With Gov. Mike Dunleavy’s budget expected sometime between now and Sunday, Alaska Common Ground is hosting a budget forum tonight to discuss Alaska’s financial situation and the path ahead.
The discussion will feature Sen. Natasha von Imhof, the Republican co-chair of the Senate Finance Committee, as well as Anchorage Mayor Ethan Berkowitz, CIRI government relations vice president Greg Razo, Larry Persily and Institute of Social and Economic Research economist Mouchine Guettabi.
Cliff Groh, the former chair of the group who now serves as a board member, said the goal behind the event is to get people thinking about the reality of Alaska’s financial situation and the potential solutions to address it. He said he feels many people still don’t either understand the scale of the problem or are holding out hope that another big oil discovery will solve it all.
“It’s still not widely understood. Our fiscal system has changed dramatically,” he said, explaining the passage of Senate Bill 26 in 2018 that allows earnings from the permanent fund to cover government spending, “but people haven’t realized how much.”
People need to understand the limits of what the permanent fund can do, he said. A recent report by the Alaska Permanent Fund Corporation’s board warned, essentially, that the fund can’t be all things to all people by paying out a full dividend and fully covering government expenses.
Alaska’s financial outlook is challenged according to the latest revenue forecast produced by the state, which expects both a decline in price and production for oil over the next few years. Its immediate expected impact will be to grow the state’s deficit from $300 million to $500 million.
That also comes on top of recent forecasts that supplemental spending to cover holes in the current budget is expected to be historically high thanks to a particularly hot fire season as well as the fact that Medicaid cuts made by Dunleavy and the Legislature were, as expected, unrealistic.
Groh said Alaskans need to seriously weigh the options to address the state’s finances like new revenue, cuts and the dividend. He said it’ll likely take a combination of all those options, but the goal is to bring some stability and certainty back to Alaska.
“The great land is in the big squeeze,” Groh said.
Groh said additional events are on the horizon for the group, including another budget forum planned for February 11.