This year’s legislative session will be remembered for several reasons, even though it’s not over yet.
It will be the first time lawmakers played politics with the amount of the Permanent Fund dividend. Yes, over the past two years, first the Governor, and then the Legislature, cut the dividend in half in a nod toward fiscal responsibility.
But, this is an election year, and even though our financial hole remains deep, the Governor and lawmakers made the political decision to throw more money at constituents.
The question is whether lawmakers will adopt a formula to determine the dividend in the future, or if it will become a political bargaining chip as it did this year.
This is also the first year lawmakers will use the Permanent Fund itself to pay for state services. They have to because they’ve nearly drained every other savings account.
Use of the Fund’s earnings reserve was inevitable, but let’s not buy the idea that this was in any way a plan.
What happens in Juneau, for the most part, is the product of not having a plan.
From now on, Permanent Fund earnings will have to generate money to pay Alaskans directly, as well as the services on which they depend.
I know that more than a few Alaskans believe the intent of the Permanent Fund is simply to spin off dividends, but that’s just not true and it has never been.
This is also the year we can stop talking about balancing the budget through cuts. This year, both the House and Senate are proposing larger operating budgets than last year.
Even if you take away the $500 bump in this year’s dividend, this year’s spending plan is bigger.
To be certain, the Governor and Legislature have done significant cutting in the past three years, reducing general spending by about $1.5 billion, and this session, lawmakers
continued to trim around the edges of agency budgets but added money back to areas such as the court system and the University.
Being an election year, many of these same lawmakers will try to convince voters we still have a bloated state budget, but their actions speak louder than their rhetoric.
The only way to cut our way to a balanced budget moving forward is to eliminate entire programs, like the University System or Pioneer Homes. And that’s not going to happen.
At some point, reasonable voices on both sides of the aisle have acknowledged that we will reach a point where deeper cuts do more harm than good. And judging by their actions, perhaps this is that year.
John's opinions are his own and may not necessarily reflect those of Denali Media or its employees.
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