Capitol Report - March 18, 2022
March 18, 2022
Lawmakers consider budget increases after receiving positive Spring 2022 Revenue Forecast
This week marks the halfway point for the constitutionally mandated 121-day legislative session. During the week lawmakers received an updated picture of the state鈥檚 finances and President Pitney spoke with Senate Finance Committee members about the university system鈥檚 current operations and our budget requests.
On Tuesday, the Department of Revenue released the much-anticipated . The Revenue Forecast includes the department鈥檚 spring forecast of oil price, oil production, and state revenue. Lawmakers traditionally utilize the forecast as a fiscal outlook for the upcoming two years - it helps determine the bottom line lawmakers are willing to consider for the proposed budget. The updated forecast released on Tuesday projects that with updated oil prices, the state鈥檚 undesignated funds will climb by $3.6 billion over the next two years - an increase of $1.2 billion in FY22 and $2.4 billion in FY23 from the totals projected in the . The newly released forecast was developed using Alaska North Slope crude (ANS) estimates of $91.68/barrel in FY22 and $101 in FY23, an average price based on the five day window between March 9-13.
With the revenue forecast in hand, the House Finance Committee is now resuming conversations on the operating budget. With a potential budget surplus, legislators will have to decide how to best manage the excess. Conversations include funding deferred maintenance and critical infrastructure, boosting relief payments and PFDs, or putting dollars into the State鈥檚 savings accounts. . Even at $80/barrel, the state would still collect $6.7 billion in revenue in FY23 - a $770 million increase from last fall鈥檚 projections. The House Finance Committee will start considering amendments to the budget next week.
Positive revenue projections may bode well for the university system. On Monday afternoon, President Pitney presented a University of Alaska overview to the Senate Finance Committee. She reminded lawmakers of the drastic reductions the system has endured in the last decade. She shared the priorities for our universities moving forward and the strategies for meeting those goals. She highlighted the system鈥檚 budget requests and discussed the campuses鈥 deferred maintenance needs. Senators requested that President Pitney provide the committee with a list of the system's top $70 million in deferred maintenance priorities, a $20 million increase over the $50 million list of priorities initially provided. Senators expressed their concerns about the impacts of inflation if the university system does not tackle its deferred maintenance needs now.
Next Week鈥檚 Calendar
Monday, March 21
- 1:30 p.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
- 3:30 p.m. - Senate Resources: : 鈥淢icroreactors鈥
Tuesday, March 22
- 9:00 a.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
- 1:30 p.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
Wednesday, March 23
- 9:00 a.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
- 9:00 a.m. - Senate Finance: : 鈥淓ducation & Supplemental Loan Program鈥
- 9:00 a.m. - Senate Education: : 鈥淭eacher Registered Apprentice Programs鈥
- 1:30 p.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
- 1:30 p.m. - Senate Labor & Commerce: : 鈥淏roadband: Office, Grants, Parity鈥
Thursday, March 24
- 9:00 a.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥, : 鈥淎ppropriations: Mental Health Budget鈥 & : 鈥淎laska Higher Education Investment Fund鈥
- 1:30 p.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥, : 鈥淎ppropriations: Mental Health Budget鈥 & : 鈥Broadband: Office, Grants, Parity鈥
Friday, March 25
- 9:00 a.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
- 1:30 p.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥, : 鈥淎ppropriations: Mental Health Budget鈥 & 鈥淎ppropriations: Capital, Reappropriations, Supplemental鈥
- 1:30 p.m. - Senate Labor & Commerce: : 鈥淚ntellectual Property of Employees鈥 & : 鈥淎laska Education Savings Programs/eligibility鈥
Saturday, March 26
11:00 a.m. - House Finance: : 鈥淎ppropriations: Operating budget/loans/funds鈥 & : 鈥淎ppropriations: Mental Health Budget鈥
Federal Updates
In this edition of the Capitol Report, University of Alaska Federal Relations Director John Latini provides a brief overview of legislative happenings in Washington D.C.
Federal FY22 Appropriations Process Completed
Earlier this month, Congress passed and President Biden signed into law H.R. 2471, the Consolidated Appropriations Act, 2022. This $1.5 trillion consolidated legislation includes all 12 appropriations bills that fund the federal government. With passage and the President鈥檚 signature, this completes the FY22 federal budget and appropriations process, despite being well into the federal fiscal year already. A general summary of the consolidated measure can be found and more specific information can be found. The 多多直播 Office of Government Relations is working on a comprehensive summary of the Consolidated Appropriations Act which will be distributed at a later date.
For the first time in more than a dozen years, Congress included Congressionally Directed Spending (CDS), commonly referred to as earmarks, in the Consolidated Appropriations Act. 多多直播 secured nine earmarks for a total of approximately $20 million. 多多直播F received five earmarks, 多多直播A received three earmarks and 多多直播S received one earmark. These federal funds will enable 多多直播 to conduct research on counter unmanned aerial system technologies to support law enforcement operations and preventing military suicides in remote areas including Alaska, and to expand the Alaska Native Science & Engineering Program (ANSEP). Senator Lisa Murkowski and Congressman Don Young were particularly supportive of 多多直播鈥檚 earmark and general appropriations requests in FY22. Senator Dan Sullivan also worked to support 多多直播 by helping to secure funding for the Ted Stevens Center for Arctic Security Studies.
Federal FY23 Budget & Appropriations Process Outlook
Congress is likely to begin working on the FY23 budget and appropriations process right away. We expect the Congressional Appropriations Committees to release the rules governing the earmark and general appropriations request process for FY23 in the next week or two. The 多多直播 Office of Government Relations has received all 多多直播鈥檚 earmark and appropriations priorities for FY23 and is working diligently to submit requests to the Alaska Congressional Delegation.
We expect the Biden Administration to release its FY23 budget request sometime between mid-April and mid-May but timing remains very fluid. Once the budget request is released, the 多多直播 Government Relations team will provide a robust summary of key priorities of interest to 多多直播.
In the coming months, Congress will hold hearings and markup some of the FY23 appropriations bill that fund the federal government. However, given that Congress has not passed an appropriations bill on time in more than 20 years and it is an election year, we can expect a Continuing Resolution (CR) that will fund federal agencies at current FY22 levels until late November or December. The outcome of the midterm elections will be a key factor in determining when the FY23 budget and appropriations process could be completed.