Budget Breakdown
The governor's budget proposal came out this week and there's a lot to talk about.
First up: the governor submitted a supplemental budget that would be one of the biggest in a long while. A supplemental usually covers unexpected expenses in the current year (the regular budget deals with the year to come.) Some of that is unavoidable—with the bad fire season we had up north last summer, we need to cover more costs. But some of it was completely predictable. The governor is asking for more than $250 million in additional Medicaid money, for instance. His proposed cuts and vetoes last year went below what his own departments said they could achieve, after all.
For next year's budget proposal, the governor suggests roughly the current spending level (keeping the big cuts the legislature made this past year, plus his vetoes.) There are still some more cutbacks on his list. I'm working through the agency budgets now to track all of the proposals. Once I find them, we'll see whether they make sense for Alaska.
The governor also proposes doubling this year's PFD amount next fall. But his proposal has no new ideas for state revenue. That extra billion dollars would force us to cut the budget more deeply than he proposed last year or radically spend down our savings. This year's proposal is the latter.
That's not a solution for the long term. Spending down our savings will just force future legislatures to make drastic cuts to the budget and the PFD both, leaving Alaska without a safety net or a sustainable fiscal future.
Bottom line: Alaska needs revenues. We can revise our oil tax system, where we're leaving money on the table for a resource we Alaskans own. We also need some sort of broad-based tax—like an income tax—to connect a growing economy with the funds state government need to enable that economy. An income tax would also ensure out of state workers pay their fair share. In the past, the governor threatened to veto any revenue measures, but I hope there's room for a serious conversation this session.
