authorizations, and more, disap-

peared when the emergency declaration expired.

What we didn’t hear in the briefing was re-imposition of mandatory airport virus testing, which also expired (it is now voluntary), and any reference to waivers from federal regulations that also expired, and which are a huge issue for health care providers. The declaration was a mechanism to get the federal waivers for providers and the food stamp program extension, but the lack of mandatory airport testing is already being linked to a serious infection outbreak in Petersburg. – Continued on page 8 A and Donna Arduin duo in Juneau? The spat between conservative Sen. Lora Reinbold and Gov. Mike Dunleavy continues to provide entertainment in the Capitol. Late last week Reinbold read out a lengthy letter to the governor responding to his harsh criticism over Reinbold’s statement on pandemic response. The latest is a report that Reinbold wants to hire Donna Arduin, the conservative budget hawk fired by Dunleavy as Office of Budget Management director. Capitol hallway talk is this is part of a plan to discredit the governor and perhaps fuel a conservative opponent (maybe Reinbold?) to Dunleavy in a 2022 relection bid. Arduin’s hiring is up to Senate Rules chair Gary Stevens. – Continued on page 5

In this issue: Budget, Page 2; Election changes, Page 3; Status of bills, Pages 4-5; Education, Pg. 6; Rural water/sewer funding

Our reports are protected by Copyright. Please do not forward to others without permission. © COPYRIGHT Email: [email protected] . . . State agencies/budget . . . Stedman: Senate operating budget will likely follow governor’s recommendations Don’t expect many changes to the governor’s agency operating budgets from the Senate’s budget subcommittees, Sen. , R-Sitka, Finance committee cochair for the operating budget, said during the committee’s Nov. 4 budget briefing by the Legislative Finance Division. However, there’s no “closeout” date yet set for subcommittees. Senate President , R-Kenai, said March 6 that the House, which traditionally originates the operating budget, will likely have its version to the Senate by the end of March. The House is behind schedule because of its late organization. The Senate is ready to close out its agency subcommittees but won’t until the House finishes its version. Traditionally the Senate leads on the capital budget, which will be very skinny this year, and can be expected to take the lead on the governor’s general obligation bonds bill. Other highlights from Senate Finance March 4 budget briefing: Historical review, from Legislative Finance: Agency operating budgets are down $700 million per year between FY 2015 (the last high revenue year) and the proposed FY 2022 budget, or about 15 percent. The big drop ($663 million) was between FY 2015 and FY 2018. Reductions have been less between FY 2018 and FY 2022. About 2,000 positions were eliminated between FY 2015 and FY 2018 with smaller decreases since, Legislative Finance said. Comment from cochair Stedman: Recent efforts at reductions, such as $60 million cut from the university, are offset by increases, like $60.5 million added to prisons spending. The Legislature seems stuck at a $4 billion operating budget. “We need other levers,” Stedman said, like statutory changes to eliminate whole programs.

Sen. , R-Anch., commented that the governor’s proposed extra draws from the Permanent Fund earnings reserve to pay extra dividends will total $1.2 billion in FY 2021 and $2 bil- lion in FY 2022, and when combined with the regular percent-of-market-value draw of $3 billion for the two years will total $9.2 billion taken from the Fund’s earnings reserve by the end of FY 2022.

A little good news on the revenue front Rising crude oil prices mean there may be $249 million more revenue in the current Fiscal Year 2021 and $293 million more in FY 2022, the budget for which the Legislature is now preparing. The estimates, which are tentative, were given the Senate Finance Committee March 4 by the Legislative Finance Agency. But just as Lady Luck smiles, she frowns: The state’s Comprehensive Annual Fi- nancial Report for FY 2020 is just in, and it shows the year-end balance for the Constitutional Budget Reserve, the state’s main ready cash reserve at $1.4 billion, $400 million less than the $1.8 billion estimated. When the FY 2021 deficit is paid it will bring the CBR to about $500 million, the minimum needed to meet ongoing payment obligations during FY 2022.

