Alaska’s legislative leaders in both the House and the Senate sent a letter to Gov. Bill Walker on Dec. 24, urging him to take immediate action in cutting the budget, including calling for a travel and hiring freeze. That letter was released to the public today.
Walker responded with his own letter to legislators, thanking them for their recommendations. Walker said that his administration had already been considering many of their suggestions, and that he wouldn’t call for the implementation of his own until after Jan. 1. Read his letter here.
Walker also sent out a release today, announcing that he was asking his commissioners to identify potential cuts in their departments by January 10 and to “look at the potential effects of a 5-percent and 8-percent cut.”
He will also send out a survey where state employees can weigh in anonymously to identify government inefficiencies. (Note to state workers: This blog is a good place to do so also.)
The public is invited to weigh in here. Those who offer the top five suggestions will be invited to a private lunch with Walker and Lt. Gov. Byron Mallott.
Here’s that press release in full:
Governor Bill Walker sent letters today to all commissioners asking them to identify potential cuts in their departments by January 10.
“With holiday celebrations winding down and oil prices dipping, it’s time we all roll up our sleeves and get to work on reducing costs,” Governor Walker said. “I have asked our commissioners to take a careful look at their departments to see where we can redesign or perhaps combine some services.”
Governor Walker asked each department to look at the potential effects of a 5-percent and 8-percent cut from the previous administration’s FY2016 Work-in-Progress budget released on December 15.
Governor Walker asked commissioners, in assessing places to cut, to also look for ways to maintain regional strength, partner with local governments and non-profit organizations and to evaluate whether the state should continue programs not legally required.
Governor Walker also asked state employees to weigh in anonymously through a survey to identify inefficiencies. That survey will be sent separately.
The public is invited to weigh in, as well. Governor Walker provided a survey website through which Alaskans can voice their ideas for cutting the budget: http://gov.alaska.gov/Walker/press-room/budget-survey.html
Those with the top five suggestions will have the opportunity to have a private lunch with Governor Walker and Lieutenant Governor Byron Mallott.
“This is a challenging task, but I’m confident that with teamwork and creative thinking, we can streamline state services and cut spending,” Governor Walker said. “I look forward to seeing the suggestions.”
Childish legislature? OK. But those like Gov. Walker and AG Richards have stood up to their nonsense and clearly articulated the best alternatives.
I recall Walker telling them many times not to waste time and money on a bullet line. I recall Walker telling them to not waste time and money on a gas line to the Lower 48.
Gov. Walker was 100% correct.
I recall AG Richards telling them- along with Robin Brena- that the spin that the oil pipeline was going to shut down was pure nonsense. After Brena and Richards made the economic case that such a preposterous assertion made no economic sense, Parnell and his lackies in the Legislature had to change their tune.
There ARE good guys in this fight. Unfortunately most of them are not Republicans.
You should be angry at them.
It was a waste of your own precious time to respond to me, “Forecast.” And I’ve met Craig Richards. I’ve also seen him at work, up close and personal, sitting from the benches of Senate Finance while watching him and the new Governor pick childish fights with a childish Legislature. I do not approve.
Waste.
of.
time.
You assume that “Republican” means I lock-step with the party here in Alaska. Yeah, the party is pretty corrupt. You’re right. Can you point out something I don’t know and stop making assumptions? If not, please go back to sipping that Kool-Aid.
Huh up $250 you say?
Damn that sounds familiar…..
My monthly premium for the State’s Aetna health plan is up $250/month beginning January 1. What’s up with that?
Forecast,
Read the fall revenue forecast that was just released – TAPS production is expected to increase and we will continue to see a large uptick in capital spending. And according to the Dept of labor, oil and gas employment is white hot. You can thank SB 21 for helping to attract the capital and companies to make this happen.
Regarding state revenue, it is insane to blame SB 21 for low oil prices and low throughput – which are the only reasons why we have a huge deficit. No tax reasonable system could compensate for these two variables, which drive state revenue. And to think that several hundred thousand more barrels per day from Alaska is going to have a material impact on oil prices is just silly.
All Alaskans do deserve blame for being entirely dependent on one volatile commodity for virtually all of its revenue.
