Alaska needs new revenue
A newly released analysis says options like large cuts in capital budgets, imposing state sales or income taxes, or cutting Permanent Fund dividends may not eliminate future deficits.
In its overview of Gov. Sean Parnell’s budget plan, the Legislative Finance Division says current spending levels are unsustainable without additional revenue, and simply restraining spending growth is insufficient.
The analysis says without reserves the budget would have to be reduced by $2.5 billion annually for the state to live within its means.
The analysis made assumptions based on the fall revenue forecast, including no growth in agency and statewide operations after next year and capital budgets set at $800 million in unrestricted general funds annually.
It says state reserves would last to fiscal year 2024 if the forecast and assumptions held.