The billion dollar question on Monday night was what the state of Alaska should do about the gap between its revenue and expenses....
DILLINGHAM: Declining oil revenue means Alaska faces a gap between income and expenses in the coming years. Dillingham was asked to weigh in on new revenue sources and potential cuts during a Monday presentation. KDLG's Molly Dischner reports...
Using an interactive model, state budget director Pat Pitney showed 30 or so attendees at a presentation on the state’s finances how changes to spending and revenue would affect the budget. The options include creating new taxes and cutting costs.
Pitney said without a change, the state will run through its reserves in the next couple of years.
“Without putting something sustainable in, the choice will be earnings reserve and spending," Pitney said. "Once we’re done with the CBR, those are the choices. There will be very harsh controversy between those two.”
In a couple weeks, the governor’s office expects to release a plan for the state budget that could include a cap on permanent fund dividends so that the earnings can be used for state operations. The plan will incorporate feedback from communities like Dillingham.
“So it’ll have spending targets," Pitney said. "It’ll have revenue targets. It’ll step up over time."
Pitney says the meetings she and Department of Revenue Commissioner Randy Hoffbeck are having in communities around the state will inform the governor’s final plan.
Former legislator Mike Davis said the interactive presentation was a good way of articulating the problems lawmakers face when looking at the budget.
“and the importance of doing something, and not putting it off. I think that was certainly a strong theme tonight," Davis said.
Other attendees say that message has come through loud and clear, including Robert Heyano.
“I like the presentation where she was able to punch in the numbers and see what it does" Heyano said. "I’m convinced we’re not through with seeing cuts and I’m convinced there’s going to have to be some additional revenue.”
Kevin Tennyson had his pick for one new source of revenue.
“I just wish the state would have an income tax," he said. "That would help out the problem.”
But Pitney and local Rep. Bryce Edgmon cautioned attendees that it may be difficult for the legislature to agree on a path forward this winter.