Alaska's Fiscal SituationBy Rep. Dan Ortiz December 01, 2017
When I first took office three years ago, the state’s annual revenue was declining by 85% or more. I knew that the primary job of the Legislature was to significantly reduce government spending. In 2015, I voted for over a billion dollars’ worth of cuts in state spending. The operating budgets of the State and the Legislature have been cut almost in half during my time in office, and the capital budget has been reduced to a bare minimum. Of course, those reductions came with a significant cost. Because we have reduced the combined capital and operating budget by 44%, there are significantly less state jobs. Today, 2,800 less people working for the state than 3 years ago, which equates to a 12% decrease in the state workforce. Department spending has decreased on average by 23%. Pertinent to our fishing industry, the Fish and Game Budget was slashed by 35%, making it harder for the department to manage our state fisheries to the maximum sustainable yield. In some instances, certain fisheries and gear groups, and the families they provide for, lost fish catch opportunities because the Department didn’t have adequate funding to get all the escapement data that they had collected in years of more robust funding. The Alaska State Capital budget has been cut to the bare minimum to meet federal match requirements. A very small capital budget means we have mounting deferred maintenance issues with transportation infrastructure (ferries, roads, airports). There are also less jobs available for our private construction companies, resulting in significant numbers of workers being laid off in that industry. The other half of agency spending that my colleagues and I have not taken a knife to are valuable to our communities and economy. Except for specific reductions, there are not significant cuts left to make. The Republican-controlled Senate discussed making a 5% cut to Education funding and closing two Alaska Pioneer Homes, but were unable to muster a majority of votes in that body to make it happen. There may still be small, surgical cuts to make in agency spending. If you know of projects or spending practices that aren’t valuable, please contact me at 247-4672 or email me at rep.dan.ortiz@akleg.gov. I am always looking to shave the fat in our budget. Despite the significant reductions to state spending, we continue to have a $2.7 billion budget deficit. For the last six years, Alaska’s budget deficit has led the state to burn through at least $13 billion in savings. We only have $2.1 billion remaining in the Constitutional Budget Reserve Account, which means we no longer have the option of “balancing” our budget by using savings. On June 22, 2017, the House sent over a compete and balanced budget to the Senate. It included an end to cashable credits to oil companies, restructuring how we use the Earnings Reserve Account of the Permanent Fund, and an income tax. No one wants to pay an income tax – myself included – but the estimated $700 million that it would generate in revenue would fix the problem of our budget deficit. An estimated 15% of that revenue would have come from non-resident workers. Like in our household budgets, we can cut spending until our Xtratuffs have holes as big as the potholes on Tongass. Eventually, too much cutting hurts our ability to climb out of a tough fiscal situation. It’s impossible to have a competitive and functional economy without infrastructure or basic community services. I will continue to find, propose, and vote for sources of revenue that will help eliminate the deficit and protect vital services. Respectfully, About: Ortiz is an independent member of the Alaska House of Representatives, who has since 2015 represented the 36th District. Editor's Note:
Received November 30, 2017 - Published December 01, 2017 Related Viewpoint:
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