Governor Introduces Priority Setting BudgetHouse Majority Says Governor defers tough budget decisions to the legislatureEdited By MARY KAUFFMAN
December 17, 2019
“At first glance, it appears the Governor’s budget is not as draconian as last year. Unfortunately, this budget lacks long-term fiscal stability and vision for Alaska,” said Senate Democratic Leader Tom Begich (D-Anchorage). “With a $1.2 billion deficit this year, the state cannot solely rely on its savings accounts. Significant reductions to oil and gas tax credits are a must for Alaska’s long-term fiscal sustainability. I am disappointed the Governor did not take the lead on this issue. I look forward to working with members of the Legislature and the Governor to craft a budget that provides opportunities for all Alaskans to succeed.” “I am disappointed the Governor is moving forward with sending prisoners out of state, which tears families apart. It is cost prohibitive for visitation, especially from rural Alaska. The Legislature put money aside specifically for instate correctional facilities. To divert this funding is inauspicious, ” said Senator Donny Olson (D-Golovin). “We agree with the governor’s decision to not further cut the budget. However, spending is only half of the budget, and the governor is deferring to the legislature on how to pay for it. Alaska cannot afford to delay tough decisions another year,” said House Speaker Bryce Edgmon (I-Dillingham) in a prepared statement.
“The governor’s budget takes a short-term view. He is detailed about what he wants to spend but is shortsighted in his plan to pay for it. The legislature will hit the ground running in January, and we will work diligently with the administration to complete our work within 90 days,” said Rep. Neal Foster (D-Nome). Highlights from Governor Dunleavy’s FY 2021 budget announcement on December 11, 2019 in Juneau: Setting Priorities “This budget sets priorities. But these aren’t just my priorities, these are the things folks across Alaska told me, and told you over the past year. This budget recognizes the need for a broader conversation with Alaskans and the Legislature about what we desire from our state government.” Exercising Fiscal Discipline “First, we are exercising fiscal discipline. We have held on to the overall rate of spend that we achieved in our first year. This team gathered today continues to work diligently to change how government does business. They’re doing a fantastic job identifying ways to make government operate with greater efficiency. Keep in mind, and this is important, that before we can crunch the numbers, over half of the budget is built on formulas and obligations set in statute. “This year alone, we’re seeing increases of over $86 million in formula-driven spending. While formula programs are important, we must be mindful of budget growth and continue to find ways to mitigate the ‘automatic escalators’ in the State’s operating budget. Instead of adding these ‘automatic escalators’ to our overall budget, we have been successful in finding better ways to do business. We found savings through efficiencies, modernizations, and better delivery of government.” Honoring the Law “A second goal in this budget is that we’re going to honor the law. We are funding programs where the funding level is prescribed by statute. What does that mean? It means fully funding education, according to the statutory formula. It means staying within the permanent fund earnings reserve draw as directed by SB 26. And yes, it also means paying a full statutory dividend.” Provide Truthful Budgeting “A third goal is to give Alaskans numbers they can trust. I promised Alaskans that my budgets would be transparent. Budgets should not obscure fiscal realities by failing to present all relevant data concerning expenditures, revenues, and fund sources. My commitment is that whether the numbers are good or bad, Alaskans are going to see what we see. “This year, we’re taking this a step further. We’ve made the decision to present the most up-to-date budget information we have today, including current estimates for FY2020 supplemental requests, Alaskans deserve to see the big picture, the overall extent of state spending for the current fiscal year and proposed expenditures for FY2021.” Fulfilling Commitments to Alaskans “A fourth goal is to ensure that this budget fulfills the commitments I made to Alaskans. I promised we would get serious about tackling this state’s crime epidemic. This budget reflects that it’s going to take resources. We’ve added money to pay for more Troopers, more Prosecutors, and a fully funded Court System. In addition, I promised that we would follow the law and pay a full statutory PFD, and this budget does that. “Yes, we fully funded education. But I’m not accepting a dollar amount as a measure of success for our kids and teachers. Reading, and the push for academic excellence, aren’t line items in this budget, but those are what we’re focusing on. More on this to come. “Alaskans deserve better outcomes for the dollars we invest.” A Call to Action “Let me be clear, for over 30 years, people have stood at this podium and talked about the ‘need to get a handle on government spending.’ My friends, we don’t have the luxury of 30 years, or 30 months. Even this budget is not sustainable. It’s imperative that the legislature and all Alaskans engage in this conversation to ensure a stable and prosperous future for our state. “This budget is a call to action for all of us. Everyone in this room and across Alaska. It will be tough, but I have no doubt that together, we can do it. Even when we disagree, and we will, the goal remains the same; a stable and prosperous Alaska.” The FY21 budget totals $4.532 billion Unrestricted General Funds (UGF), $969 million Designated General Funds (DGF), $760.3 million Other State Funds, and $3.9 billion Federal Funding, reflecting a flat budget over FY 20. The FY 21 budget provides a full statutory PFD, fully funds K-12 education, and increases resources to public safety through the Department of Public Safety, the Department of Corrections, the Department of Law, and the Alaska Court System. Key items of interest in Governor Dunleavy’s priority setting budget:
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