A key part of Governor Mike Duleavy’s long term budget vision includes fundamental changes in how the legislature is allowed to appropriate money. The governor has proposed three constitutional amendments, and this week, began a roadshow hoping to drum up support.
Monday night’s privately funded, quasi-public presentation at the Cannery Lodge in Kenai was much like Dunleavy’s campaign appearances from last fall, but with a bigger supporting cast and a few more numbers.
Attorney General Kevin Clarkson is tagging along for the budget roadshow, as the Governor calls it, because Dunleavy has proposed three constitutional amendments as part of his long term financial vision for the state. One would lower the cap on appropriations. A similar effort in the form of a senate bill failed last year.
“What we need is a limit that’s going to have some meaning and some effect," Clarkson said. "And what the Governor proposes is an amendment that caps spending at a sustainable level, and allow growth based on population and inflation. So as we grow in population, as inflation increases, the spending limit will adjust," Clarkson said.
Under that amendment, if the state brings in more than it’s allowed to spend, the extra would go toward paying PFD checks that were cut in past years. The amendment would also do away with the constitutional budget reserve, replacing it with a fund that would have its own spending limits. Another proposed amendment puts tax questions before voters statewide.
“There are two ways that new taxes or increased taxes can occur; it can start with the legislature. If the legislature creates a law or changes a law so that there’s a new tax or an increased rate of an existing tax, that law will only go into effect if the people of Alaska, at the next general election, agree that that should occur," Clarkson said.
A third would make permanent the formula used to calculate PFD checks. Both the governor and the legislature have disregarded the current formula in the last two years in order to send smaller dividends in an attempt to close the budget gap. The issue eventually wound up at the state Supreme Court, which said that without the constitutional amendment, the PFD appropriation was subject to the same political process as anything else.
“So you have no predictability about whether you’ll get a dividend and what amount of a dividend you might get. What this amendment will do is establish in the constitution the right of Alaskans to receive a permanent fund dividend. It will take the existing statutory calculation and lock it in place. The legislature will be permitted to change that if they want to, if they can get the votes to do it, but the only way that will take effect is if the people of Alaska agree that should occur.”
So, like a tax hike, any change to the PFD would also be contingent on a popular vote. But constitutional amendments aren’t easy to get through. On purpose. It takes a two-thirds vote of both the House and Senate AND it has to win a majority of votes at the next general election. If Dunleavy’s amendments pass the legislature, they could be on the ballot next year.