What others say: Legislators should resist temptation to shift deficit to cities, boroughs

  • By Fairbanks Daily News-Miner Editorial
  • Thursday, March 9, 2017 4:44pm
  • Opinion

When state revenue is tight, the budget pressure in Juneau can be intense. For the past two years, legislators have scrutinized the state budget closely, attempting to squeeze every dollar possible in potential cuts from the budget before turning to revenue measures. Though this has burned up quite a bit of time and money with less effect than revenue measures would have had at balancing the state’s books, it’s prudent to trim what fat exists before making the blanket assumption that every state dollar spent is a necessary or wise expenditure. But in looking for savings, some legislators have been tempted to lower the deficit not by responsible budgeting but by sleight-of-hand. Though this temptation can be powerful, legislators should resist it.

A certain amount of cost-shifting by the Legislature and governor has already taken place. For instance, in 2015, the Legislature opted to put a five-year halt to school bond debt reimbursement. That move ended a tradition of more than a decade in which the state reimbursed between 60 percent and 70 percent of debt incurred by cities and boroughs for school renovations and repairs. Although the move spurred criticism because of the state’s constitutional mandate to provide education for its residents, the Legislature’s move is defensible, as there is no legal obligation to fund projects passed by municipalities.

Minor budget shenanigans that make the yearly budget deficit look better but don’t fix underlying problems aren’t confined to the Legislature. Gov. Bill Walker, for instance, opted to delay the payment of a portion of state oil tax credits in 2015 and 2016 to avoid drawing down savings too quickly. Although the moves saved the state some immediate budget pain, they also moved costs to future years with no real savings.

There has been talk, however, of cost-shifting on a much larger and more detrimental scale. Proposals have been floated in Juneau to shift substantial cost burdens, such as the benefits and pensions for teachers, to the municipalities where they are employed. Such a move would be a massive cost increase for municipalities, and would exacerbate the difference in the share of education costs borne by incorporated municipalities and those located in the state’s unincorporated area. Local property taxes would require massive increases, further burdening the state’s committed, non-transient residents. What’s more, most if not all municipalities in the state have revenue caps that couldn’t accommodate such immense cost increases, necessitating expensive special elections to allow for their revision. A cost shift of such a magnitude would overburden residents of incorporated municipalities and likely result in local budget chaos. The only positive would be for state legislators themselves, who would claim they had dealt with a large piece of the budget deficit. Technically, this would be true, though they wouldn’t likely be keen to admit they had done so by making their problem someone else’s — namely, municipal governments and their own constituents.

If balancing the budget were easy, it wouldn’t take a group of capable legislators so long to implement a solution. Those legislators should resist the temptation to offload the budget problem on those who are poorer equipped to deal with it.

— Fairbanks Daily News-Miner,

March 5

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