Right direction

Gov. Sean Parnell signed a $12.8 billion budget that happily reduced unrestricted general fund spending from the $7 billion of last year to $5.9 billion this year – and he did it without deploying his veto pen once. It is a start.

With declining revenues and dwindling oil production a growing economic problem, at least for the short-term, the shrinking budget is a good sign. For his part, the governor gave credit to the legislative leadership for its frugality.

Scott Goldsmith of the University of Alaska’s Institute for Social and Economic Research estimated some time ago the state could afford to spend about $5.5 billion a year in unrestricted general fund money over the long haul and do OK until about 2023.

This year’s budget is a step in the right direction, but with our economy and fiscal resources in limbo at this point, it would be wise for legislators and the governor to continue trimming the budget whenever possible.

Much will depend on what happens in August, whether the left, which is pushing for repeal of oil tax reform designed to spur production and revenue, wins its wrong-headed attempt to push Alaska back to the economic Stone Age.

If the left succeeds, Alaska will return to some semblance of the old, failed oil tax, Alaska’s Clear and Equitable Share. If it does, this year’s current budget will be much, much too big and Alaska will be on the road to ruination.

If that happens, $5.7 billion in unrestricted general fund revenue will seem like the good old days.

 

 

 

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