Analysis of the Governor's Budget Proposal

Dear Neighbor,

The Governor recently released his budget proposal, which would begin draining the Permanent Fund and require massive operating budget cuts. Let's dig in to understand this proposal:

Draining the Permanent Fund:

The biggest problem with the proposed budget is that it begins draining the Permanent Fund. Since Alaska relies on the Fund's earnings to pay for the vast majority of operating expenses, this proposal would lock us into deep and ever-worsening budget deficits. To be exact, the Dunleavy budget drains $3 billion beyond the sustainable draw established in Alaska's POMV framework. For each $1 billion that is overspent, the state adds $50 million to its operating budget next year, and $50 million with compounded interest in each year after that. So just next year, the deficit would be $150 million greater. To put that in context, closing an additional $150 million hole would require closing all Pioneer Homes and shutting down the entire Marine Highway system. And oh by the way if you care about PFDs, draining the Permanent Fund's principal locks us into lower, lower, and ultimately non-existent PFDs. For me, draining the Permanent Fund is a non-starter. I will only vote for a budget that protects the Permanent Fund and our POMV statute.

Massive Cuts:

The Governor proposes $300 million in cuts but didn't have the courage to say how he'd achieve such massive reductions. Frankly, now that state spending is at its lowest levels since the 1970s, there is no way to cut this much from the budget without profoundly damaging proposals like shutting down UAA and all community campuses. Speaker Edgmon noted that $300 million in cuts would devastate our public health system and public schools.

Covid Crisis:

Alaska is now in the worst 10 states for Covid transmission, and among the 13 states left that haven't instituted a mask mandate. Public health experts, economists, and legislators have urged the Governor for months to crack down on Covid transmission to protect human life and our local businesses. But Dunleavy does not have the courage to alienate the tiny percentage of Alaskans who are covid deniers and anti-maskers. Thus, here we are with schools and businesses shut down, and many families unable to work reliably due to childcare hurdles. Compare Alaska's incompetence to Vermont or other states that did institute smart public health measures, saving lives and investments of small business owners.

Helping Downtown Businesses:

Senator Begich and I are leading an effort supported by nearly every Anchorage legislator to re-establish direct flights from Tokyo to Anchorage. This would help for our city's businesses that rely on tourism by tapping into the vast Asian market. We're also working with local government officials and parks staff to improve pedestrian safety and expand our trail network, which also help make Anchorage an attractive destination and the kind of place people where people want to live and invest. Let me know if you want more detail on these local economic development projects.

Seasons Greetings:

Happy Holidays from the Office of Representative Zack Fields, serving Downtown, Eastridge, Fairview, Government Hill, and South Addition. We wish you a happy holiday season and joyful New Year. As always, our phone lines and email inboxes are open to you, all year long.

See you around the neighborhood,

Zack