Legislature's comprehensive fiscal plan working group first meeting is Wednesday - Must Read Alaska
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HomePoliticsLegislature’s comprehensive fiscal plan working group first meeting is Wednesday

Legislature’s comprehensive fiscal plan working group first meeting is Wednesday

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A joint special legislative working group to propose a “comprehensive fiscal plan” for the state’s budget is on the legislative calendar for Wednesday at 1 pm, in the Anchorage Legislative Office’s Denali Room.

The group was created at the request of the House at the end of the special session in June, and is meant to formulate a plan to pay for government, a proposal that would be considered by the Legislature in the August special session that has been called by the governor to take up remaining budgetary matters, including the amount of the Permanent Fund dividend this year.

Gov. Mike Dunleavy vetoed the $525 Permanent Fund dividend appropriated by the Legislature, saying it was an insult to Alaskans, considering Alaska statute says this year’s dividend would be well over $3,000. The law that establishes the formula has been broken since Gov. Bill Walker arbitrarily cut the dividend in half in 2016, and many in Alaska want the law to be followed or changed , but not broken annually.

The Fiscal Year 2022 total budget amounts to $12 billion in all funds, with $4.3 billion in Unrestricted General Funds, and at least $1 billion is from federal Covid-19 relief money.

To compare, total expenditures in fiscal year 2021 were $11.3 billion, but revenues were $10.3 billion, leaving a fiscal gap of $863 million.

Last year, the Percent of Market Value (POMV) draw from the Earnings Reserve Account of the Permanent Fund was $2.4 billion to be used for government. About $680 million was drawn from the ERA for payment of the Permanent Fund dividend to Alaskans. The legal statutory draw for the dividend was $1.2. billion, but legislators cut the dividend for the fourth year after Walker’s 2016 veto of the dividend.

The meeting will be streamed on Gavel Alaska.

Read: Budget error makes it harder for Legislature to pay itself per diem in August

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • In round numbers a $12 billion annual budget is about $16,500 for every Alaskan – every man, woman and child; over $65,000 for a family of four. That includes incarcerated Alaskans, people living on SNAP and Section 8, people in nursing homes on Medicaid (having exhausted personal savings in the first month or two of care), about 100,000 government employees and employees of nonprofits living off government funding, and the Alaskans producing oil, mineral aggregate, and fresh and frozen fish. Can anyone not see that $65,000 for a family of four Alaskans is an unsustainable state spend? Are there legislators stupid enough to actually believe that this is an imbalance that can be brought right by an income tax?

  • I have not heard who is on the committee.

  • If this comprehensive fiscal plan does not involve substantial spending cuts then it is all for naught.

  • In a radio interview program today Senator Jesse Kiehl said he has asked to be one of the eight on the committee. Being from the state capital and a Democrat he spreads the untrue myth that the state budget has already been reduced, and he is a lobbyist for greater and greater state spending. In the interview he did not attempt to hide his disgust for the Governor, and he certainly carried water for the public employee unions. He predicted the Governor’s vetoes will be overridden and he believes House Republicans will cave on the CBR sweep in the next special session (without achieving real budget reductions of course). He indicated the Governor doesn’t return (his) phone calls. My own prediction is that if placed on the committee Kiehl would be a very unconstructive participant. Kiehl exemplifies how we Alaskans overspend and have wasted years failing to address the most simple arithmetic challenges.

  • Suzanne: “Bill Walker arbitrarily cut the dividend in half in 2016, and many in Alaska want the law to be followed or changed , but not broken annually.”

    I wouldn’t call it arbitrary. and it was the only act Bill Walker ever did on the budget that I approve of. His income tax proposal was dumb. So Bill Walker cut the statutory Dividend ONCE and the Legislature has now done it 6 TIMES? I would not heap much blame on Bill for our situation. Politically, he took the brunt of the blame.

    Claiming the law is broken is misleading. The law is “not followed” legally by the Legislature for good reason – it would be incredibly irresponsible and unaffordable. The problem with “changing the law” is that we can’t agree on what it should be “changed to”. Anybody that tinkers with the current law is in extreme peril politically by touching it with a pole measuring 10 feet or less.

    The only law that needs to be followed is the 5% POMV. That is the front line in the battle of the budget. Unfortunately about 15% more of the Permanent Fund could be raided with a single majority vote. That is why a constitutional revision to the Permanent Fund limiting the annual draw to 5% is probably necessary. The Constitutional Budget Reserve Fund would then fulfill its originally envisioned role to serve as an emergency fund for extraordinary costs.

    • “The only law that needs to be followed” – spoken like a true Slaver.

  • I just did a search and came up with the report from the Bicameral Permanent Fund Working Group
    dated January 20, 2020. The members of the working group were about as astute as we can hope for.
    The last line in the executive summary:
    “A majority of members agree that use of permanent fund earnings for state services and dividends must stay within draw limits established by a structure like the percent of market value law enacted in 2018.”
    ‘Nuff said

  • The amount of money we pay these folks and their FAT, WELL paid staffers for NOT doing their job is the very definition of insanity

  • I have now seen the committee list. The deck is stacked. A majority of Alaskans oppose a state income tax but only 3 on the committee, Hughes, Carpenter and McCabe, oppose an income tax. Once again leaders in the Legislature are trying to fool us. That worked poorly this year with the budget effective date, the reverse sweep and the PFD amount, and therefore the Senate Finance Committee and the House Majority thought they would try it again. Poor and dishonest leadership is how we spent $20 billion in one-time savings with nothing to show for it.

  • The “Republican” Senate majority has chosen DEMOCRAT Lyman Hoffman as one of their members of the committee. The Alaska GOP is just another wing of the Democrat Party

  • I too oppose an income tax. I really can’t imagine that the committee will recommend an income tax OR overdraw from the 5% POMV in order to boost the Dividend.

    What we really need is a Constitutional limit on the draw from the Permanent Fund.
    There would be a defined amount of money predictably available from the Permanent Fund every year. This year the amount drawn under POMV is $3.1 Billion – how lucky we are!
    If you want a bigger Dividend you are going to have to cut other government programs or face a Hobsons Choice of raising revenue by imposing taxes on the People or increasing taxes on oil companies.

    With a constitutional limited POMV draw, the annual legislative and electoral battles will be fought between bigger dividends and bigger government. We should avoid at all costs a battle between bigger dividends and bigger taxes.

    • Chris,
      “you are going to have to cut other government programs” if you said this more often I might believe you are a conservative, or even a Republican. Cutting the spending levels that are extremely bloated is what needs to happen. We do not need a tax, we do not need to cut the dividend, we need to cut the astronomical levels of spending.

    • +1 for Chris. If we could only get one thing done, the most important would be to constitutionalize the 5% POMV.

  • I hope the Department BRU’s are printed out for constituents to read and for last year’s. Read and compare their justifications. The world has changed. We have a new monarch of America who seems to be in lockstep with the withering globalists who will not be allowing wealth to accrue in this state. We don’t need departments with nothing to do – no mining land or water or anything else. Also, if these departments provide service for real they need to be at their work locations to provide those services not lounging at home. That is NOT service.

  • Look at those BRUs and
    read them closely. Act like it’s your home maintenance budget. It is.

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