Governor's Budget Proposes Economic Recovery Payment to Alaskans, Job Creation & Infrastructure Development
Overall Budget Cut $290 Million
Posted & Edited By MARY KAUFFMAN
December 15, 2020
Governor Dunleavy said, “This year has presented Alaskans with challenges unlike any we’ve experienced in this lifetime. The widespread global pandemic led to economic devastation for every sector of Alaska’s economy. In the face of this, Alaskans adapted and overcame many hurdles, successfully completing a construction season and a safe fishing season. The state and federal government partnered to distribute $2.3 billion of Federal CARES Act funds to Alaska businesses, $1.3 billion to Alaskan workers, and $568.6 million in community assistance.”
“A key piece of my proposal is the economic recovery payment – the remaining portion of the 2020 PFD. This would provide Alaskans with $1900, driving $1.2 billion into the economy. Alaskans and the private sector need assistance now. Businesses that have been devastated, and Alaskans that are suffering, will benefit from immediate action by the legislature placing money into the people’s hands by March,” said Dunleavy.
“To put Alaskans to work, I am proposing the first statewide bond proposal in nearly 10 years. This $300-350 million package would fund roads to resources, renewable energy projects, ports, harbors, runways, bridges and other essential projects. I will work with the Legislature and take this to a vote of the people this spring. Projects mean jobs now, and critical infrastructure for all Alaskans.”
Dunleavy said, “For years, the PFD has been used as a political football supporting an unstable budget. Now is the time to act, to eliminate this instability and provide fiscal certainty for Alaskans.”
“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. Let’s dream big – let’s move forward together”
Senator Democratic Leader Tom Begich (D-Anchorage) released a statement in response to the Governor's proposed budget.
Begich said, “Today, I am cautiously optimistic about the direction of Governor Dunleavy’s budget. But, as with all legislation, we will have to dig into the details to ensure we do what is best for Alaskans. As Alaska begins to come out of this pandemic, an overall budget cut of $290 million, and significantly overspending the earnings reserve, could damage our economy. We will continue to reach out to all members of the Senate to identify consensus with the budget proposal and where we have disagreements."
Begich said, “This year’s historical level of earnings from the Permanent Fund could very well represent Alaska’s last opportunity to build a sustainable Alaska future. Reinvesting some of these earnings directly into the constitutionally protected Permanent Fund must be a critical component of any budget plan. During the budget process, our caucus will stand firm in protecting a quality public education, health care, and building a vibrant economy that Alaskans will be proud of.”
In response to the Governor's proposed budget announcement last week, House Speaker Bryce Edgmon (I-Dillingham) said Gov. Dunleavy has unveiled a budget proposal that features cuts to essential services and overdraws the earnings of the Permanent Fund.
Edgmon said, "Each individual line of the budget will be vetted by state lawmakers during the upcoming session. Until a thorough legislative review is completed, because the governor did not engage with lawmakers and other stakeholders in advance of releasing his proposal, the exact target of his roughly $300 million in cuts remains unclear."
"However, it is apparent that K-12 public schools and the Department of Health and Social Services – both grappling with the ongoing pandemic – are slated for reductions, even as the governor suggests spending a large portion of the Permanent Fund earnings reserve account," said Edgmon.
“The governor’s proposal calls for spending $3 billion more than what the Alaska Permanent Fund Corporation considers sustainable, and there is no plan for how we will make ends meet beyond next year. However, the inclusion of a general obligation bond package is promising," said Edgmon.
"We hear loud and clear that parents expect the State of Alaska to operate schools at pre-pandemic levels as soon as it is safe, not make it more difficult to re-open because of budget cuts. We are also committed to making the most of our limited resources to help those who need it the most, and we will continue to promote accessible healthcare and preserve critical infrastructure. Finally, we flatly reject the idea of spending down Alaska’s investment fund to avoid tough decisions," said Edgmon. "These are our long-standing values and will be reflected in our effort to create a budget that helps rebuild Alaska.”
A Path Forward: Governor Dunleavy’s FY22 Budget
The FY22 operating, mental health, and capital budget totals $4.3 billion Unrestricted General Funds (UGF), $950 million Designated General Funds (DGF), $948 million Other State Funds, and $4.1 billion Federal Funding. The FY22 budget was developed in cooperation with all state agencies and reflects a total reduction of $294.6 million (UGF), achieved by efficiencies, modernizations, and better delivery of government services. While the proposed budget does not currently reflect allocated cuts, discussions must begin to address underlying cost driving statutes and policies that increase spending year after year.
Key items of interest in Governor Dunleavy’s FY22 budget:
Stabilizing Alaska’s Economy
Governor Dunleavy’s Path Forward includes key legislation as part of a concentrated effort to stabilize Alaska’s economy. In addition to the Operating, Capital, and Mental Health budget, the package includes:
Express Capital Budget – Help to Alaskans Now
Fiscal Certainty for Alaskans
Alaska Department of Transportation & Public Facilities:
DOT&PF’s proposed budget takes into consideration the transportation needs of Alaskans while acknowledging the current fiscal climate.
“The Governor’s budget exercises restraint, yet still supports those core state services and initiatives to Keep Alaska Moving,” stated Commissioner John MacKinnon.
Highlights of the DOT/PF's Budget:
On the Web:
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