Opinions

Rep. Neuman: House hears Alaskans who say cut budget before any talk of taxes

We heard Alaskans loud and clear while debating the state operating budget for fiscal year 2017, which recently passed the House. You asked us to cut spending first, before even thinking about instituting any taxes or changes to the Permanent Fund.

The budget that passed the House shrinks day-to-day state government by 10 percent. This comes on the heels of an FY16 reduction of 10 percent, for a total reduction of 20 percent in day-to-day government over the last two years.

That's a good thing, as we continue to pare back government programs and make the remaining government services as efficient as possible.

Some people seemed surprised about how we funded parts of the budget, and the fact that money was left over from FY15 appropriations.

It's important for the public to understand that Governor Walker's budget director, Pat Pitney, briefed legislators on the governor's amended and supplemental budgets earlier this session. That's when the Finance Committee was made aware of $288 million of previously appropriated general funds that weren't spent in FY15, due to a smaller than anticipated deficit. Complicating the matter were problems with the state's new accounting software, IRIS, which led to the Comprehensive Annual Financial Report (CAFR) being released later than normal.

Instead of letting the $288 million lapse into the Constitutional Budget Reserve (CBR) Fund, we re-allocated it to help pay down the costs of this year's budget. If we let the funds lapse into the CBR, it would require a three-quarters super-majority vote to get the funds back out of the CBR. That super-majority vote to access the CBR typically comes with a price, as Minority legislators demand more overall spending to use CBR money to balance the budget.

I didn't think it prudent to highlight an additional $288 million available for state spending, while at the same time working to further reduce state government. That just didn't make sense.

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Through these actions, which ultimately were approved by the House, the fiscal gap will be smaller because of our budget reductions and by using some of the leftover FY15 funds. The smaller the fiscal gap, the less we have to take out of the CBR or ultimately the pockets of Alaskans. That's smart budgeting and good government.

One of my goals in reducing the size of government was to get our state operating budget under the $4.5 billion level recommended by a number of analysts, including the Institute of Social and Economic Scott Goldsmith and Commonwealth North.

The House's budget proposal actually accomplishes that, as this year's unrestricted general fund operating budget spending plan calls for $4.1 billion.

We've got more work to do, as the operating budget is only part of the picture when it comes to overall state government and spending.

Several statute changes that can further reduce our fiscal gap include Medicaid reform, public employee and teacher retirement changes, and oil tax credit reform, to name a few.

As we reduce the cost of government, we must also reduce the scope of government. That is why I have been encouraging the governor and all departments to reduce the amount of regulations on the books, which will reduce the workload of state employees and reduce the regulatory burden on Alaskans.

The Senate passed a version of the budget that is similar to ours, with some structure changes and additions. Next we'll go to a conference committee to work out the differences and by the end of the legislative session we'll end up delivering on the will of Alaskans who told us to reduce the budget and protect our state's economy.

I will continue to do all I can to reduce and reform government, and to use every available funding source, before going to the public with any of the governor's proposed taxes or revenue-generating options.

Editors' note: Due to an error by the House Majority Press Office, the version of this commentary first published was the wrong draft. The version above is the correct one.

Rep. Mark Neuman, a Republican representing the Susitna Valley, is House Finance Committee co-chair.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

Mark Neuman

Rep. Mark Neuman, R-Wasilla, has served in the state House of Representatives since 2005.

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