Town meeting on budget gap comes to Juneau

Meeting aims to explain what declining revenues mean for state

Posted: Wednesday, September 05, 2001

Rep. Bill Hudson believes the state must get its finances in order now or Alaskans will feel it in the wallet later, and he wants Juneau residents to join him in the effort.

Hudson on Friday is hosting Juneau's first town hall meeting by the Fiscal Policy Caucus, a loosely formed bipartisan group of about 30 lawmakers.

The purpose of the meeting is to educate people about falling oil revenue and what it means to the state's long-term financial health. The coalition also will take public comment on ways to bring state spending in line with state revenue, said Hudson, a Juneau Republican.

"We need to have the public as broadly as possible around the state of Alaska weigh in at this time and begin to build up some public support for taking some action other than the status quo," Hudson said.

Hudson has criticized the Legislature for failing to adopt a long-term plan in the face of declining oil revenue, which in past years has accounted for about 80 percent of general fund spending and has helped fund schools, prisons and other services. The state may be forced to cut vital programs if it doesn't find new revenue soon, Hudson said.

New revenue could mean imposing higher or new taxes and using permanent fund earnings for government, although the coalition has not taken a position on those options. Voters in 1999 overwhelmingly rejected a plan by lawmakers to use permanent fund earnings for state services.

The state covers an annual revenue shortfall by tapping a $2 billion savings account called the Constitutional Budget Reserve, which is expected to run dry within five years. The state probably will have to draw at least $600 million from the account to fund the budget for the current fiscal year, Hudson said.

The coalition formed in March to compel fellow lawmakers to endorse a long-term fiscal plan before the account runs dry. Hudson hopes Alaskans will pressure lawmakers to work on a long-term plan in the legislative session that begins in January 2002, an election year.

"If you could ever get this to a point where the public can see that the Legislature continuing its easy action of simply spending down our savings account is going to perhaps put their job at risk in five to six years or cost them their permanent fund dividend in five to six years, I think they would start asking questions of people running for all levels of office and that would be healthy," Hudson said.

The meeting is scheduled Friday from 7 to 9 p.m. at Aldersgate United Methodist Church on Cinema Drive, near the Glacier Cinemas in the Mendenhall Valley. It will include presentations by the state Department of Revenue and Office of Management and Budget.

The group already has taken public comment in other Alaska communities, and plans to hold another Juneau meeting probably in late September or early October, Hudson said.

Kathy Dye can be reached at kdye@juneauempire.com.



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