Oil prices have crashed because of soft demand and more production. Once demand picks up, prices will rise. The big unknown is how long will it take for the world economy to start growing.
“Angry Alaska Republican”,
Well, maybe you should consider quitting the most inept, most corrupt party that Alaska has ever seen, and tone down your rhetoric. Insulting the Attorney General and those working to fix the mess created by Republicans is not only inaccurate, but a waste of time. AG Richards is one of the brightest, most mature people you’d ever meet. His work in the private sector has already saved Alaskans billions.
Jon,
The basic facts no not support your assertions.
1. The deficit this year is $3.5 billion. At this rate the state is headed for disaster- in as little as three years. Our savings- that fund these deficits- will be gone.
2. SB-21 was passed by Republicans who did not understand what they were voting for, and ignored all ideas brought forward by Democrats. That is the record.
3. SB-21 allows- at current oil prices- about $12 billion dollars worth of oil to be taken from Alaska and Alaska gets less than $1 billion in severance revenue. This is bankrupting Alaska. It is unconstitutional. And it is the fault of the current legislature.
4. The TAPS throughput is NOT going to increase. Did you not pay any attention to the testimony- under oath- where Exxon and Conoco said it would not?
5. Are you paying any attention to why world oil prices are falling? Hint- its is about supply and demand. Right now there is more supply than demand. Increased TAPS throughput would only help depress prices. Why would producers do that? Increased TAPS throughput was the ONLY argument made as a reason to pass SB-21.
6. Republicans passed SB-21. The failure of this legislation is their fault.
Forecast – you aren’t answering the question. Did anyone suggest that we needed to eliminate credit and raise rates when prices fell below $70?
Moreover, if you won and repealed SB 21, the state would be in a world of hurt right now. Multiple billion dollar projects would have been canceled and we would be bringing in less revenue at today’s prices. You can talk about better tax systems, but no legislator that I am aware of offered a tax plan that would have brought in more revenue at today’s prices.
SB 21 is the only reason why the economy hasn’t crashed — what you fail to comprehend is the repeal would have destroyed the economy and bankrupted the state.
Low oil prices and low throughput are bankrupting the state. The question is how do we attract more investment and companies to develop oil so we continue to have some revenue. By this metric, SB 21 is a success. If oil prices rebound, we will be in good shape. If not, it doesn’t matter what tax system we have in place.
This discussion is why people hate politics.
Everyone pretends they are sooooooo smart, then fights with the people who don’t kiss their feet.
That’s all this is. This isn’t about good policymaking or doing what’s right for Alaska. Bill Walker, Byron Mallott, and their administration and all employed and willingly associating with them are all as tool-ish, drooly, and unoriginal as Parnell’s administration.
Alaska Republicans need to sit down and shut the hell up. “We” lost. “We” lost because a couple of idiots like Thomas Katkus and McHugh Pierre put the interests of some dreamed-up “sense of honor” before the lives of Alaskans, and sh*t runs uphill in government, you know. (And when your lame opponent stumbles over the finish line juuuuust barely… that’s on you and your awful campaign staff, bro.)
And to the Walker administration: you’re using the incentive of a private lunch with Walker/Mallott as a “prize” for “best” suggestions? What’s the second prize? Can we get a pizza party every Friday until summer comes? Do you guys know how insanely narcissistic you guys sound? And have been every step of the way? From your picks (a washed-up spokeswoman, an inexperienced and immature AG pick, and an angry and vengeful chief of staff, to start with) to your response to the legislature, to this? No matter how childish the Legislature may or may not be acting, it’s your job to rise above, and you’ve failed to do so. No wonder you couldn’t retain your old campaign staff. You just want people to kiss your very misguided, easily bruised egos instead of give you real talk.
As for budget recommendations, I just have a question. Is Walker prepared to slash the operating budget? That’s where it’s going to get ugly. You can cheer over slashes in the capital budget, but that’s meaningless at the end of the day. You’re going to have to fight with your Union buddies, Walker administration, in order to cut the budget in the way you want me to believe I think you will.
