Priority #1 ~ Fiscal Responsibility

budget.pngAlaska's Budget

Restore Order and Sustainability in our Fiscal House

When the Senate adjourned in April 2014, Alaska's revenues were projected to be about $4.5 billion dollars for the coming 2015 fircal year. Our savings of nearly $12 billion could cover projected budget shortfalls for almost a decade.

By December 2014, oil prices had dropped 40% taking with them nearly 50% of all anticipated state income. Suddenly, savings which could last a decade, would now be exhausted in just 3 years.

Commited to taking Alaska's fiscal crisis seriously, the Alaska Senate cracked down hard on both operating and capital spending.  Working across party lines, General Fund spending in both the operating and capital budgets was reduced by $777 million dollars in 2015 and an additional $418 million in savings were found in 2016 including:

  • Hundreds of responsible reductions to the operating budget which save the State at least $300 million in unrestricted general funds. Targeted reductions were taken in all branches of government and all departments averaging an across-the-board 10% decrease.
  • Major policy reforms to our Medicaid and Criminal Justice systems netting hundreds of millions in long term, re-occurring savings.
  • Capital budget expenditures have been ratched down from a high of $2 billion in 2012, to $113 million in 2015 and $86.7 million in 2016, enough matching funds to capture the maximum number of Federal dollars.
Total UGF Spending 2006-2017
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General-Fund-Savings-in-Capital-Budget
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Agency-reduction-percentages
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Catastrophic Drop in Oil Prices Undermines Alaska's Fiscal Certainty 

CBR-Projected-Balance
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Nearly 90% of all State income is realized directly from oil production which has been declining for years.   When the price collapsed, billions in anticipated revenue evaporated.  This dependence on a single resource leaves Alaska financially vulnerable to market forces beyond our control.

The Alaska Senate Majority believes that a short-term financial focus will eventually leave the State of Alaska with increasingly grim budgeting options. Sustainability should be our long-term goal, not just getting by from year to year.

Fortunately, Alaska's past leaders foresaw a day when oil production would wane and provided legal frameworks for saving a portion of Alaska's oil wealth. Our Constitutional Budget Reserve contains nearly $6.5 billion in savings. This  allows Alaskan's the time to engage in a conversation on budget priorities and our ability to fund those priorities. Many of our members are actively surveying their districts to learn what Alaskan's expect from their government and what revenue options they prefer.

Tough times require tough decisions
Tough times require tough decisions ~ Watch Now >
Senator Hoffman: SB 196 Stabilizes the PCE
Senator Hoffman: SB 196 Stabilizes the PCE ~ Watch Now >
Senator McGuire: The Time to Act is Now
Senator McGuire: The Time to Act is Now ~ Watch Now >

Medicaid Reform