Governor Walker, Mat-Su Assembly discuss budget cuts

At the end of last month, Governor Bill Walker vetoed items in the state budget totaling nearly $1.3 billion. Walker says the vetoes were necessary in order to cut state expenditure at a time of significant revenue shortfall.

“There’s nothing on the horizon that’s all of a sudden going to turn the situation around. We would need to have about 1.8 million barrels of oil in a pipeline that has 500,000 barrels today. We’re going to need to have oil at $120 a barrel that is $45 today. Neither of these is going to happen. I just can’t make decisions assuming that’s going to happen.”

The most controversial of his decisions was effectively capping this year’s Permanent Fund Dividend check for each Alaskan at $1,000. Beyond that, however, many cuts have effects that are trickling down to municipalities. For example, Governor Walker’s decision to scale back reimbursement for school bonds means $5.7 million less in revenue for the Mat-Su Borough. With the borough budget already complete, the Assembly has held two special meetings to discuss options. Borough Manager John Moosey says he has a plan that will get the borough most of the way back to a balanced budget, starting with delaying capital projects.

“I think we can credibly save, based on your approval, about $3.76 million by pushing these things off until later.”

In addition, Moosey says union employees working for the borough will not receive a cost of living pay increase this year, and that all but emergency overtime is being cut. There is also a “soft” hiring freeze in effect. Even with those steps, Moosey says he thinks more will need to be done, and he plans to bring a more complete plan to the Assembly at its first August meeting.

At the state level, nearly all capital spending was cut out of this year’s state budget, including funding for the Port MacKenzie rail spur, a favorite project of the borough government. The assembly has backed the rail spur as a means to improve traffic at the underutilized port. Walker says he wishes that the situation had allowed for more infrastructure spending.

“I’m a big believer in infrastructure…even though I’ve made some of the decisions I’ve had to make. I think that’s the role of government, to create the infrastructure.” Walker says he believes that, had the state waited for private industry to create a highway, that one may never have been built.

Borough Manager Moosey’s plan for tightening the borough’s spending will likely be heard at the Assembly’s August 2^nd meeting.