By Cheryl Frasca and Eric Wohlforth
Last fall, we asked Alaskans to “show us the money” using a new website that models the State of Alaska’s fiscal year 2022 budget challenge. Using the current year budget as a baseline and incorporating the then-most current revenue projections, the website started with a projected $1.3 billion dollar deficit. Alaskans were invited to try their hand at filling the gap. A lot has happened since then, but one thing remains the same — the State of Alaska has a structural budget problem that can’t be solved with short-term federal dollars or further delays.
Since last fall, we’ve heard from more than 2,100 Alaskans. Using the Alaska Budget Choices website, they showed us how they would increase or decrease spending; increase or decrease current taxes; add new taxes; modify the draw from Alaska Permanent Fund income; designate a level for the dividend; and create their own unique solution. We’ll share more about the results below but first a few reminders.
It was never our intention to put forward a single budget solution. Our purpose was to engage Alaskans in a process to better understand the challenges and difficult choices ahead.
We reached out to all Alaskans through the news media, social media, email marketing, speaking engagements, and referrals. It was a challenging time with the pandemic, economic worries, and a contentious presidential election all vying for Alaskans’ attention and airtime. We are pleased so many Alaskans took the time to grapple with the challenge of balancing the state budget.
We promised to share the results with elected officials. Last week, we sent extracts from the results to all members of the Alaska State Legislature. Those extracts use zip codes to approximate each legislator’s district.
The results surprised us. We learned a lot about our fellow Alaskans, mostly that the public conversation about the budget hasn’t really reflected the measured steps that most Alaskans would take if they were the decision-makers. Respondents clearly affirmed the need to protect the Alaska Permanent Fund by following a sustainable percent of market value formula (POMV) draw. When it comes to dividends, the vast majority of responses landed on holding the line or suspending the dividend until we can afford it. In terms of spending, for the most part, respondents favored holding the line on more cuts and maintaining current levels of service. On the revenue side, most respondents favor holding the line on corporate and resource taxes. However, opinions were more diverse and varied when it came to use taxes, an income tax, and a statewide sales tax.
We want all Alaskans to see the results as well. The full report can be accessed at: https://bit.ly/2RuhQ2R.
We hope the Alaska Budget Choices project has provided participants with a greater understanding and appreciation for the challenges facing our legislators. We also hope it has prepared participants to more fully engage with their legislators on this most important topic.
As the regular session marches toward a conclusion and the legislature moves into the first of two special sessions, it is imperative for citizens to remain engaged. Stay informed about the budget options under consideration. Reach out to your legislators.
It is not hyperbole to say that the future of our state hinges on the decisions that will be made in Juneau in the coming days.
Cheryl Frasca is a former director of the State Office of Management and Budget, and former director of the Office of Management and Budget, Municipality of Anchorage.
Eric Wohlforth is an attorney, and former Trustee with the Alaska Permanent Fund Corporation. He served as the commissioner of the State Department of Revenue in the early 1970s.
Commonwealth North (CWN) is a nonpartisan public policy forum focused on illuminating Alaska’s most critical issues. The organization’s mission is to educate Alaskans on significant public policy issues and assist in identifying effective solutions. The CWN budget website is www.akbudget.com.
