$3 Billion Annual Budget Deficit

With falling oil prices a year ago, Alaska has developed a $3 billion annual budget Deficit. It’s pretty significant. One could lay off ALL state employees and we’d not scratch $1 billion.

The first session of the last Republican led coalition worked really hard and cut some very important services, but everything they cut was overtaken by further falling oil prices. They didn’t get far down the line of considering added revenues.

Fortunately, the governor has been working to inform Alaskans about this issue through his Building a Sustainable Future initiative and I suspect he hopes that, when we have a better understanding of the scope of the problem, we might accept some revenue enhancements or changes in our Permanent Fund dividend (NOT the purpose for which the Permanent Fund was created).

Last Wed., we heard from Alaska Commissioner of Revenue Randy Hoffbeck who laid out the scope for the 60 or people so present. He pointed everyone to a free spreadsheet you can download and play with to see how YOU might balance the budget.

Two former Alaska senators also offered their perspective.

It will be interesting to see what the Legislature comes up with this session. My guess is not much, other than reducing services – the austerity plan. It would be nice if they actually tried to work WITH the governor, but I think it will take getting some serious statesmen/women elected in 2016 to make real progress.

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