Governor Bill Walker told a Sitka audience on Friday (4-3-15) that he’s “a little concerned” about the depth of cuts being proposed by state lawmakers.
During a talk before the Chamber of Commerce, he thanked the city assembly for its resolution in support of expanding Medicaid, and told the audience that its time for Alaska to finally start building a natural gas pipeline.
But most of his talk focused on the budget. The state is facing a $3.5-billion deficit, largely because of the decline in oil prices.
“My concern now is that with the stroke of a pen we can end programs that have taken decades to create,” Walker said.
He repeated what has become something of a mantra in Juneau, telling the audience, “we know we cannot cut ourselves into a balanced budget.” He said Alaska could lay off every single state employee, and it still wouldn’t close the projected budget hole.
And he said he’s particularly concerned about proposed cuts to education. “We need to understand where the bottom is,” Walker said.
“We just have to make sure that we don’t end up with a different Alaska, significantly different than we want,” he said. “So I’m very concerned about the depth of those cuts.”
The State Senate proposed — and later Friday night passed — an additional $47-million in cuts to education. Those cuts came as a reduction in the “base student allocation,” which is the formula that decides how much state money school districts get for each student.
That cut came on top of $32-million in cuts proposed by the Governor and passed by the House. Those cuts had eliminated a one-time funding increase passed by the legislature just last year.
Walker said his administration had considered sparing education entirely — but ended up deciding that a 2.5% cut was necessary.
“The concerns that have been expressed to me is that others took that 2.5% [and] are now trying to double or triple it and go on down the road,” he said. “But education is, you know, it’s gotta be the highest priority.”
Sitka resident Jeff Budd asked Walker whether he’d consider tapping the Permanent Fund to help close the budget hole. Alaska currently has nearly $54-billion in the fund. In comparison, the entire state operating budget for the coming year, as passed by the Senate, is about $4-billion.
Walker said that once the legislature gets through this budget, his administration will start looking for revenue sources, and, he said “everything is going to be on the table.”
“We felt, and the legislature certainly agreed, and they’ve done a great job on it, that we need to get our budget a bit in order first, before we start reaching for the revenue levers,” Walker said. “So that’s why we’ve done it in this order. Reduce the budget first, now let’s look at the revenue side.”
Both the House and Senate have now passed operating budgets. Those budgets must now be reconciled in a conference committee, before it is sent to the Governor for his signature.