A Republican state senator from Anchorage is proposing major changes to Alaska’s state spending cap, in the first step toward a long-term plan to balance the state’s budget that multiple legislators say is a priority. (from AlaskaBeacon)
Sen. James Kaufman, R-Anchorage, speaks on the floor of the Alaska Senate on Friday, Jan. 27, 2023, in Juneau, Alaska. to Alaska’s state spending cap, in the first step toward a long-term plan to balance the state’s budget that multiple legislators say is a priority.
The goal, Kaufman said, is to prevent state spending from surging when oil prices spike and to avoid spending from plunging when oil prices fall, something that could cause double-dip harm to the state economy.In years when oil prices spike, Kaufman envisions the windfall being saved, then spent in future years, spreading the impact of that price spike long after prices have returned to lower levels.
Alaska already has an annual spending limit — it was installed in 1982 and remains in the Alaska Constitution — but it’s never been reached and a bipartisan, bicameral working group suggested a lower limit in 2021 as part ofOther parts of that plan include spending cuts, new revenue , and constitutional amendments to both limit the size of the state government’s annual draw from the Permanent Fund and guarantee a Permanent Fund dividend.provided by the senator’s office.
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