to Pay Back Budget Reserve Account
August 20, 2006
Alaska Governor Frank H. Murkowski announced Saturday that he proposes to pay back the state's primary savings account with the additional revenue that the state will get because of the passage of the governor's oil tax increase.
"This recognizes the obligation the state has under Alaska's Constitution," Murkowski said. "When voters approved creation of the Constitutional Budget Reserve (CBR) in 1990, it included a requirement that monies borrowed from it be repaid. That has not yet happened, but now would be a good time to start."
Quoting the Governor's news release, since 1994, prior administrations have used more than $3.8 billion from the CBR to cover annual spending. Another $1.4 billion is owed to cover previous borrowings and other transfers, bringing the total due to $5.2 billion in inherited debt.
The governor detailed his plan to re-pay this constitutional obligation from the revenue to come from the increase in the state's petroleum production tax (PPT) signed into law Saturday. For fiscal year 2007 an additional $2.2 billion in revenue is forecasted based on current oil prices, in spite of the drop in oil production due to the partial shut-in of Prudhoe Bay.
"While it is tempting to give into the suggestions others are now making on how to spend this new wealth, the most responsible action we can take is to commit to Alaska's future by re-filling our savings," Murkowski said. "Some would like to spend this extra revenue on new state programs or capital projects. Others would like it to go into the Permanent Fund. Those ideas have merit but, again, I believe the CBR savings account is our first obligation."
Publish A Letter on SitNews Read Letters/Opinions