Oh, I do have a recommendation. Slash all state salaries by 10%. Don’t pick on just Dan Fauske, either. I’m pretty sure you won’t be able to get away with that. Your people who you’ve owed favors to need money, you know.
And you Republicans sitting in the back, trying to sound the alarm and get everyone mad, when it’s just you indulging your ego by talking to media? Just sit down and be quiet. Alaskans will catch on, and it’s more satisfying to say “I told you so” than it is to whine and screech during the entire awful car ride. (I’m on this ride, too, and if you annoy me enough, I will reach over and smack you. I mean, not vote for you in 2016.)
Here, how’s that?
Jon,
You are missing the big picture. You also appear to not understand how SB-21 works (or in this case, does not work).
You are trying to blame those who simply do not have the majority in either the House or the Senate for the fiasco that has been created.
Those in the majority refused to even have a serious discussion about ways SB-21 could have been improved. Almost every amendment offered by Democrats was rejected on near party line votes.
So the Republican majority OWNS this disaster.
SB-21 could have been written in ways to ensure we would NOT have a deficit at current oil prices. It could have been written so the credits in the legislation would not ensure a negative net present value on oil from wells drilled from 2003 onward.
Capex and jobs vastly increased under ACES- far more so than under SB-21. (Note the massive BP layoffs after the referendum vote). However, this is not an argument to return to ACES. Note, too, that Conoco and Exxon have testified under oath that production will NOT increase.
So what does SB-21 accomplish? It is bankrupting Alaska. The Alaska economy will crash and burn under this debacle. Alaskans will lose their savings, their dividend, and pay all sorts of new taxes to make up the vast loses SB-21 has created.
You defend the indefensible.
100 plasma-gasifiers can make much more $$$ for Alaska than 100 new drilling rigs.
Forecast – who offered a competing bill to SB 21 that would have brought in more revenue at today’s prices? The democrat’s wanted MORE credits and higher tax rates at higher prices but I don’t recall anyone saying that we needed to raise rates at lower prices or needed to have a higher gross rate. The simple fact is that if your side won and repealed SB 21 we would be seeing a lot less revenue because ACES would have been reinstated AND the billions flowing into the state to keep the economy moving would have dried up – repeal of SB 21 would have meant very little revenue and it would have killed projects. Conoco and BP would have cancelled their capital projects and the independents would have lost their funding. It would have been a total disaster. At least with Sb 21 we are seeing new companies and billions in private sector funding coming to the state. In addition to the legacy producers bringing in new rigs and spending billions more, Caelus, Hilcorp, Brooks Range, Repsol, NordAq, Great Bear, and Miller are all spending a ton this year on exploration and development.
The Republicans have been in control of the Legislature for 22 years. They have been control of the Governor’s office for 12. To say the are not to blame for not forward funding budgets or for not putting more away for a rainy day is disingenuous.
We had high oil prices for years. They should have used restraint and socked some of it away.
Their plan now is to tax us and use the PFD. They will then try to blame Governor Walker for the mess.
Hopefully Alaskans don’t fall for this.
Although a few have tried- not one of you has listed enough cuts that would save- on a good day- more than a few hundred million. We’d still have a $3.2 billion dollar deficit. And we’d still crash in about three years when all the savings have been burned though.
We need to stop giving away our oil, which is exactly what is happening under SB-21.
Or we could impose a income tax, a sales tax, and eliminate the Permanent Fund Dividend. Those three, together, might raise around $2.5 to $3 billion. The problem with that? The economy would take a major hit, and we’d still end up in a recession.
Or we could stop giving away billions of dollars of our oil per year.
Inaugural balls are not paid for with any public money. Zero. They are funded by political donations. They have zero to go with our budget crisis.
So the new administration is serious about budget cuts, but announces 7 statewide inaugural balls? Really?
