This editorial first appeared in the Fairbanks Daily News-Miner:
The Alaska Legislature still hasn’t decided to make meaningful progress toward closing the $4 billion budget shortfall the state faces in the coming fiscal year and how to deal with the certain mammoth budget deficits expected in succeeding years. Yes, we have enough money in our savings accounts to fill the void this year and maybe next, but the situation will be disastrous if the Legislature chooses that path. Say goodbye to your Alaska Permanent Fund dividend — all of it — for good.
Gov. Bill Walker put forward, at the outset of this year’s legislative session, a comprehensive plan that involved restructuring the $54 billion permanent fund to use some of that rainy-day account’s earnings to help pay the cost of our government and to ensure the continued distribution of the annual permanent fund dividend, albeit at a reduced though still substantial amount. Other components of the governor’s plan include additional budget cuts; changes to mining, fuel and fishing taxes; and major revisions to the state’s law on oil and gas tax credits.
The permanent fund component is without question the backbone of the plan, the piece that will do the most to close the budget gap. It alone would cover about $1.6 billion of the coming fiscal year’s projected deficit. Dividends would be guaranteed at $1,000 for the next three years under the legislation and then are expected to remain at about that amount in subsequent years, though there would be no guarantee at that point.
The Senate has passed the permanent fund bill; the House has not.
If the Legislature doesn’t do anything else toward solving the budget crisis, it must at least pass the permanent fund bill.
Our lawmakers have already run well beyond their annual session’s scheduled adjournment date without resolving the dire situation, and the July 1 start of the fiscal year is less than three weeks away. Legislators have passed a budget that draws about $3 billion from the $7.8 billion in the Constitutional Budget Reserve, but that account will be emptied quickly unless the state makes some fundamental changes to its finances. Restructuring the permanent fund is essential.
Legislators have taken far too long in addressing the tough decisions that need to be made. Tell them what you think. Tell them to act now for a financially stable future for our great state.
