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State budget cuts could mean tens of thousands will lose jobs

By Lauren Maxwell 7:16 PM March 8, 2016
ANCHORAGE –

A new study from the University of Alaska Anchorage’s Institute of Social and Economic Research says up to 30,000 Alaskans could lose their jobs depending on how legislators choose to make budget cuts.

The study, which is still in draft form, was commissioned by Gov. Bill Walker’s office to see how different budget balancing strategies would hurt real people.

Chief among the findings is that budget cuts alone would primarily hurt government workers and contractors. An income tax of any sort is likely to affect the rich while a sales tax tends to target medium and low wage earners. The report found that reducing the Permanent Fund dividend would hurt the lowest earning Alaskans the most.

“We do have a budget gap and any one of the options that we’ve laid out has economic implications,” said study co-author Mouhcine Guettabi.

Then there’s the question of jobs. The study found more than 30,000 Alaskans could lose their jobs in the short run if the Legislature tries to bridge the budget gap in a single year. Spending cuts alone would bring the most job loss. A combination of cuts, new taxes and reducing the dividend would mean the fewest jobs lost.

Guettabi said the number of jobs lost represents the upper end, and only if lawmakers try to remove $3 billion from the economy in a single year.

Most economists don’t think lawmakers have plans to balance the budget all at once. Guettabi said the study is meant as a tool for legislators to consider as they make cuts.

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