With less than a week remaining to finalize the state budget, legislators have yet to come to an agreement. The state of Alaska is facing more than a $4.1 billion budget gap.
At the city level, what happens if the state legislature is unable to close the budget gap?
"Well, it would mean that there would necessarily be a much heavier reliance on local revenue sources in order to meet local needs," said Lt. Governor Byron Mallott. "There would be very little state assistance for local government service and program support. It would mean reduced state services across the board."
And the list goes on.
But Lt. Governor Byron Mallott is confident state leaders will come together.
"I just can’t believe that our legislature and our public policy leaders and I include us – I include Governor Walker and myself – somehow aren’t able to come together and fix this fiscal circumstance now. Shame on us," he said in a telephone interview with KUCB on April 7.
Even if legislators aren’t committing to a plan, Mallott said Alaskans are ready.
"All across the state we’re hearing, ‘Fix it. Fix it now and we’re willing to pay our fair share.’ The notion of fairness is hugely important," Mallott said.
Under Governor Bill Walker’s The New Sustainable Alaska Plan, Mallott says no segment of the population will be affected unfairly.
The plan calls for reducing the size of government; adjusting oil tax credits; moving oil money into the permanent fund – and away from the state’s annual budget; and re-instating an income tax.
Many Alaskan’s balk at the idea of their PFDs being touched, but the governor says letting the system be could drain the permanent fund in a few years. Which would mean no more dividends.
Never fear, says Mallott. The governor’s plan aims to keep dividend payouts at the historical average – more than one thousand dollars a year.
Other legislators have their own proposals. Take Soldotna representative Kurt Olson. The Republican has proposed a universal 35 percent tax on PFDs.
With the clocks ticking down, Lt. Governor Mallott said this session will be one for the history books.
"We in this session of the legislature are likely determining Alaska’s budgetary and fiscal health for at least 25 years," he said.
Mark your calendars. The session wraps up on April 17th.
