Opinion: Threat to the Permanent Fund is not inaction
The Fitch Ratings downgrade of Alaska’s credit rating last week was no surprise. Once again, the Legislature and Governor have failed to deliver a sustainable state budget. Instead, they continue to falsely claim that significant budget cuts have been made in order to convince the public to allow politicians access to the Permanent Fund in order to fund big government.
In reality, little progress has been made to reduce the ongoing operating cost of State Government. Agency budgets, the largest underlying cost of State government, have only been reduced from $8.5 Billion (FY 15) to $8.21 Billion (FY 17), which is 3.5% reduction over a 2 year period. (http://www.legfin.akleg.gov/BudgetReports/LY2016/Operating/ConfComm/2016...). Until we make significant reductions to the Operating Budgets, we will continue to burn through our savings at an alarming rate.
The biggest threat to the Permanent Fund is NOT inaction in restructuring the Permanent Fund, but rather the lack of will in the legislature to make meaningful reductions in the size of our massive State Government.