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Associated Press 

Budget unveiled by Gov. Walker aims to reinvigorate the state's economy

The budget plan also gears resources toward public safety and substance abuse


December 20, 2017

JUNEAU - Alaska Gov. Bill Walker on Friday proposed a budget plan aimed at reinvigorating the state's economy that he hopes will win over legislators following drawn-out sessions marred by political gridlock.

Central to that plan is a payroll tax that would help pay for deferred maintenance and community infrastructure projects. The administration said this would help put Alaskans to work.

Walker proposed a similar tax to help address Alaska's budget deficit that ran into resistance from lawmakers, particularly in the Republican-led Senate, who did not act on the measure during the special session that ended last month.

In drafting the new proposal, the administration listened to concerns that imposing such a tax would grow government or be in place indefinitely, Walker said. The tax, as currently proposed, would end after three years, according to the administration.

The tax would generate about $800 million over that period and additionally help leverage local and federal funds, the administration said.

Walker is also proposing bonds to help pay off oil and gas tax credits earned by smaller producers and explorers.

The budget plan also gears resources toward public safety and substance abuse treatment.

Walker's proposal is just the beginning - a starting point for the House and Senate to work from.

The budget process itself is one that Walker wants to change.

He plans to propose that budgets be addressed biennially and that lawmakers face consequences if they don't pass a budget by the 90th day of a session, such as a loss of their daily allowance and a withholding of their salary past that deadline until a budget is passed. A governor would face similar consequences if he or she did not propose a budget by Dec. 15.

Voters approved a 90-day session limit but the constitution allows for regular sessions of up to 121 days. The Legislature in recent years has flirted with the potential for a government shutdown by passing budgets later than normal.

That's a "terrible way to run a state" and creates chaos, Walker said.

Photo courtesy State of Alaska

Gov. Bill Walker

The administration once again is proposing using earnings from Alaska's oil-wealth fund, the Alaska Permanent Fund, to help pay for government expenses amid a persistent budget deficit.

Despite some bright spots in the latest revenue outlook - including increased oil production on the North Slope - Revenue Commissioner Sheldon Fisher has said some permanent fund earnings for government expenses is prudent and necessary provided any draws are made at a sustainable level.

Lawmakers have generally agreed that some use of permanent fund earnings would be needed to help cover costs. But they've never finalized a plan for doing so, clashing instead over taxes and spending levels. The state has been using savings to get by.


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