Wednesday, April 16, 2014

#AKbudget| Doing the math.2 ...

Excel is an interesting tool.  Once you take the time to load the raw data, it then provides numerous ways to think about and analyze the data.

Yesterday, I loaded state revenue and spending data since FY 2000 in order to demonstrate the backup to the claim some were questioning that this legislature is about to produce the two highest budget deficits in Alaska's history.  The results are published here.

Once having done that I realized I could analyze the data in various time series, including by which Governor was responsible for which budgets.  Interestingly, yesterday morning on The Glen Biegel Show (in a segment that began at 5:35) Governor Parnell claimed the "Democratic controlled [state] Senate" was responsible for the high spending levels early in his Administration.

But that's not correct, of course, since the Alaska Constitution provides the Governor with the power to veto individual legislative appropriations, the so-called power of "line item veto" (Section 2.5), and enables an override only upon the concurrence of three fourths (75%) of the legislature (Section 2.6), a nearly impossible task.   If the Governor thought the budgets were excessive, he could have vetoed the portions he thought were so.  Even at the height of the Bipartisan Senate Majority, he easily could have mustered 16 legislators (likely in the House alone) to sustain.  He didn't and instead accepted the resulting spending levels.

So, as with the other Governors before him, he -- and the legislatures that passed them -- own the budgets they enacted.

Recognizing that the budget process for a coming fiscal year starts in the summer and is fairly far along by the time a new Governor takes office (and thus in a transition year is more a reflection of the previous Governor than the current), here is the amount of spending (in $ Billions) since 2000 each Governor  has authorized -- and the average -- during their term in office.

Some have argued that the increases in the budgets over previous levels are due to inflation.  Using the CPI as the measure, overall inflation between 2009 (the last year before this Governor became responsible for the budget process) and 2014 has been roughly 10.1%.  Applying inflation to the FY 2010 budget (prepared in 2009) would result in a budget for FY 2015 of $5.61 billion.  This year this Governor and legislature's FY 2015 budget is likely to land somewhere in the range of $6.5 billion, an increase of over 25% from 2009 levels.

Interestingly, applying inflation to Governor Knowles' last budget (prepared in 2002) would result in a budget for FY 2015 of $3.27 billion.  At $6.5 billion, this year's actual budget will almost double the inflation adjusted level of Governor Knowles' last budget.

As they say, the numbers speak for themselves.