Alaska House Passes the FY19 Operating Budget

by Representative Tiffany Zulkosky

On Monday, April 2, 2018, the Alaska House of Representatives passed House Bill 286, the FY19 Operating Budget for the State of Alaska. I voted for the budget and would like to explain some of the difficult decisions the House made to get us to this point.

I firmly believe we have found the best available compromise that allows us to move forward with the State’s work. To be candid, this is not the easiest time to serve in the Alaska Legislature. The State is faced with a very real, multi-billion dollar budget deficit.

For 35 years, oil revenue paid for 85% of our budget and Alaska communities received roads, airports, new schools, education, health, and public safety while paying pennies on the dollar. Today, declines in oil price and production has caused an 80% drop in our revenue from its peak a decade ago. Now, Alaska has 20-30% of our former revenues to fund state government during a recession, which has increased state-assistance needs for more Alaskans.

Funding programs and services like education, healthcare, and public safety are essential to supporting economic growth that will diversify and propel Alaska’s economy into the future. Smart investments ensure our economy is ready for innovation and business development that will make Alaska’s revenue sources sustainable. But these investments require money and it has been a long time since Alaskans felt the weight of these costs.

We lack diversity in our State’s revenue streams and the House’s efforts to implement a comprehensive fiscal plan have been flatly rejected. Instead, policymakers have cut the budget by 40% and some lawmakers continue to make vague promises of balancing the budget through further cuts to the Permanent Fund Dividend and state programs. Such cuts take money from those who can least afford it and would cripple programs crucial to the health and welfare of our rural communities.

Because of the inability to diversify Alaska’s revenue, the House was presented with a very difficult decision. Reduce dividends to fill the deficit, cut programs essential our communities, or spend from the Permanent Fund – harming the fund’s ability to pay dividends or programs in the future. None are good options.

Health and social service programs protect Alaska families, providing resources crucial to helping Alaskans remain in the workforce or get back to work. A healthy school environment inspires Alaska youth to greatness and is key to the health of our communities. Public safety has been a significant concern in rural Alaska for and is vital to the safety and prosperity of our communities.

I, along with many of my colleagues in the House Majority, believe fully funding the dividend is the right thing to do. Our state has paid for decades of education, infrastructure, and services thanks to resources extracted in rural Alaska. The Permanent Fund represents a small part of the value of those resources that were set aside and belonging directly to the people.

In District 38, we understand the annual dividend is not a luxury, but a necessity. Dividends allow individuals and families to heat their homes, get the resources they need to participate in subsistence activities, and to put food on the table.

As a new Representative, I am better understanding the difference between good politics and good policy. Fully funding the dividend is not only the right thing to do, it is also good politics.

But the money to pay the dividends must come from somewhere. Overspending from the Permanent Fund reduces and threatens the very existence of future dividends. And cutting essential state services to fully fund the dividend would push a tremendous burden onto vulnerable Alaskans and communities that do not have the resources to bear that loss.

Although it was one of the hardest votes I’ve taken in my time here, I had to choose good policy and the future of Alaska’s economy. So, I voted for an increase to the dividend at a level less than the full statutory formula. This compromise allowed us to pass a budget, protect essential services in our communities, and defend the long-term sustainability of the Permanent Fund.

Moving forward, it is my hope the Legislature comes to grips with our need to pay for state government. The solvency of our State budget, our ability to meet our constitutional obligations to all Alaskans, and the future of Permanent Fund Dividends all depend on it.

Representative Tiffany Zulkosky serves District 38 in the Alaska State Legislature.

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