Democratic gubernatorial candidate Byron Mallot also caught the irony in Gov. Sean Parnell’s signing of a resolution that calls on the federal government to balance its budget, at a time when state is on the cusp of passing a budget that will put it in unprecedented deficit spending. The resolution was sponsored by Republicans Rep. Wes Keller and Sen. John Coghill. It passed the House 22 to 12, and the Senate 14 to 6.
From Mallott’s statement:
Gov. Parnell appeared unaware of the irony in castigating the federal government while Parnell himself has overseen an unprecedented deterioration in state finances. While the federal budget deficit has gone down more than 50% since 2008, Gov. Parnell has taken Alaska’s state budget into massive deficits. After entering office with a $5 billion annual surplus, Parnell has wrecked the state budget with spending increases, creating a $2 billion annual deficit that is draining Alaska’s savings. Parnell went from a $5.8 billion operating budget to an $8.9 (billion) operating budget last year. This year’s total is still uncertain, but is likely to top $9 billion. According to the Washington Post, Alaska had the worst fiscal performance in America last year, and was one of only two states to lose revenue.
To be fair, the Washington Post piece Mallot is referring to was sloppy in its facts. The article was about the fiscal situation between 2012 and 2013, which it attributed to the oil tax break signed into law in 2013. That law wasn’t even in effect until 2014. In fact, under ACES, the old tax regime, the decline in total unrestricted petroleum revenue went from $8.9 billion to $6.4 billion between fiscal years 2012 and 2013.
It’s hard to say for sure because the budget’s a moving target and so much depends on the price of oil. But it appears that current deficit has as much if not more to do with declining oil production, lower oil prices, and the state’s increased spending than with the tax break.
But regardless of the causes, the point remains that the current budget is a buster and is nowhere near balanced.
Contact Amanda Coyne at firstname.lastname@example.org