Kenai Peninsula Borough Mayor Mike Navarre has been giving Power Point presentations in which he outlines the state’s comprehensive plan to address its roughly $3 billion budget deficit. He then shows his audience a blank screen.
We’re hopeful that the Legislature will have made some concrete progress toward a long-term solution when adjourns sometime after Easter, but we’re also starting to wonder if we’re caught in another “Groundhog Day” session (or Marmot Day, here in Alaska).
In the movie, Bill Murray’s character relives Groundhog Day over and over until her figures out how to get things right.
In the Legislature, the House and Senate appear to be on yet another collision course over how to cover the budget gap. The Senate has sent a plan to the House that would restructure the way in which earnings from the Alaska Permanent Fund are allocated, using a portion to fund state government. Permanent Fund dividends would be capped at $1,000 for the next three years, but should a spending cap be adhered to, the state budget would be balanced in the next six years.
However, the Senate has also proposed deep cuts, including a 5 percent cut to the formula used to provide funding for public schools.
The House’s fiscal plan includes a restructuring of Permanent Fund earnings, though at a lower draw than the Senate plan. Rather than deep cuts, the House plan would make up the difference by reinstating a state income tax — a measure even some members of the House majority are beginning to balk at. The House plan also includes increased taxes on the oil and gas industry.
We’ve been down this road before; last year, the Senate passed a similar plan to use a portion of Permanent Fund earnings, but the measure never made it out of committee in the House.
So we’re wondering, in the next couple of weeks or months or however long lawmakers need to complete this session’s work, will there be room for compromise between the two bodies, or will Mayor Navarre’s Power Point continue to include that blank screen? Will we see at least the beginnings of a solution this year, or will we wake up next session facing the same fiscal gap, no closer to a solution?
Lawmakers need to focus on the proposals they have in common — which happens to be use of Permanent Fund earnings — and then compromise on the other parts of the budget, from additional cuts to new revenue after that’s done. Most lawmakers in Juneau acknowledge that a Permanent Fund earnings plan is the biggest part of the puzzle. But what they’re doing now, adding proposals to a Permanent Fund earnings plan that the other side will find unpalatable and then digging in on an all-or-nothing approach, is only putting Alaska deeper in the hole.
And we’re getting tired of reliving this over and over again.