Alaska House District 36 Rep. Dan Ortiz of Ketchikan gave a legislative preview to the Ketchikan School Board last week.
He told the board that the biggest issue will be how best to overcome the proposed budget’s current $1.6 billion deficit. Ortiz said the deficit is that large because new Gov. Mike Dunleavy chose to provide “full” Permanent Fund Dividends, rather than use a portion of Perm Fund earnings to fund government services.
“He was elected. He was elected soundly in District 36,” Ortiz said. “Obviously, people liked a lot of what he had to say. And probably what they liked the most was what he had to say about the Permanent Fund Dividend.”
The proposed budget from Dunleavy was preliminary. An updated budget with significant cuts is expected from the governor’s office soon.
Ortiz said in the past, the Legislature used state savings to make up for budget shortfalls. But those savings have been depleted, and there’s now just about $2 billion available.
“So we could actually do one more year of funding this deficit by using pretty much the remaining amount of money that’s in the Constitutional Budget Reserve,” he said. “Nobody advises that. Economic experts don’t advise that. Everybody said that you do need to have a cushion in case of emergencies, in case of accidents, things like that.”
And, he said, the Legislature would just be putting off the problem for another year. So, lawmakers need to balance a $4.3 billion budget with a $1.6 billion deficit.
Ortiz said that’s going to be particularly difficult, because the state already has made big cuts to all agencies, such as Fish and Game and the Department of Transportation.
“So, when we talk about concerns with our Alaska Marine Highway System, or when you hear complaints like I hear regularly about the need to pave South Tongass Highway, the Department of Transportation hears those complaints as well, but they’ve also been faced with 35.4 percent reductions in their funding level since 2015,” he said.
Ortiz said that at $1.4 billion, funding for education is the biggest part of the state budget, followed by Health and Human Services. Ortiz said if funding were completely eliminated from every other agency, it would save only about $550 million.
“If this governor wants to eliminate $1.6 billion from his budget, he cannot do it without significantly impacting education and significantly impacting health and human services,” Ortiz said.
After the governor’s updated budget has been submitted to the Legislature, Ortiz said he’ll send out a survey to House District 36 voters to get feedback.
The legislative session starts on Tuesday.
