Opinions

Legislative majority ignores better ways to a budget for Alaska in lean times

Following a 103-day combined regular and special session, I have returned from Juneau. Actually, the special session is ongoing, although the Legislature is transitioning away from the capital city. Much has been written about the failure of the Legislature to complete its most important task, preparing and funding a budget, as well as the circumstances surrounding its "recess" from Juneau.

In the spring of 1990, the 16th Alaska Legislature passed a resolution calling for the creation of something called the Constitutional Budget Reserve. The voters adopted the CBR that year and it has now become integral to our work. The CBR was designed to act as a liquid savings account, accessible to help fund government, in contrast to the Alaska Permanent Fund, an account whose corpus is inaccessible without the express say-so of the Alaska people. Currently, the CBR has a balance of about $10 billion.

I said that the CBR was accessible. It is. However, three-fourths of each legislative chamber must agree to "tap" it. The authors of the CBR clearly wanted future legislatures to reach a broad consensus that the funds should be used for some beneficent purpose. Three-fourths of the state House is 30 members. My caucus, the Independent-Democratic Caucus, has 13 members. Only 26 members voted to tap the CBR, 4 short of the required 30 votes.

"Get on board!"

In the closing days of the regular session, a number of Republicans told me to "Get on board!" This meant, simply, to vote "yes" on the operating budget -- as written -- with no modifications and no discussion, and certainly no bargaining or negotiating. It's unclear why it was believed I and my 12 caucus colleagues would do this on command. No doubt, there were arguments for doing it, including: a faster end to the session and the beginning of summer; a recognition of the budget cuts made by the majority, however contentious or misplaced some were; and, appeasement of the majority, generally.

However, the idea that the majorities' operating budget is the only possible model constitutes a false choice. The budget is a 1,000-piece puzzle, but unlike a real puzzle, there are many ways to put the pieces together. There are infinite methods of writing an operating budget. The budget approved by each of the majorities is but one way.

What's the lay of the fiscal land?

In order to "fix" the deficit spending of fiscal year 2015 (the current fiscal year, which ends June 30), it requires a budget "patch" of about $3.7 billion in general fund dollars. The state projected revenues of $4.5 billion for the year, but only received $2.2 billion. However, at the outset, projected revenues were already about $1.3 billion short of full funding of the FY15 budget. The $3.7 billion deficit for FY15 is being paid for by drawing $2.8 billion from the Statutory Budget Reserve (which drains it) and transferring $1.2 billion out of the Public Education Fund (draining it, too -- goodbye to forward-funding of education!). Topping it off, the majorities' budget authorizes using $480 million of the Higher Education Investment Fund (monies for performance scholarships and education grants).

The budget for fiscal year 2016 must use CBR funds to pay for government operations. Short of using Permanent Fund Earnings, there is no other source of money to fund the government. The coming year's budget calls for spending $5.3 billion of general fund money to operate the government. Revenue projections are only $2.2 billion, leaving about a $3.1 billion hole in the budget. Undoubtedly, the trend lines are awful.

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Viewed differently, the state's total available savings (all sources) is currently about $12 billion. The House and Senate majorities want to spend $3.2 billion of that. The House Independent-Democratic Caucus wants to spend perhaps $3.3 billion of that. Importantly, we propose the extra money would be "paid for" by:

1. Postponing portions of oil and gas tax credits;
2. Re-appropriating UMED road monies;
3. Slowing or defunding mega-projects;
4. Not occupying the hotly disputed Legislative Information Office in Anchorage; and/or
5. Re-appropriating unencumbered Susitna-Watana Dam monies.

Under our approach the Legislature could keep promises to:

  • Fund public education using the Republican majorities' own numbers from 2014, and
  • Abide by our collective bargaining agreements with public employees’ unions, entered into by the Parnell administration.

Finally, with multiple polls showing that the vast majority of Alaskans want the Legislature to accept Medicaid expansion dollars (we have lost, permanently, $194 million in revenue from the federal government!), and with our new governor having campaigned and won office on a platform of accepting expansion dollars, my caucus believes the Legislature needs (at a minimum) to debate expansion on the floor of each chamber. We think the Alaska people are entitled to hear this debate and see, officially, where their legislators stand on this vital issue. GOP legislators claim they need time to study the issue. However, legislation was filed in 2014 (House Bill 290) and 2015 (HB 18), and the governor's original budget included federal receipt authority for Medicaid expansion. Given this record, along with 26 hearings to date, it is difficult for the majorities to argue that they were caught unaware.

Rep. Andy Josephson, D-Anchorage, has served in the state House of Representatives since 2013.

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(at)alaskadispatch.com

Andy Josephson

Rep. Andy Josephson was elected to the Alaska State House of Representatives in 2012 and represents residents in South Midtown, Taku-Campbell and East Sand Lake.

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