Reality Check w/ John Tracy: Lawmakers are finding common ground on budget deficit
It’s often difficult to see progress, but it’s worth recognizing it when it happens.
Believe it or not, lawmakers in Juneau are beginning to find some common ground in their efforts to close Alaska’s $3 billion budget gap.
And that’s worth noting.
First and foremost, a restructuring of the Permanent Fund, and making it’s earnings available for state spending is once again a part of Gov. Bill Walker’s plan, and the Senate Majority’s plan, and for the first time, a cornerstone of the House Majority plan.
Each plan sets a slightly different percentage of the earnings that could be used for state spending, but the concepts are generally the same.
Each plan would reserve a portion of the earnings for Permanent Fund dividends. They would initially be in the $1,000 range, but each plan works to retain dividends and give them potential for growth.
Just using earnings in this way would close about two-thirds of the budget gap.
We’d still be about $1 billion in the red, but it would triple the number of years we could stretch our savings.
How we get the other billion in savings is still a dividing point in Juneau.
The House is proposing an income tax that would be offset by the Permanent Fund dividend for many Alaskans, and would raise more than $600 million a year, paid primarily by wealthy Alaskans.
The income tax is supported by the Alaska Federation of Natives, which represents many of Alaska’s lowest income residents.
It is opposed by Alaska’s richest resident, Bob Gillam. No surprise there.
The Senate hasn’t warmed to an income tax. It’s proposing deeper budget cuts than the governor or the House, cuts the House leadership says could send Alaska’s economy into an even steeper tailspin.
But lets not take our eyes off the larger prize. It looks very likely lawmakers will work together to close two-thirds of our gap this year, even if they cannot agree on how to close the last third.
And that, in a word, is progress.
John’s opinions are his own, and not necessarily those of Denali Media or its employees.
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