Page 2 Alaska Legislative Digest No. 8/2021 . . . Elections . . . Better Elections Initiative – Ballot Measure 2 – is now law The Better Elections Initiative passed in Ballot Measure 2 in the November General Election, went into effect on Feb.28. This makes fundamental changes in election procedures, most import- ant being an end to “closed” partisan primaries. Voters will cast their votes in a new nonpartisan “top four” primary election on Aug. 16, 2022, and a “ranked choice voting” (RCV) process for the Nov. 8, 2022 general election. The Division of Elections will soon issue updated candidate forms reflecting the new law. Additionally, DOE will adopt new and amended regulations necessary for implementing the new law. The process of fully converting Alaska’s current election system to the voter-approved new one is extensive and will take time. Major changes include: • Only one ballot in primaries. All candidates will be listed regardless of party or group affiliation. Only the top four candidates will advance to the general election. • No more petition candidates. Candidates may no longer skip the primary and petition to appear on the general election ballot. Candidates who did not run in the primary election can still run as a write-in candidate in the general election, however. • Different ballot design/instructions for the general election. Voters will be able to rank candidates and may choose as many or as few of the listed candidates (or write-ins) to rank. • Only first round results will be reported on election night, just as in prior elections. These will be unofficial results. • Additional tabulation of further rounds and retabulation for races where no candidate reaches 50 percent of votes will occur on the 15th day after the election, and after all eligible ballots have been received and counted. The ranked choice system is being done in some other states and is still new. One consequence: This will end the current closed Republican primary election The closed primary is where only certain voters, such as registered Republicans, can cast ballots. Since primaries typically have low turnouts this makes incumbent Republican legislators vulnerable to targeted efforts, where a small number of voters energized on a particular issue can have outsized effects. In the August 2020 closed Republican primary several experienced incumbents including Cathy Giessel, John Coghill, Jennifer Johnston and Chuck Kopp, were defeated. Had the primary been open, such as under the Ballot Measure 2 changes, more voters would have the option of cast- ing ballots for these veterans, and they would likely have been reelected. Bills active last week: • SB 74, general obligation bonds (Senate Transportation Comm., March 3) • HB 78, telehealth services (Senate Health and Social Services, March 2)

Page 3 Alaska Legislative Digest No. 8/2021 . . . Status of Bills . . .

Introduced in the House Coming this week in the Legislature Monday March 8 -- SB 70: Opioid overdose drugs (By S. H&SS)...... • SB 32, college credit in high school (Senate Education ...... To H&SS Comm., 9 am) -- HB 117: Extend termination date of Board of Cer- • SB 65, liability, health care providers (Senate Judiciary tified Direct-Entry Midwives (By Ortiz) ...... Comm., 1:30 pm) ...... To L&C, FIN • SB 27, industrial hemp (Senate Labor and Commerce -- HB 118: State identification and driver’s licens- Comm., 1:30 pm) es of persons in Dept. of Correction custody (By Tuesday March 9 Kreiss-Tomkins) ...... To SA • Dept. H&SS reorganization (Senate Finance Comm., 9 am) -- HB 119: Medical assistance for recipients of adult • HB 115, aquatic farm sites, (House Fisheries Comm., 11 foster care services; adult foster care home license am) (By GOV) ...... To H&SS, FIN • HB 53, military children, school residency (H Mil. & Veter- -- HB 120: State land, Dept. of Education and Early ans’ Affairs Comm., 1 pm) Development dispose of state land (By GOV) ...... Wednesday, March 10 ...... To RES, FIN • Alaska Energy Authority update, (Senate Finance Comm., -- SB 24: Virtual meetings for corporations (By S. 9 am) L&C) ...... To L&C • HB 81, modify net profit royalty, oil and gas leases (House Resources Comm., 1:30; also in Senate Resources, 3:30 pm, -- HB 121: Education tax credits; employer child as SB 61) care cost (By Fields) ...... To L&C, FIN • SB 24, virtual meetings for corporations (House Labor and -- HB 122: Gun violence protective orders (By Tarr).. Commerce Comm., 3:15 pm) ...... To JUD, FIN Thursday, March 11 -- HB 123: State recognition of federal recognized • SB 93, all-claims health cost data base (Senate Health and tribes (By Zulkosky) ...... To TRIBAL, SA Social Services, 1:30 pm) -- HB 124: Filling vacancy in legislature by appoint- • SB 74, general obligation bonds, infrastructure (Senate ment (By Carpenter) ...... To SA, JUD Transportation Comm., 1:30 pm) -- HB 125: Private sector and state employment pref- Friday, March 12 erence for active service members, veterans, spouses • HB 98, forest land use (House Resources Comm., 1 pm) (By Nelson)...... To M&VA, L&C • HB 36, motor vehicle dealers (House Labor and Com- -- HB 126: Extend termination date of Board of Pub- merce, 3:15 pm) lic Accountancy (By Thompson) ...... To L&C, FIN Committee code: Finance FIN -- HB 127: Alaska Municipal Bond Bank Authority Judiciary JUD (By LeBon) ...... To C&RA, FIN Resources RES Labor and Commerce L&C State Affairs SA House Committees’ Actions Community and Regional Affairs C&RA -- HB 79: Salt water sport fishing and fishing guides Transportation TRANS Health and Social Services H&SS (2 do not pass, 1 no rec, 4 amend) ...... FISH to FIN Education EDUC Status current as of March 5, 2021 Fisheries FISH Tribal Affairs TRIBAL Alaska Legislative Digest No. 8/2021 Page 4 . . . Status of Bills . . . Introduced the Senate Dunleavy-Reinbold spat (Cont.) -- SB 95: Right of first refusal of a volunteer search - Continued from page 2 and rescue group with respect to surplus state prop- Senate leaders said Friday they hope to lay the Re- erty (By Wilson) ...... To SA, FIN inbold-Dunleavy spat to rest early this week. Senate -- SB 96: (Not introduced yet) President Peter Micciche, R-Kenai, said that until it -- SB 97: State land, Dept. of Education and Early is resolved the Judiciary committee, which Reinbold Development dispose of state land (By GOV) ...... chairs, is “nonfunctional” with the governor not ...... To RES, FIN allowing administration people to testify on bills. -- SB 98: Medical assistance for recipients of adult “This is a dispute between two different person- foster care services; adult foster care home license alities,” Micciche said in a briefing on Friday. Sen. (By GOV) ...... To H&SS, FIN Stevens, the Rules chair, said he supports the senator -- SB 99: Care of juveniles: justice, facilities, and and governor sitting down “as adults” to talk out treatment (By Begich) ...... To H&SS, JUD their differences. There’s still hallway talk, however, -- SB 100: State income tax (By Begich) ...... that if a resolution doesn’t come quickly the Senate ...... To SA, FIN may convene its Committee on Committees and take -- SB 101: Extend termination date of Citizens’ Ad- Reinbold out of the chair, essentially kicking her out visory Commission on Federal Management Areas of the Majority. in Alaska (By RES) ...... To RES This has happened before. When he was a senator, Senate Committees’ Actions Gov. Dunleavy quit the caucus over disagreement -- SB 14: Selection and review of judges (3 do pass, on the binding vote rule. Sen. Shelly Hughes, now 1 do not pass) ...... JUD to FIN Majority Leader did the same, but later. The inten- -- SB 21: Mobile intensive care paramedics (3 do sity of the dispute with Reinbold is different, how- pass, 1 no rec) ...... H&SS to L&C ever. A move to take the chair from Reinbold may -- SB 54: Alaska Housing Finance Corp. water and cause problems with other conservative senators, sewer bonds; transportation (3 do pass, 1 no rec)...... however...... L&C To FIN -- SB 55: Employer contributions to PERS (3 do What committe reports mean: pass, 1 no rec) ...... L&C to FIN Committees do normally vote to move bills -- SB 56: Exemption from regulation as a public from committee. The normal procedure is for utility for plants, facilities generating electricity en- committee members to indicate their recom- tirely from renewable energy resources (1 do pass, mendations, as in “do pass” or “do not pass,” or “amend” in a later committee or on the floor 3 amend)...... L&C to RLS of the House or Senate. Alteratively, a member Senate Floor Actions can sign “no recommendation.” If a bill gets a number of “do not pass” or “amend” recommen- -- SB 24: Virtual meetings for corporations ...... dations it signals that the bill is in trouble...... PASSED 15-5

