Call Us: 800-327-2571

Senator hopes for agreement to fund ferries through mid-2020

March 1, 2019

JUNEAU, Alaska (AP) — A co-chairman of the Senate Finance Committee said Thursday he wants to reach a budget agreement that would fund the state’s ferry system through mid-2020.

Sen. Bert Stedman, a Sitka Republican, said that would allow time for further discussion about management of the system going forward.

Stedman said he views Gov. Mike Dunleavy’s budget proposal as an “elimination budget” for the Alaska Marine Highway System. A spokeswoman for the ferry system has said it hasn’t scheduled sailings past Oct. 1.

Stedman said he wants to see cost estimates associated with idling the system.

Dunleavy, a Republican, has requested a consultant’s report by Aug. 1 that looks at options for “reshaping” the system, such as through a public-private partnership, with implementation targeted by July 1, 2020.

As part of his overall budget, Dunleavy has proposed major cuts or changes to areas including education, health and social service programs and the ferry system. He has proposed changes in collection of petroleum property and certain fishery-related taxes that would benefit the state but that some communities say would hit them hard.

Valdez Mayor Jeremy O’Neil said in a statement that a potential loss of municipal taxes from petroleum property within his community “essentially eliminates 90 percent of our annual operating budget.”

Dunleavy is seeking to close a projected $1.6 billion deficit without new statewide taxes and while paying residents a full dividend from the state’s oil-wealth fund, the Alaska Permanent Fund.

The budget proposal has sparked outrage though some Alaskans say they like that Dunleavy is trying to force lawmakers to prioritize spending.

Stedman said he expects substantial budget reductions though he didn’t define substantial. He said he and others want to guard against overspending from permanent fund earnings.

“We need, in my opinion, to make a significant step this year,” he said. “The governor would like to see an entire solution this year. I don’t know if that’s going to be attainable or not, but we’re definitely going in that direction.”

He said Dunleavy’s desire for a full dividend payout would be taken into consideration.

“The dividend will not be zero,” he said, adding later: “We’ll try to fix the problem without adversely impacting a fair dividend.”