Governor Bill Walker says the Legislature must agree to a complete and sustainable solution to the state’s fiscal problem this year. In a letter to legislators Walker sent Wednesday, he says continuing to draw on reserves without a solid plan to stop doing so is unacceptable.
His own budget plan would draw on reserves over the next two budget years before reaching balance in 2019.The letter received a cool reception from the Republican-led House majority. Representative Charisse Millett says legislators know that Walker can call a special session.
“I think if you take a look at what we’re doing in the House, the letter was probably unnecessary. We are working towards it. We are fully aware. We hear from our constituents every day the impact that the budget is having and the projected price of oil has on our economy. We are fully aware of that, so while I appreciate the governor writing a letter to us, we have an opportunity to talk to the governor. We speak to him quite often,” she says.
Walker says the deeper the state draws on reserves, the less money it will have to draw on in the future. And he points out it would drive down the state’s credit rating. He says this will slow investment and cause the state’s economy to spiral down.
The governor says the state must cut spending, restructure Permanent Fund earnings and dividends, and introduce a broad-based tax. And he says the Permanent Fund changes must be based on rules that produce a stable amount of revenue and protect the fund.
Walker has proposed an income tax, but legislative leaders have resisted that step. Some lawmakers would prefer a statewide sales tax, but Walker didn’t propose one.
Walker says the legislature can accomplish a sustainable budget without having a special session. He left unsaid the possibility that he will call them into session if they don’t meet his requirements.
Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at akitchenman@alaskapublic.org.
