On Monday, Gov. Bill Walker proposed a nearly $6 billion budget for next year. While Walker is leaving office, his spending plan could provide the basis for Gov.-elect Mike Dunleavy’s first budget.
Just as Gov. Walker inherited a budget from former Gov. Sean Parnell four years ago, he’ll be handing off a proposal to Mike Dunleavy this year.
Dunleavy is being sworn into office next Monday. He could make changes to Walker’s budget before the Dec. 15 deadline to submit a spending plan. Then he could offer more amendments to the budget during the legislative session.
Walker told the Anchorage Chamber of Commerce on Monday that his proposal would be Alaska’s first balanced budget since 2012, without drawing on the Constitutional Budget Reserve. He noted that the spending plan depends on unpopular compromises over the last four years.
“I didn’t like them,” Walker said of these decisions. “I didn’t like any of them. But what are you going to do? You can’t just continue to live off of savings and say, ‘Everything is great.’”
Walker and senior administration officials provided details of the budget at Monday’s presentation to the Chamber.
Walker’s budget includes a Permanent Fund dividend of $1,800. That’s $200 more than this year, but over $1,000 less than the amount under the formula used before 2016. Dunleavy said he wants to offer the full amount under the formula.
Walker’s budget also provides for 24 more Alaska State Troopers, five prosecutors and three child-protection attorneys. There also would be money to address crimes targeting Alaska Native women.
“We’re going to fund investigators to begin the work that needs to be done on the unresolved murders of indigenous women in Alaska,” he said. “It’s the highest in the nation, so we put money in for that.”
He also proposed buying a Pilatus airplane that would be used for public safety and could reach 91 percent of rural airports.
And the budget proposal provides money for both counseling and safety equipment for schools.
The proposal includes $230 million for deferred maintenance across the state. It includes $16 million in new funds for tourism and fisheries. Some of the tourism money would be aimed at supporting flights to and from Asia.
“It’s going to open up markets that we haven’t seen for a long, long time,” Walker said.
There’s a line in the budget for the proposed gas line, as well as one for the Arctic Strategic Transportation and Resources program, to build a road network in the Arctic.
Walker noted Dunleavy won’t have much time before he submits his own budget. But Walker wished Dunleavy well.
“If he is successful, his administration is successful, Alaska’s successful. And that’s really all I care about,” Walker said.
While the budget relies less on oil than in previous years, it’s still important.
The spending plan relies on a price of oil of $75 per barrel, which would be $10 more per barrel than the most recent price of $65. That’s because the projection was made in October, when prices were higher.
Walker budget director Pat Pitney said the budget is 20 percent less than the one the administration inherited four years ago, including 10 percent less spending on government services. But those services would increase by 3 percent next year under Walker’s proposal.
Pitney defended the decision to reduce dividends the last three years. She said this has led to the Permanent Fund being $2.4 billion higher than it would have been without the reductions. This could allow the fund to grow another $100 million per year.
But the incoming governor has raised the possibility of sending that money back to Alaskans in the form of a one-time, roughly $3,500 PFD reimbursement.
Dunleavy’s transition spokeswoman Sarah Erkmann Ward said the transition team hasn’t had the opportunity to examine the proposal. She says Dunleavy will “definitely have his own ideas.”
A spokesman for Walker said that the documents containing details about the budget will be available on Friday.
Related video: Rethinking the Alaska Permanent Fund – the 2018 changes to the way Permanent Fund earnings are spent
