Borough Mayor Mike Navarre gave a presentation on Alaska’s current budget deficit along with some of his own thoughts at Tuesday’s joint Chamber of Commerce luncheon.
Mayor Navarre: “I think that we’re probably looking at going into a recession, because the low price of oil means that state spending is less and we’re seeing that in capital spending as well as operational budget cuts. But it also means the private sector is scaling back on some of their operational investments because that’s price sensitive also.”
He said cutting state spending is great rhetoric, however many of the state’s top agencies have already been “cut to the bone”.
Mayor Navarre: “The dilemma that’s facing the legislature is that there’s going to be a demand by some people that there’s going to be a demand by some people for more funding for education but if you’re looking at reducing state budget, one of the biggest budget items is education spending so it creates that dilemma and discussion and debate that going to take place and should.”
Navarre said using the Permanent Fund Dividend Earnings to assist with the state budget deficit must be a discussion everyone is willing to make.
Mayor Navarre: “If we’re going to close the fiscal gap we only have a few tools at our disposal: budget cuts, new revenues, and earnings of the Permanent Fund. And I think that the difference between the late 80’s and early 90’s, and now is that even if oil prices recover, our production is at least a third of what it was in 1988.”
In a 1992 September Special Election, Alaskans voted 83.25% No when asked if the state should use Permanent Fund Earnings after PFD checks are disbursed to help with state deficit.