Abstract discussions are nice, and reading the same post from Willis 15 times a week never gets tiresome, but we need specifics. Here is a shot:
– Dnr’s Rs2477 is a good program that tries to get access to federal lands, but it is not essential and can be cut
– Close state parks that don’t get much use
– force local governments to contribute to capital projects
– cut back on the Office of Administrative Hearings – most administrative appeals should be heard by the agency making the initial decision
– cut the court system’s outreach / education program (great program but it is not essential)
– have local governments prosecute misdeamnors
– reduce ferry services
– combine all public sector workers’ health insurance into one pool
– reduce benefits provided to public sector employees
– pension reform
– eliminate the 20 percent capital credit for Cook Inlet oil and gas expenditures
– stop throwing hundreds of thousands of dollars at groups like REI – the private sector shouldnt expect AIDEA to cover its costs
– connect villages and consolidate services – e.g. Instead of three schools, airports, clinics, utility providers, where feasible, connect communities so they only have one of each.
– charge industrial users higher fees to process permit applications
– find a way to add
OK, sounds like a good weight-loss program to me…
If we can stop the pork-fed corruption & incompetence,
and quit enabling wasteful & unhealthy bad habits,
then we are getting shape to take the long walk back
to sobriety after 40 years of crude-addiction.
Maybe after a couple years of sobriety,
then we could be ready to give ourselves the gift
of knowing how to joyfully make $20billion/yr without
engaging in crude-behavior.
THINK HYDROGEN
Take a look at the news today. Russia (Putin) has stopped the currency decline but in doing it he is on a trajectory to burn through all the savings accounts during the next 36 months. Alaska has no currency of its own of course, but does spending savings to prop up the economy (betting God or OPEC will save us I guess) until the savings is gone sound familiar?
1) Increase all fees that do not cover the cost of the service. You wanna play, you’re gonna pay.
2) Eliminate the Department of Commerce. Shift pertinent divisions into the appropriate agency, which would free up resources being spent on administrative services for the department – since there will be no dept
3) Use SOA payscales, instead of exuberant wage scales, for AHFC, AEA, AGDC, ARRC, AIDEA. Also, bring ARRC into the executive budget act.
4) Cash in on the Alaska Aerospace Corp. insurance policy, and take the cash for the destroyed launch facility. Then shut the entire agency down.
5) Examine statutorily required program accorded all departments and determine which ones are necessary. Transfer duties onto municipalies or
Villages that have been free riding for a long time.
6) bonus cut: if the constitutional school funding court case stands, eliminate all community revenue sharing and all money which would normally go towards those communities. These communities will now be off the hook for many projects, which means the residents can pick up the tab. Again, wanna play, then you gotta pay.
7) Bonus: The Legislature looks inward and reduces their travel expense. There is no need for useless staff to be galavanting around the nation for conferences that generate no benefit to the state. What ever came about the last NCSL Conference? Answer: nothing.
Real answer: nothing, and a waste of state money.
Hmm. Looks like you just completed the survey.
IMHO; It’s easier for Alaskans to make $20billion/yr than to worry about slashing the budget.
How would I do this ??
… I’ll just sit here,
and wait.. like a wooden indian.
You need to convince me why you deserve to know how to make $20billion/yr,
every year, for a longtime.
Governor Walker –
1. Your survey sucks. It is a waste of time and state money.
2. Implememnt immediate cuts where possible. Don’t wait, don’t delay. A dollar saved is a dollar saved. The Kodiak Launch Facility should be shut down now. Layoff the Aerospace Corp employees now.
3. Cut AHFC Executive Director’s salary by 10 to 20 percent. There is no reason that Butcher went from DOR Commissioner salary of $130K to AHFC at a 1/4 million. Makes no sense and needs correction.
4. In fact, reduce all state corporation salaries by a minimum of 10%. Ask U. Regents to cut Chancellor pay by minimum of 10%
5. Quit funding RR passenger upgrades. Make RR add on a special fee for passengers.
Ooops, I didn’t mean the above post to be from Anonymous
Indeed, I just took the survey and skipped the “maximum 3 choice” option. Here’s my contribution. (note: I selected the “Yes, I want to be considered for an award” not because I’m wanting the Governor to buy me lunch, but rather, I have zero objection to having my name published with my opinions)
Elimination of Deputy/Assistant/Special Assistant to the Commissioner(s). Real empowerment means giving more authority AND responsibility to others. What could only be done previously by this group would now be authorized by directors; deputy directors could also be eliminated and that same empowerment given to managers and supervisors.
