Gov. Bill Walker warned legislators Saturday that an option they’re considering to fund the state’s budget will harm the state’s economy and threaten Permanent Fund dividends.
Some legislators have raised the option of closing the state’s $4 billion budget deficit by spending Permanent Fund earnings.
In a letter to lawmakers, Walker said “he simply cannot accept” spending the earnings without a plan to balance the state’s budget. He said it would lower the state’s credit rating, which would increase borrowing costs. And Walker said the money for Permanent Fund dividends would be gone within four years if the legislature doesn’t adopt a sustainable budget.
The legislature could also close the budget deficit by drawing from the Constitutional Budget Reserve, if supporters of the CBR draw could get enough votes. This would require support from three-quarters of both chambers of the legislature.
In an interview on Friday, Walker said it remains important to him that a fiscal plan balance the budget by the fiscal year that begins July 2018. That’s been his definition of a sustainable plan since he unveiled his budget in December.
Read Walker’s letter here:
