JUNEAU — In a recent radio interview, Alaska Gov. Mike Dunleavy said he will not approve new taxes without a statewide vote on one of his proposed constitutional amendments.
Barring sharp increases in the price of oil, the elimination of the Permanent Fund dividend or unprecedented cuts to state services, Dunleavy’s position means at least two more years of deficit spending by the state.
“I am not going to support new revenues. I’m not going to support the taking of money from Alaskans unless they have an opportunity to vote on their constitutional amendment,” Dunleavy said during a talk-radio interview Thursday.
“If no tax changes are implemented prior to the constitutional amendment, then yes, a deficit will continue for a few years,” said Corey Allen Young, a spokesman for the governor.
“We do know and acknowledge that the timing of implementing the significant structural change required will take time,” Young said. “There is no way to eliminate the deficit entirely in a single year.”
On Tuesday, the Alaska Senate’s State Affairs Committee approved three constitutional amendments proposed by the governor, but committee chairman Mike Shower, R-Wasilla, said all three have a long road ahead. To become effective, each must be considered by multiple committees in the House and Senate and must receive supermajority votes in both halves of the Legislature before facing a ratification vote at the state’s next general election.
Dunleavy’s statement on Thursday was at odds with a 10-year fiscal plan published late last year by the governor’s own Office of Management and Budget. That plan calls for $1.2 billion from “other revenue sources” to balance the budget starting next year.
With Alaska’s available savings accounts almost entirely exhausted, the state’s deficits may be covered with additional money from the Alaska Permanent Fund. Its earnings already account for over 70% of the state’s annual revenue.
Increasing the take from the Permanent Fund will reduce the amount of money available for services and dividends in the future, and Alaska Permanent Fund Corp. director Angela Rodell told the House Finance Committee on Tuesday that the corporation does not recommend exceeding a sustainable spending limit passed in 2018.
Three floors below that meeting, the Senate State Affairs Committee heard public testimony on the governor’s constitutional amendments and advanced them without making changes.
• The first amendment would require a statewide vote before any tax increases become law.
• The second would tighten the state’s existing spending cap.
• The third would alter the traditional formula for paying the Permanent Fund dividend and enshrine the dividend in the Constitution.
This year, the traditional formula would result in a payout of about $3,170 per person. The new formula would pay about $2,380, based on 630,000 applicants and the next scheduled transfer from the Permanent Fund.
Shower said amendments are possible in the Senate Judiciary Committee, the next panel scheduled to examine the ideas.
Two years ago, when Dunleavy proposed similar amendments, Shower’s committee received a tsunami of public testimony. This time around, there were fewer than 10 callers for each proposal, despite advertisements by the governor and legislators on the committee.
“I think with everything else going on, it kind of got lost in the shuffle,” Shower said during a break in the committee process.
”Seven people thought it was important to testify — it’s crazy,” said Sen. Scott Kawasaki, D-Fairbanks and the minority member of the committee.