Governor, staff, defend budget plan

Apr 1, 2019

Governor Mike Dunleavy brought quite a few high-ranking members of his administration to Kenai on Monday to help him pitch his fiscal plan. Joining him at KDLL were Revenue Commissioner Bruce Tangeman and Donna Arduin, the budget director.

The governor pushed a long-term fiscal plan while in town, saying it was possible, with all the cuts proposed in his version of the budget, to get from here to his proposed constitutional amendments.

“This plan is multifaceted. The other side they're just looking at 'how do we get through this year, how do we get through next year,' they're really not talking about future years. This plan gets us through this year through reductions, but also through the constitutional amendments in which we would ask the people of Alaska to have an opportunity vote on the spending limit, the savings limit, for example, would hem us in so that we get back to that traditional two-, two-and-a-half percent spend per year,” Dunleavy said. “I mentioned in '07 that spending increased dramatically between '07 and 2013 we spent 15 percent a year. That is unsustainable by any measure. We've lowered the budget since then but we're still spending between 2007 and 2019 5 percent, four-and-a-half to 5 percent a year. That's still is unsustainable. So yes we can reduce the budget this year we can get to a sustainable budget, but in order to lock it in you need to constitutional amendments.”

Arduin defended the governor’s budget, which envisions drastic cuts to education at all levels, as well as zeroing out arts and humanities.

“The governor is promoting a long term fiscal plan. So the budget reductions are part of it. And you know, wouldn't have had to be 1.6 billion in one year if we'd started in fiscal year ’14, when the state stopped balancing its budget and started spending it savings down. But we're not to the point where we've spent down all of our savings, and we have to make the reductions,” she said. “But more important, the governor's promoting a long term fiscal plan. So his spending limit his, savings plan going forward will keep us from getting into this problem again in the future.”

Many Alaskans have offered up their Permanent Fund Dividend as a sacrifice to keep cuts from going so deep. Tangeman says that would amount to a stop-gap.

“We could all give up our dividends this year, and probably be okay. Next year maybe so. The year after, now we're starting to overdraw. We're starting to break that law that says you can only take X amount out of the earnings reserve. So unless you get your spending in order, you're going to have to start overdrawing the only revenue source that we have left. So while it's great, it seems like hey, we don't really have to deal with spending at all, we'll just use revenues to fix the problem. It's a short term fix. And we're trying to solve this problem for this generation, next generation, future generations,” he said. “If we don't get our spending in order, all we're doing is putting, doubling-down on the amount of problems that the next generation is going to have.”

Several dozen residents who could not get in to see the governor’s “road show” Monday night protested on Cannery Road, calling for a reduction in proposed cuts, mainly to those aimed at education.