Sen. Mike Dunleavy, R-Wasilla, believes he\u2019s found a way Alaska can erase its multibillion-dollar deficit and guarantee big Permanent Fund dividends \u2014 without tax increases.<\/p>\n
On Tuesday, Dunleavy \u2014 a member of the powerful Senate Finance Committee \u2014 unveiled a budget plan calling for $1.1 billion in additional cuts to the state budget. Those cuts would be spread across four years and would address about 40 percent of the state\u2019s $2.65 billion annual deficit.<\/p>\n
The remaining 60 percent of the deficit would be covered by a portion of the Alaska Permanent Fund\u2019s investment earnings.<\/p>\n
\u201cIt does not require new taxes; it does not require the taking or manipulation of the dividend,\u201d Dunleavy said by phone Wednesday.<\/p>\n
There are now effectively four proposals for balancing the state\u2019s deficit: one from Gov. Bill Walker, one from Dunleavy, one proposed (in outline) by the Republican-led Senate Majority, and one expected from the coalition House Majority.<\/p>\n
Under Dunleavy\u2019s plan, the Permanent Fund\u2019s earnings would be split 50\/50; half for dividends, half for government services.<\/p>\n
\u201cWe allow the dividend to be calculated as it always has been,\u201d he said.<\/p>\n
Dunleavy said his principal goals with the plan are to balance the budget, leave the dividend unchanged, and avoid taxes on the private economy.<\/p>\n
\u201cYou really don\u2019t want to take money out of the private economy as it\u2019s shedding jobs,\u201d he said.<\/p>\n
Dunleavy\u2019s plan \u2014 as do others circulating in the Legislature \u2014 relies on projections by the Permanent Fund Corporation about future earnings and Alaska Department of Revenue forecasts about future oil prices.<\/p>\n
The biggest obstacle to Dunleavy\u2019s plan is the cut. The governor\u2019s proposed budget for fiscal year 2018 includes $4.33 billion in unrestricted general fund spending, things that aren\u2019t paid for with fees, federal money or program-specific money.<\/p>\n
That figure is already 28.8 percent smaller than it was in fiscal year 2015, when the big cost-cutting started. Dunleavy\u2019s cuts would drop that figure to $3.23 billion, or barely more than 50 percent of the FY15 figure.<\/p>\n
\u201cThere\u2019s no doubt about it \u2014 that\u2019s going to be the sticking point,\u201d Dunleavy said of the cuts.<\/p>\n
Rep. Andy Josephson, D-Anchorage and a member of the House Majority, agreed with Dunleavy\u2019s assessment.<\/p>\n
\u201cIf he said it\u2019s going to be darn hard to do, he\u2019s right about that,\u201d Josephson said. \u201cWhile there are additional surgical cuts that could be made, I don\u2019t think there\u2019s a whole lot of additional cutting that could be made\u201d without significantly affecting services.<\/p>\n
In the extent of its cuts, Dunleavy\u2019s proposal is deeper even than that of his fellow Senate Majority members, who said in a statement last week that they intend to propose $750 million in cuts spread over three years.<\/p>\n
Asked whether Dunleavy\u2019s proposal represents a change from that plan, Senate President Pete Kelly, R-Fairbanks, said by email that \u201cThe caucus hasn\u2019t taken a position on it yet, one way or another\u201d and \u201cWe look forward to looking at Mike\u2019s plan as it works its way through the process.\u201d<\/p>\n
Dunleavy said he believes his plan is \u201cin many respects, very similar \u2014 if not the same\u201d as the previously announced Senate Majority outline.<\/p>\n
Both plans involve significant budget cuts, both plans involve spending the earnings of the Permanent Fund, both plans involve preserving a significant dividend, and both plans call for a firm spending cap to keep expenses low in future years.<\/p>\n
Even Josephson said some elements of Dunleavy\u2019s proposal appear to be a foregone conclusion \u2014 in particular, the use of Permanent Fund earnings.<\/p>\n
\u201cThat part of Sen. Dunleavy\u2019s plan, I broadly agree with it,\u201d Josephson said.<\/p>\n
While the two men might disagree about the details of using those earnings, \u201cit\u2019s the low-hanging fruit\u201d for balancing the budget, Josephson said, because it doesn\u2019t directly affect dividends or impose new taxes.<\/p>\n
Josephson and Dunleavy also agree on another important aspect of the budget: \u201cHe\u2019s also right that something must happen this year,\u201d Josephson said. \u201cHe\u2019s absolutely right about that.\u201d<\/p>\n
The 30th Alaska Legislature convenes Tuesday.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sen. Mike Dunleavy, R-Wasilla, believes he\u2019s found a way Alaska can erase its multibillion-dollar deficit and guarantee big Permanent Fund dividends \u2014 without tax increases. On Tuesday, Dunleavy \u2014 a member of the powerful Senate Finance Committee \u2014 unveiled a budget plan calling for $1.1 billion in additional cuts to the state budget. Those cuts […]<\/p>\n","protected":false},"author":426,"featured_media":3554,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[34,230],"yst_prominent_words":[],"class_list":["post-3553","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-alaska-legislature","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/3553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=3553"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/3553\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/3554"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=3553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=3553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=3553"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=3553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}