The State is too bloated with middle management and, sadly, authorized personnel cuts are often targeted toward to ‘worker’ at the bottom of the organization chart. Not only does that cut return a lessor dollar saving, but it tends to create more havoc for the general public i.e. DoT cuts 2 road grader/snow plow operators, leading to citizen dissatisfaction; citizen complains to legislator who in turn complains to Governor/Commissioner. Executive Branch replies with: “YOU cut our budget – we had no other options.”
OR, making cuts to the Admin of the Department as described above; 2 XE/PX employees are likely the cost of +3 production employees. And would anyone even know they were gone?
Hello Amanda,
My specific recommendation is to eliminate the duplication of effort and expense caused by having so many separate major state departments. For example why do we need a stand alone state commissioner position to oversee the National Guard and Veteran’s Affairs or why can’t the DEC be a subordinate directorate under the Department of Natural Resources.
That subject alone could consume serious time and discussion yet that level of scrutiny can hardly be addressed in this effort by the Governor. If fact, I would describe it as a generalized opinion poll rather than a serious attempt to glean citizen input.
Regarding specifics, there is a single question and that question in the form of a request which is: “Please identify the type of cost saving measure and area of government your idea focuses on.
So far so good….
Then you are asked to select a maximum of three choices from a very confusing (to me anyway) matrix which lists 12 governmental departments (and an “other: option) on the vertical axis and a choice of 4 options of actions on the horizontal axis including “spending cuts” , “additional revenue”, restructuring”, or “partnerships” . At the intersection of “department” and “action” was a select button.
I had no idea what “three choices” constituted . For example was I limited to say 2 actions within one department then only one action on some other department. (I was worried I might not be eligible for my “reward” if I screwed it up by selecting too many choices).
Next I was supposed to fill in a small block of text with a request to “Please provide specific recommendations for each of the ideas identified above.” Well, I wasn’t identifying “ideas” from the matrix, as I was choosing recommendations so that sentence is poorly written and confusing. I have a fairly up to date computer yet entering text in that space provided by “survey monkey” was a challenge and how could I possibly make a coherent argument in that very small space provided?
I didn’t finish so I didn’t even answer the 3rd question regarding my desire for an award; however, I did call the Office of the Governor and left a voice message stating my disappointment with this approach to asking Alaskans for input.
I am sorry the Governor’s Office didn’t put a little more thought and effort into this. Alas, you only get one chance for a first impression……
Lynn: Did you have a specific recommendation? I didn’t want to take it because I don’t. If so, can you share what it was and what the frustrating part of the survey was?
Come one, Garand, we have a $3.5 dollar budget deficit created by Republicans. Tell us how you would cut the budget by $3.5 billion. Get specific. The types of general cuts you write about do not come close to saving billions.
Itemize where you will cut, and list the savings.
Then tell us why we should continue to give away Alaska’s oil while our economy enters the worst recession of the last 50 years.
Willis:
“To claim this fiscal mess is not the fault of one party is simply not supportable – the Republican Party of Alaska has controlled this state government for years and yes, it is that party’s fault.”
Well said, Willis. It is the quote of the day. Republican “leadership” in Alaska is a torrid heap of manure.
Garand,
Time has passed and as much as you or I would like to return to the “good old days” in Alaska we simply cannot.
I personally loath what the two party system has done to this state and nation, yet that is the system the clear majority of Alaskans continue to support. Therefore the party in power “owns” the results of their efforts and now it is a little late to sing “kumbaya” .
To claim this fiscal mess is not the fault of one party is simply not supportable – the Republican Party of Alaska has controlled this state government for years and yes, it is that party’s fault. They embraced the all powerful and secretive caucus method that awards the party in power and in which membership would be denied to any caucus member who refused to support these bloated budgets. They also supported the assumed power of individual legislators to exercise defacto veto power over legislation by closing the forum of debate. They refused to force the politically disorganized areas of Alaska to form local taxing authorities when they had the “power of the purse string” to do just that . They sometimes placed a national political agenda over the best interests of Alaskans.
