For the last three sessions, the Alaska Legislature has been faced with multi-billion dollar budget shortfalls, and has had to borrow from its savings. Republican Senator Mike Dunleavy has released a plan he believes will allow the state to continue functioning without adding new taxes or finishing off its savings accounts. KTNA’s Phillip Manning has more.
On Wednesday, Senator Mike Dunleavy’s office released a plan that he believes could right the state’s fiscal ship and begin putting money back into governmental savings accounts within a few years.
The goal of Dunleavy’s initial plan is to utilize just over a billion dollars in budget cuts over four years and a reduced cap on increases in state spending. He says those measures will help make it so that the state can return to a net gain of revenue without imposing additional taxes or reducing payment of Permanent Fund Dividend checks each year.
The budget cuts could be done solely by the legislature in Juneau, but a change to the spending cap involves a constitutional amendment, which has to be voted on by the people. Senator Dunleavy believes whether that vote is successful would be a litmus test on how Alaskans want the budget problems solved.
“If [voters] reject the appropriation limit, I what would be interpreted from that rejection would be, ‘We want a larger government. We want more services, and we’d be willing to pay for it.’ So, I think it’s very important for the people of Alaska to get to weight in on fixing our fiscal issue.”
Senator Dunleavy also wants to see the state change the way it creates budgets in two significant ways. The first change is going from annual to biennial budgets. He believes that approving budgets two years at a time, especially in odd-numbered years, would allow legislators to make tough choices without being in the midst of a reelection campaign.
“Legislative sessions are two years, so if we’re able to get a fiscal approach in this year, it may be easier to extend that budget into next year without having to go through the debates every year. Next year, the House of Representatives is up for election, all forty, and ten senators will be.”
The other change Dunleavy wants to see is earlier collaboration between the legislature and the Governor when crafting initial budget proposals. Currently, the budget proposal comes from the executive branch in mid-December. Dunleavy says that makes it difficult for legislators, who begin session in January, to gather the necessary information to make important decisions on spending. His solution would be legislative committees made up of minority and majority members from both houses that work with the executive branch earlier in the process.
“These committees work with the Governor’s office, work with his administration: his directors, his commissioners, heads of his divisions, etc., and look at areas we can reduce. Hopefully we could get a preliminary budget out before December 15th, and folks would have a chance to look at it.”
A major portion of the plan involves cutting a total of $1.1 billion from the state’s annual budgets. Under Dunleavy’s proposal, those cuts would occur over the course of four years. He believes that gradual cuts would allow state positions to be eliminated through attrition and reduce the number of layoffs that would occur if the cuts came all at once. Senator Dunleavy says he plans to have a list of proposed budget cuts ready for public discussion within the next two weeks.
Planning to close the fiscal gap primarily through budget cuts could hinder progress in the House of Representatives. After being under Republican control for years, a coalition of Democrats, independents, and a few Republicans have set up a new majority caucus. Dunleavy believes the three Republicans who crossed over have good reason to want to consider budget solutions as a high priority.
“One of their stated reasons for doing that is they feel that we weren’t getting anywhere with a resolution on the fiscal issue. If that’s true—If that’s what they truly believe–and I have to believe what they said, then I have to think that they’re going to be working very hard with all of us to come up with a fiscal solution.”
Other proposals that have been put on the table include taxes, changes to the permanent fund, budget cuts, or some combination thereof.
The legislative session begins in Juneau on Tuesday.
