State Services and a Fiscal Plan
In the absence of a fiscal plan one of the difficulties in creating the budget is that state agencies, along with schools, have basically been flat funded for nearly a decade. In the face of double-digit inflation over the same time period agencies have had to meet their mission with far less spending power. Belt tightening can be good, but squeezing agencies to the point they are unable to deliver the services Alaskans need is unacceptable. Here are some examples from constituents of where the state is falling short and negatively impacting Alaska's economy:
- DMV wait times of over two hours.
- The Department of Fish and Game has limited resources to conduct surveys, sometimes impacting commercial fisheries.
- Ferries that don’t run predictably, or at all.
- Delays in business licensing.
- Supplemental Nutrition Assistance Program (SNAP) benefits that are over six months behind.
The failure of the SNAP program is especially troubling and shows just how fragile our state government is. SNAP benefits are 100% funded by the federal government and the federal government pays for half the cost of operating the program in Alaska. Despite most of the funds coming from the federal government, the state is still unable to get the funds to recipients due to outdated computer equipment and shortages of staff. It is too often the most vulnerable Alaskans bear the cost of the state's failure to deliver.
As Alaskans experience more and more of these “failures to deliver” the conversation about adding revenues continues to grow. The legislature must create a balanced annual budget to provide the services Alaskans need and expect, while also developing a comprehensive fiscal plan that keeps the state solvent for years to come. I joined with some of my colleagues and issued a statement on the importance of advancing a fiscal plan. As Representative Groh recently wrote in an opinion piece, we need to take action on a fiscal plan now. We cannot afford to continue to kick the can down the road. Our savings are virtually exhausted, and we are struggling to provide basic state services, such as SNAP benefits, to the neediest Alaskans.
What is Ahead
The Legislature is scheduled to adjourn by midnight on May 17th. Between now and then I am hopeful the Senate will revise the operating budget and send it to the House for a concurrence vote. I would also like to see the Senate complete their work on the capital budget and send it to the House so that House members can have some input into the capital projects being funded. Of course, there are many inner workings involved in those two budgets: whether the statutory formula for the dividend will be reformed, whether the Legislature will need to draw on the Constitutional Budget Reserve (CBR), whether the increase to education funding will remain one-time funding, etc.
One thing we know for sure is that no matter how the available revenues get sliced and diced there is very little left for the capital budget and state services will largely be flat funded again. Without new revenues or deficit spending our capital budgets will remain small, state agencies will be flat funded and there will be a very limited amount for permanent fund dividends.
For these reasons we need to pass a comprehensive fiscal plan. However, in addition to working on a fiscal plan, we also need to pass a budget by the end of the legislative session. Despite the limited revenue, we do have the ability to pass a balanced budget on time. If the legislature fails to pass a budget by the end of the session, we will send the wrong message to Alaskans. We need to pass a fully funded budget by the end of session so that Alaskans are not left worrying about a government shutdown.