As Alaskans take various and mostly predictable positions on Gov. Mike Dunleavy’s proposed budget reductions, a theme seems to be emerging in the Legislature. Legislators are far from reaching any kind of consensus, yet it’s possible to discern some common elements that presage a possible outcome down the road.<\/p>\n
In the face of Alaska’s projected $1.6 billion deficit, to no one’s surprise, some voices demand passage of new revenue measures — a statewide income tax or a sales tax. Others argue steep budget cuts are necessary even while Permanent Fund Dividends be enshrined in Alaska’s Constitution and are essentially untouchable.<\/p>\n
Given the current makeup of the Legislature, it’s not likely any of these scenarios will come to pass this year.<\/p>\n
The governor’s proposals, while balancing the budget, depend on an array of debatable statutory and policy changes. These are far-reaching and, in some cases, invite lawsuits and leave to the imagination potential consequences down the road.<\/p>\n
[Opinion: Gov. Dunleavy follows through on campaign commitments]<\/a><\/ins><\/p>\n Nevertheless, Dunleavy deserves credit for finally forcing Alaskans to discuss the fiscal reality confronting us.<\/p>\n In the Legislature, even conservative voices supporting budget reductions are distancing themselves from the level of cuts being contemplated by the administration.<\/p>\n No doubt they are being influenced by the municipalities they represent.<\/p>\n Many proposed cuts would effectively shift much of the reductions to municipalities across the state. This puts questions of “needs vs. wants” squarely in the laps of local taxing authorities where, some would argue, they belong.<\/p>\n But, the wheels of bureaucracy move slowly, and to assume local governments could possibly react in time to absorb these reductions by either raising taxes or canceling projects and services overnight is not reasonable.<\/p>\n [Opinion: Time for budget honesty]<\/a><\/ins><\/p>\n Furthermore, proposed cuts to the ferry system, health care and education, for example, require time to analyze for reductions to make sense.<\/p>\n Regardless of one’s feelings about proposed reduction levels, it seems many Alaskans prefer a more realistic approach that phases reductions in over time.<\/p>\n The House Majority Coalition is signaling a tax is off the table this year, and to expect budget cuts. “The sheer complexity of taking on the proposed change to the budget itself will consume most our time going forward,” House Speaker Bryce Edgmon said recently. Edgmon said he’s asked caucus members to “help share the pain.”<\/p>\n Senate Finance Committee Co-Chair Natasha von Imhof explains it this way, “I keep hearing the administration referring to this ‘fiscal crisis.’ We don’t have a fiscal crisis. We have a priority crisis. We have enough money to pay for a certain level of government services, and a certain level for a dividend. We just don’t have enough money to pay for both at the highest level desired.”<\/p>\n