Based on Office of Management and Budget data, over the last decade annual Alaska state general fund spending – operating and capital combined – has nearly tripled, from roughly $2.3 billion in FY 2004 to a now-projected $7.1 billion for FY 2014. Over the same period, the Consumer Price Index (CPI) has only increased roughly 27 percent.
The escalation has been substantial even when measured only over the last five years, since Governor Parnell took office. Alaska state general fund spending has increased over that period alone by approximately 40 percent, from roughly $5.1 billion in FY 2009, the last budget prepared under Governor Palin, to $7.1 billion for FY 2014. The total spend for FY 2013, the most recently completed year, was $7.8 billion, a 55 percent increase over the last budget prepared under Governor Palin. During the same period the CPI has only increased 6 percent.
As I have reported on these pages before, earlier this year the University of Alaska – Anchorage’s Institute of Social and Economic Research (ISER) looked at Alaska’s fiscal situation and had this to say: “Right now, the state is on a path it can’t sustain. Growing spending and falling revenues are creating a widening fiscal gap. … Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.”
That analysis, by the way, was based on projections which assumed the continuation of ACES.
Alaska is not facing a revenue problem, it is facing a serious and soon, catastrophic spending problem of the Governor and Legislature's own creation. For a supposedly fiscally conservative state, Alaska is careening toward a crisis, not attributable to "federal overreach" or any other Outside force, but entirely created by the state's own inability to control spending.Someone suggested recently that I should "sharpen my point, call a spade a spade, get down in the trenches, name names so Alaskans know who is responsible and who has to be changed to address the situation." This is an effort in that direction. Any reactions?