I quit the Republican party to become a political independent probably now ten years ago when after realized that they had abandoned any semblance to the party that once stood for individual effort with minimal government interference in citizens affairs yet also understood that creating opportunity for all Alaskans to succeed was not a damnable offense. I wanted effective government not just a cabal of like thinkers taking care of themselves and those that supported their political futures under the guise of “God given, rock solid, traditional family values”.
Now, would the other party have done any better or worse? I imagine the results would have been exactly the same given that they also would have adopted system of government that gives all power to either political party. Anyway, that is now a moot point as we deal with the paradigm shift in Alaska.
We probably agree that now is the time for some very strong fiscal medicine; however, we need not be vindictive in our approach and at the same time we might just consider a significant change to the way we populate elected offices starting with the next primary election where we allow independents to run for office to gain a place on the general election ballot. Then we strip the exemption from state open meeting law from the legislature and we demand that if they don’t want to deal with legislation then stop introducing it, otherwise the public forum will be available for open discussion and open decision.
So-called across the board spending is potentially worse than lazy. It can be dishonest in that it may tell Alaskans that budgets can be reduced without impacting or eliminating programs, which is seldom if ever true. It’s far better to do a few essential programs very well than to promulgate the myth that government can continue to do thousands of programs well enough.
Blaming the other political party or the other branch of government accomplishes absolutely nothing. We are all to blame. We approved long term debt even as we all knew oil production had dropped by 75%. We all demanded more spending – more education spending, more roads, new bridges, more Medicaid, new sports arenas, etc. etc. – and we cannot now complain because that is what we were given. We are addicted to spending government money.
Cutting only 5% or 8% similarly accomplishes nothing in that operating budget reductions of that magnitude can be found within the noise of government. Alaskans need to identify programs that are not absolutely necessary, and we need to tell interest groups – even the education and hospital lobbies – that it’s time to slaughter some sacred cows. Alaskans need to push back against the spending advocates. If instead we spend the cash reserves down to zero and if we try to support the government oil built by taxing and charging fees of the fragile, non-petroleum economy we have we will discourage and drive off the very entrepreneurs Alaska most needs.
What we now need is less government. Please write to Governor Walker and tell him your ideas. Let the governor and your legislator know what you see that falls outside the bare essentials. For example I don’t think we need a state park division and state park rangers competing with private campgrounds. I don’t think Alaska needs the largest governmental mortgage and multi-family housing organization in the nation (per capita, and by some measures the largest in the nation regardless of state population) displacing the private sector. The state doesn’t need to own a government railroad. We don’t need the University of Alaska and the state student loan company competing with each other to make loans to the same students. You likely have ideas that are better than mine, and you may disagree with my ideas; but in any event let elected officials know how best to bring spending in line with income.
Of even much greater importance in resolving this budget shortfall and preventing it becoming an extended period of economic dislocation we need municipalities to stand on their own – including munis in the unorganized borough. Schools advertising to hire teachers who can bring their own school-aged children to increase state spending in a municipality can only become something in the past if every municipality has its own skin in the game. And if the state continues to provide in some municipalities what local government provides in others then no doubt we can expect the courts to weigh in much as they have with education.
Alaskans stood on their own two feet before oil. This potential state recession is not good news but we have no choice about whether it happens; we only can choose how we deal with it. This is an opportunity to learn how to stand on our own two feet again. But government needs to get out of the way, and that is best done by reducing spending before all the cash is gone. Governor Walker led us to believe we should expect that (back when he was running for the job). Don’t allow the Juneau bureaucracy to talk him out of it!
Cutting 5% or 8% across the board is the lazy manb’s way of govt budget cutting. It is ridiculous.
Some areas can be cut more, others less. Governor, quit being lazy. You wanted the job. Now, deal with it.
I attempted to respond to the Governor’s budget survey using the link- a frustrating experience which I encourage others to attempt. The Administration cobbled together a rather incomprehensible question using “survey monkey” software which they apparently assume is all there is to gleaning public input on such a complex subject.
If the Walker Administration can make any sense out of responses to that question they are indeed a talented bunch. Frankly, I couldn’t clearly understand what they were asking of me other than do I want a reward (and I assume the issuance of these rewards will cost the state even more revenue).