Few would consider it a holiday tradition, but the Dec. 15 deadline to present a budget is just as predictable as the coming of Christmas or New Year’s Eve.
As required by statute, I introduced my preliminary budget for the next fiscal year as the first step in a process that will require input from a new Legislature and the people of Alaska that we all represent.
This budget looks quite different than the one I signed this past June, but not just because the price of oil has dropped over the past few months.
Wide swings in oil prices are events Alaskans are well accustomed to. In my first term, prices ranged from an unheard-of decline to negative-$3 per barrel to more than $120 per barrel last spring.
As a result of the current and future pricing, our available revenue is down, but the actions we took in this year’s budget have us better positioned to manage our financial situation.
First, we put some of the windfall into savings, which gives us the cushion to handle the proposed deficit of about $265 million while leaving more than $2 billion in the Constitutional Budget Reserve.
Second, we have nearly retired all the oil tax credit debt my administration inherited. Having those liabilities off the books means we don’t have that expense in future fiscal years.
Third, the capital budget of $734 million in the current budget, combined with the billions of federal infrastructure dollars coming to Alaska, will provide plenty of work for our construction and related industries now and in the coming years.
Between paying off our tax credits and other debts, reducing the capital budget from the current year, and continued spending restraint we’ve executed over the past four years, we can cut the next budget by $836 million without impacting the services Alaskans expect or the statutory Permanent Fund Dividend.
My budget proposes a PFD that follows the statutory formula, which could range from $3,800 to $4,000 per Alaskan. I put the people of Alaska first, and there’s no question the 2022 PFD came at the right time for so many who’ve been dealing with 40-year high inflation for the past 18 months.
Regarding the PFD, I have consistently asked the Legislature to follow the existing law, or propose a change to the law that includes the ability for the people of Alaska to weigh in on those changes.
We are here to govern on behalf of the people, not to legislate against their will. There is no fix to this issue without giving the people a voice in any decision.
In addition to fully funding the PFD, the budget also fully funds education, including continued implementation of the READS Act, Pre-K, and an increase to the Base Student Allocation. I recognize that schools around the state are dealing with inflation just as the everyday Alaskan is, and how we address that is a conversation that I’m more than willing to have with legislators.
The budget fully funds the ferry system and the federal match needed to leverage $1 billion in projects for the Department of Transportation and Public Facilities.
Just like every budget I’ve proposed, this budget fully funds Power Cost Equalization and college scholarships, and it increases funding for the WWAMI program to grow our ranks of health care professionals.
We’ll continue to increase resources for Public Safety by funding positions that were only partially funded in past years. Following the graduation of two full Law Enforcement Academies this year, our ranks of State Troopers have grown.
This budget funds these new Troopers, and we’ll hire 30 new support staff to make sure they’re in the field protecting Alaskans and not at the post doing paperwork.
My administration has several other initiatives in this budget that go beyond status quo.
For example, as part of our Healthy Families Initiatives, we are including an increase of $9.5 million to the new Department of Health for expanding postpartum Medicaid coverage, addressing congenital syphilis and tuberculosis, and recruiting and retaining medical professionals.
Again, this budget is just the beginning of the process. The new Legislature will have its role, and I’ll also have the ability to amend my budget proposal on or before the 30th legislative day of the upcoming session.
It may surprise some that we’re able to put forth this budget without an increase in taxes, but we can because we’ve found efficiencies over the past few years and paid down debts. As a result, our agency operating budgets are down 4% from the budget I inherited and we’re able to address Alaskans’ needs.
Few states have been able to accomplish what Alaska has in this regard in the past four years. We have been good stewards of the people’s money for the past four years, and we will continue to be for the next four years.
Along with members of my administration, I look forward to working with all Alaskans to craft a budget that reflects our revenue, protects the PFD, and provides the services Alaskans expect. Together, we also can continue to address our most pressing needs such as public safety, education, and health care while building an Alaska for the next 50 years and beyond.
Alaskans can see all the budget documents at omb.alaska.gov.
Mike Dunleavy is the 12th governor of Alaska.