Senate Finance co-chairs announce multi-year ‘step-down’ approach to budget cuts

Senate Finance co-chairs announce multi-year ‘step-down’ approach to budget cuts

Budget would be cut incrementally to reduce shock

The two Republican co-chairs of the Senate Finance Committee announced Monday they want to take a multi-year “step-down” approach to cutting the state budget.

The goal of the new approach would be to lessen the “shock” that Gov. Mike Dunleavy’s proposed budget cuts could have on the economy, Bert Stedman of Sitka and Natasha Von Imhof of Anchorage said during a press conference Monday afternoon.

“We’re facing somewhere between 5,000 and 7,000 jobs that would be vaporized from the workforce in Alaska, that’s 2 percent of our workforce,” Stedman said, “and potentially extend our recession for several years.”

Dunleavy’s proposal to cut $1.6 million from the operating budget elicited a severe forecast from an economist last week. The state’s chief economist produced a more optomistic forecast of Dunleavy’s budget’s impact on Alaska, but Senate Finance members were skeptical.

“I’m not interested in putting people out of work and out of their homes,” Stedman said.

Legislators are approaching the halfway point of the 120-day session and Stedman said it’s very difficult to put together a budget proposal when they are still expecting more budget-related legislation from the governor. In the meantime, he will continue to work with other legislators on this step-down approach.

Von Imhof said this step-down approach would be more “pragmatic” than Dunleavy’s one-fell swoop proposal.

“Let’s look at what’s more accomplishable in the short-term and what’s accomplishable in the long-term,” Von Imhof said. She noted that most commissioners are new and it will take them a year to truly understand their department, how to make efficiency improvements and where to make cuts.

Stedman said the “Permanent Fund Dividend could be used as a shock absorber” to infuse the economy with cash as they make cuts this year. The use of savings will also be considered in this step-down plan; Dunleavy has vowed to not use savings this year to fund state government.

“We will continue to put a step-down approach together,” Stedman said

Von Imhof said, “Each one of these cuts has a real person and a real family behind it.”She said they discussed the budget with Dunleavy last week, but it was “general,” not about the step-down plan, and she does not know his thoughts on the matter.

‘Don’t panic’ about Marine Highway

In addition to the new budget approach, Stedman is working with Department of Transportation on a plan to keep the Alaska Marine Highway System running.

He said he’s coordinating with Department of Transportation to develop a couple options for keeping the Alaska Marine Highway System open through Fiscal Year 2020.

“I think the governor’s looking favorably on that. I’m getting very good response from the Marine Highway, DOT and the Marine Highway.”

“He’s listening and I appreciate that,” Stedman said of Dunleavy.

“For the crew, the employees and the employees’ families, I would suggest they just sit tight a little bit longer and not panic,” Stedman said. “Let us work through this process the next couple months, try and smooth things out.”

• Contact reporter Kevin Baird at 523-2258 or Follow him on Twitter at @alaska_kev.

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