Page 5 Alaska Legislative Digest No. 8/2021 . . . Education . . . School groups watch for Senate committee early-education reading bill School groups are watching for the planned Senate Education Committee bill on early education that is expected to surface this week. Its title: “Alaska Academic Improvement Modernization Act.” The main question is whether it would provide for statewide pre-K and if any real money would be committed. In hearings last week on SB 8, Sen. ’s pre-K bill, school officials and advoca- cy groups outlined what they feel is essential for a bill if the committee’s version is to be the vehicle. Major elements should be regular funding, ideally as part of the school foundation formula; require- ments that certified teachers with training in the teaching of reading, and ongoing support for the teachers in pre-K, best done by beefing up the University of Alaska’s teacher education programs.

Several studies demonstrating the benefits of pre-K and a focus on reading through third grade (and even beyond) were presented to the committee last week but the research most compelling to us was from Nome Public Schools. A state grant funded pre-K for a period as one of the state’s pilot programs until 2019 when the governor vetoed the grants. Data from Nome showed 70 percent of kindergarten students in 2016 who had been in pre-K performing at expected levels compared with 55 percent who did not attend pre-K, according to Jamie Burgess, Nome’s superintendent. When a certified teacher was involved the results improved to 74 percent with pre-K to 66 percent without pre-K in terms of expected grade level performance, Burgess told the Senate committee. Results from Mississippi, a state with high percentages of disadvantaged students as in Nome, were similar to those in Nome, experts from that region said. In 2009, before Mississippi launched statewide pre-K, 22 percent of Grade 4 children were reading at grade level reading proficiency; by 2019, after statewide pre-K, the percentage proficiency rose to 32. Early literacy resulted gains in math, too, according to the Mississippi data. In 2009, prior to statewide pre-K, 22 percent of fourth graders achieved expected proficiency in math. Of children with pre-K, 39 percent achieved proficiency.

