The Anchorage Economic Development Corporation has provided an economic outlook for 2021 and recommended strategies to combat Alaska’s fiscal crisis. The Corporation says that the state’s fiscal crisis is a detriment to getting Alaska back to financial growth.
Bill Popp, President and CEO of the Anchorage Economic Development Corporation says that it started in 2014 when Alaska had $16 billion in ready cash reserves outside of the Permanent Fund that reportedly had been spent down to nothing, “The challenge that we face now is that it creates so much uncertainty for business in terms of what are taxes going to be? What is the level of government services going to be in the coming years? What is this going to mean to the workforce that we’re very concerned about being able to have available to us and to our own profitability as an organization? For the last several years, our board has advocated for a balance of targeted budget cuts, new revenue sources and use of the permanent fund. We did see the one step forward which was making use of the permanent fund through the percent of market value strategy which was implemented a couple of years ago. We now have watched the state’s main revenue source which used to be about 90% from oil is now 70% from the permanent fund because oil is not producing the vast amounts of wealth for our state. It’s now a pale shadow of what it used to be.”
Popp speaking to KSRM’s the Bird’s Eye View on Wednesday afternoon. The Corporation sent a letter to Gov. Mike Dunleavy and legislative leaders calling for all sides to compromise, saying that the sales tax revenue won’t cover state expenses. The Corporation proposes limited, targeted budget cuts while maintaining and improving essential programs and services. They also say that a statewide sales tax would protect municipal sales tax collections and contribute new revenues to the state treasury.
A survey, which represented the views of 210 Anchorage businesses identified common themes as shared by the Corporation’s Board of Directors. When asked what issues were most important to the Anchorage economy, 79% of businesses surveyed ranked ‘sustainability of state of Alaska operating budget’ as most important.
More information can be found here.
