Legislators faced with the monumental task of coming up with a frugal state budget that provides needed services are just at the beginning of the process, but, says Sen. Gary Stevens, R-Kodiak, Alaska Permanent Fund checks will play a big role in what happens.
Stevens, a retired college professor who chairs the Senate Education Committee and the Senate Legislative Council, said Sen. Natasha von Imhof, R-Anchorage, summed up the situation in recent comments during a Senate Finance Committee hearing, when she said, “That’s the budget you get when you get a $3,000 dividend.”
Gov. Mike Dunleavy “ran on a policy of a high dividend and cutting services and no additional revenue,” Stevens said, in an interview with The Cordova Times. “It just doesn’t add up. You can’t do it.”
Dunleavy’s proposed budget would cut at least $1.6 billion in state spending, cuts he said are needed to balance the budget. Dunleavy’s budget would take for the state property taxes on oil and gas infrastructure that are normally collected by municipalities for their own use, as well as municipalities’ share of fisheries business and landing taxes.
The loss to municipalities of fisheries taxes alone would add up to $1.74 million for Kodiak, $1.429 million for Cordova, and $4.8 million for Dutch Harbor.
Legislators are already questioning how effective those cuts would be.
Working to produce a workable state budget is a long, long process, Stevens said.
“Senate Finance has this right now,” he said. “Once Finance is through with it, it goes to the subcommittees. It will take another week or so with Finance and then to the subcommittees.”
Prospects of legislators passing a state income tax to boost the state’s income are slim. Stevens noted that last year the house did approve an income tax, but the Senate did not, and Dunleavy has said he would veto an income tax.
“The only area we have to deal with is the Permanent Fund Dividend, and it might be less (than Dunleavy promised),” he said.
Stevens expressed particular concern with how proposed cuts to education will adversely impact public K-12 and university programs in Alaska.
“I’m concerned that the state board of education has not weighed in on this budget,” he said. “That is their responsibility. We need to hear from them. They need to let us know what’s going on.”
The future of the Alaska Marine Highway System is also at stake.
The way the budget reads, AMHS would close down in early November and would not run. They would attempt to privatize it and sell it off, he said.
“I don’t know if Anchorage understands the impact (of closing down AMHS) on Anchorage,” Stevens said.
The ferry system has a big economic role in the lives of residents of Homer, Kodiak and Cordova, he said.