Mississippi began statewide pre-K with $9.5 million funding in 2013 and increased it to $15 million per year in 2015. Mississippi is seeing success in early literacy, the Senate committee was told, but the effort needs consistency in funding, requirements for teacher training and coaching for teachers. Mississippi’s earlier experiments with pilot programs showed that the benefits were lost when funding ended. For Alaska, the stumbling block is cost: SB 8 is expected to cost $10.8 million in FY 2022 with costs rising to $35.8 million by 2026.

Alaska’s share of $1.9 trillion pandemic aid (House version): The U.S. Senate will have changed this, but the House version has $1.084 billion for Alaska with $826.93 million for the state itseld and $257.75 million separately for municipalities. Figures are from the National League of Cities and National Association of Counties

Page 6 Alaska Legislative Digest No. 8/2021 . . . Rural/Construction . . . Funding for rural water/sewer rising sharply; $120 million likely in FY 2022 Money for rural safe water and sanitation projects has increased sharply over the last three years and will be higher next year, in FY 2022, the Senate Finance Committee was told at a Dept. of En- vironmental Conservation briefing. Combined state and federal funding reached $116.8 million in current FY 2021, up from $75.9 million in FY 2017; $90 million in FY 2019 and $110 million in FY 2020. About $70 million in state funding (combined state and federal EPA and USDA money) will be spent in FY 2022; the Indian Health Service allocation wasn’t available but that agency spends $48 million to $50 million a year. The Alaska Native Tribal Health Consortium, or AN- THC, manages IHS-funded projects and the tribal consortium works in tandem with the state DEC (the two divide up rural communities). For DEC, 19 ongoing and 13 new projects were underway in the current FY 2021. ANTHC is separately managing 35 projects this year.

Despite the increased funding, both agencies face an uphill fight in, “putting the ‘honeybucket’ in the museum,” a long-time goal of former governors in efforts to ensure safe drinking water and sewage disposal in rural Alaska. There are still 32 communities with no piped water or sewage systems (the honeybucket endures). Projects are underway now for two of these, but 30 are still on the waiting list. All of these are high-cost projects due to local site conditions, which is why they are delayed. The bigger problem is that most of the existing water/sewer systems were built years ago and are now aging, requiring more maintenance and replacement. DEC has identified a $1.4 billion requirement to build systems for the 30 unserved communities and to do replacement needs that have been identified. Some pending new federal CARES act money may go to this. DEC: New technology system for rural sanitation to be tested at UAA A 2013 technology initiative by DEC aimed at developing effective, lower-cost rural sanitation systems has resulted in a prototype system developed at the University of Alaska Anchorage that will be pilot-tested at a UAA dormitory. The goal is for a system in the $160,000 per household range. Recycled “gray” water would be used for laundry and bathing. The pilot test project awaits results of U.S. EPA safety testing of the recycled water. Conventional rural water and sewer sys- tems now being installed cost $350,000 to $750,000 per household, but part of that is the piped clean water. Of interest this week: • Dept. of Environmental Conservation overview, March 8, by Comm. Jason Brune (House Resources Committee, 1 pm) • State agency function consolidation, by Office of Management and Budget, Dept. of Administration, March 8 (House Finance Comm., 1:30 pm)

Page 7 Alaska Legislative Digest No. 8/2021

. . . Health care . . . Bill dealing with pandemic response expected in this week – Continued from top, page 1 Telehealth is also critical. When the declaration expired, medical specialists in Washington state immediately stopped telehealth services to Alaskans with cancer. For these patients the ability to consult specialists without having to travel, and risk virus exposure, is important.

The 132 federal waivers also lost with the expiration allowed health providers to operate 32 types of services such as alternative care sites that included drive-through virus testing. With the waiver gone Providence Health Systems had to shut down drive-through test centers in An- chorage. That eliminated a large capability to people to get tested in Anchorage. It’s not clear whether the pending legislation will allow the federal government to continue these waivers, or whether the government can continue them absent a formal state emergency declaration. The Alaska State Hospital and Nursing Home Association wrote to the federal Center for Medicare and Medicaid Services Feb. 19 asking whether that is possible but two weeks have passed and there has been no answer. Legislature failed to pass extension; governor said he can’t extend unilaterally Basically, the Legislature failed in the initial effort at an emergency declaration extension be- cause the House was delayed in organizing. The governor was asked to extend the declaration administratively, but he felt he couldn’t legally do while the Legislature was in session. The political sensitivity is the belief by conservative constituents that the emergency declaration is linked to mask-wearing and business restrictions. The governor has tried to explain that there is no connection it hasn’t gotten through to many. It didn’t help that Sen. Lora Rein bold, R-Eagle River, a conservative legislator, spun conspiracy theories around this and added to the confu- sion. The governor rebuked Reinbold in a harshly written letter, but the senator is still vocal.

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