If we want to see long-term fiscal success, we must create stability in our budgets. We cannot afford for our fiscal health to be solely tied to the inevitable ups and downs of the price of oil. Today, 30% of our current budget is supported by revenue from oil & gas with the remaining support coming from permanent fund earnings, fees, taxes, and other income.
I believe there are four common sense steps that would help stabilize our budget
- Pass my “Invest in Alaska” Program: my plan calls for constitutionally protecting a sustainable PFD between $1600 and $1800, inflation-proofing the fund, and guaranteeing long-term funding certainty for pre-K-12 education. This would free up as much as $1.6 billion (based on the current budget) in general fund spending each year.
- Reform Delivery of Government Services: There are innovative and creative solutions we could use to modernize government and make it more efficient – ultimately saving money. We need to restructure departments, eliminate wasteful paperwork, and focus on direct service delivery. This is not about cutting budgets, but rather maximizing the use of the available resources to deliver the best possible results.
- Move From One-Year Budget Process to Two-Year: Moving to a two-year budgeting process will help create fiscal stability and certainty. This would also free up government resources that are currently constantly focused on planning the next budget and instead allow resources to be focused on working the current budget to get the best value.
- Move Away From Paying Cash for Capital Budgets: There is no reason that the government cannot function like prudent businesses, local governments, and families. This would mean using debt financing – through general obligation bonds – to provide a stable, structured approach for developing and investing in our infrastructure across the state.
I believe the above approach would not only create a sound budgeting process, but also create the long-term stability our state needs. After employing all these options then I believe we may have to review the revenues we currently produce and consider revamping or adding new revenues. This should only be considered after we have taken the necessary and responsible steps to improve and reform our current process.