Gov. Mike Dunleavy

Gov. Mike Dunleavy submitted the former Gov. Bill Walker’s proposed $11.5 billion FY2020 budget Dec. 15 as a “placeholder” to meet the statutory deadline for submitting a budget.

“The action was taken to demonstrate the commitment to be honest with Alaskans about the state’s budget shortfall,” the governor’s office said in a press release. “The root of the problem with the Walker administration’s budget lies in a single number – its unrealistic projection that oil will sell for $75 dollars per barrel between July 2019 and June 2020,” the statement said.

That is state Fiscal Year 2020, which begins next July 1.

“The Dunleavy administration is all about truth in budgeting,” said new state Revenue Commissioner Bruce Tangeman. “We performed a thorough analysis of the revenue estimates submitted by the previous administration and, it became clear it did not represent the true size of the budget deficit.”

Using a more realistic oil price forecast of $64 dollars per barrel, the deficit balloons to $1.6 billion dollars, Tangeman said. “That figure will be the starting point for vigorous discussions with state agencies, legislators and the public. Walker’s $11.5 billion-dollar spending plan is unsustainable and leaves substantial room for spending reductions and budgetary reforms that reflect the state’s current fiscal situation,” he said in the statement.

In the weeks ahead, the Dunleavy administration will revise the budget it submitted today to reign in state spending and prioritize the core services and programs that really matter to Alaskans, Tangeman said.

“All items of state expenditures are on the table,” said Office of Management and Budget Director Donna Arduin in the administration’s statement. “The state must learn to live within its means and we get there by making the tough spending choices,” she said.

Traditionally a governor submits amendments to the proposed budget, in this case a new budget, soon after the Legislature convenes Jan. 15.

Budget documents are now available on the OMB website at www.omb.alaska.gov/html/budget- report/fy2020-budget/proposed.html and the Department of Revenue’s Fall 2018 Revenue Sources Book is available at: http://tax.alaska.gov/programs/documentviewer/viewer.aspx?1491r

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