Proposal to Fill Alaska’s $2.7 Billion Budget Gap Revealed
Mar 03, 2017 06:02 AM EST
Leaders of the Alaska Senate have revealed a proposition to fill Alaska's $2.7 billion budget gap with the profit of the Alaska Permanent Fund and broad cuts to the state's four biggest agencies. Those affected are education, the University of Alaska, transportation, and health and social services. The proposition also incorporates a cap on future spending.
Senate Bill 70 was presented at Friday's Senate floor session, taking after a joint session of the Alaska Legislature that highlighted an address by U.S. Sen. Dan Sullivan, R-Alaska.
The bill covers the Permanent Fund spending, spending cap and new policies for the Permanent Fund Dividend. Budget cuts are included into a different bill, as reported by ADN. In a question and answer session Friday morning, Senate President Pete Kelly, R-Fairbanks, said the answer for the state's monetary issue is difficult, however it is simple and straightforward.
The Senate Majority's proposition varies from a solution proposed in the House. House Bill 115, bolstered by the coalition House Majority, incorporates a 1.5 percent salary charge and additionally spending from the Permanent Fund's investment profit. According to Kelly, they are not envisioning taxes at the moment.
The House Majority has favored less cuts than the Senate as members from the House have indicated the way that the Legislature has cut the adaptable portion of the financial plan by some 44 percent since fiscal year 2013, when undesignated general reserve spending came to $7.8 billion. In fiscal year 2017 (current) that spending is just $4.4 billion.
Despite those cuts, the fall in oil and gas costs has left Alaska with a gigantic deficit. Based on the evaluations from the Alaska Department of Revenue, the state is relied upon to gather just $1.7 billion from taxes of numerous sorts this year, and the state's principal saving account, the Constitutional Budget Reserve, will be empty by 2019.
Neither the Senate Majority nor the House Majority's proposition erase the state deficit in one year. They settle the greater part of it, instead, and buy time for different parts of a permanent fix. The Senate Majority's arrangement calls for $300 million in budget cuts this year, then $450 million more throughout the following two years combined.