ANCHORAGE DAILY PLANET
With the Department of Revenue spring oil price and production forecast due in a few weeks, with Senate leaders struggling to find a way to reduce the shock of shrinking the state budget by $1.6 billion and time ticking away, some lawmakers are looking for an easy way out.
Some of them – surprise – are thinking about turning to the Permanent Fund dividend to ease the pain of the huge spending reduction and spreading it over two or three years. That would be a bad idea.
That Gov. Mike Dunleavy’s proposed balanced budget will be modified by the Legislature as it rushes to protect its sacred cows is unarguable, but Dunleavy ran on paying a PFD as per state law. It will be interesting to see how far he will go using his bully pulpit or his veto pen to deliver what he promised. The Legislature sets the budget, but Dunleavy can make it sorry.
Dunleavy, if you will recall, also vowed he would balance the budget, repay Alaskans three years of dividends short-stopped by former Gov. Bill Walker and the Legislature, and said he opposed an income tax.
All that is a tough sale, and we do not envy legislators in Juneau wrestling with the nearly impossible task of shrinking state government, and attempting it without even knowing for certain how much revenue the state likely will receive in the coming year. Lawmakers rely on oil price projections in an incredibly volatile market. Instead of fixing that problem years ago by forward-funding government while the treasury was full, lawmakers are left to shadowbox in the dark.
If nothing else, the $1.6 billion budget reduction has been a wakeup call, an eye-opener, for lawmakers and ordinary Alaskans alike. Keeping in mind that 145,631 Alaskans voted for Dunleavy’s agenda, you have to wonder whether lawmakers actually will turn to cutting the dividend in lieu of cutting government.
From where we sit, if they do, there will be lots of new faces in the Legislature soon.