Gov. Mike Dunleavy released a 10-year fiscal plan Thursday, assessing other models of state funding.

In it, he discards all three alternatives to his austerity budget.

Dunleavy's proposal features widespread cuts to public education, Medicaid and the University of Alaska, while adding three constitutional amendments and a Permanent Fund dividend conforming to the statutory formula.

Thursday's overview comes four days before Dunleavy begins touting his proposal to various groups throughout in Anchorage, Fairbanks, Kenai, Wasilla and Nome.

The report provides four approaches, including Dunleavy’s evolving plan, to closing a $1.6 billion budget gap:

  • Dunleavy’s current budget proposal, which also calls for repealing certain local taxes and shifting those funds back to the state treasury. The governor wants to change the constitution that would include a spending cap for state government, a bill that was also heard Thursday.
  • Use the Permanent Fund’s earnings to help fund government services, thereby reducing the dividend payments from the statutory formula. The report says it “inevitably leads to the demise of the PFD program.”
  • Use the remaining savings while maintaining existing spending levels, which the report says “eventually fails, absent a dramatic rise in oil prices.” Dunleavy has called this approach a way to “kick the can down the road.”
  • Initiate a statewide tax while maintaining spending levels and issuing a full PFD. The report also noted that Ohio-based conservative think tank Buckeye Institute’s Economic Research Center has prepared a soon-to-be-released report on the prospective impact of a tax.

The report didn’t say whether the broad-based tax would be a sales or income tax, however, it did address the prospects of implementing a tax.

“The impacts of taxation on the economy would be much worse than it first appears and more detrimental than spending reduction,” the report read.

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