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House candidates discuss balancing Alaska’s budget during Anchorage Chamber of Commerce forum

Voting in Juneau for the August primaries.
Voting in Juneau for the August primaries.(KTUU)
Published: Sep. 28, 2020 at 7:17 PM AKDT
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JUNEAU, Alaska (KTUU) - Candidates for the Alaska House of Representatives spoke about how to balance the state budget on Monday, during a forum held by the Anchorage Chamber of Commerce.

The Alaska Legislature is facing a roughly $300 million deficit when it convenes in January to write the budget for the next fiscal year. That deficit figure doesn’t include a Permanent Fund dividend for 2021.

To pay a full Permanent Fund Dividend under a decades-old statutory formula ignored in recent years by the Legislature would see the deficit balloon to over $2 billion.

Eight prospective legislators for the House who are hoping to represent Anchorage districts spoke about how to balance the budget and whether new revenues are necessary.

“I’m not ready to talk about new taxes until we get state spending under control and reform our government,” said Tom McKay, a retired petroleum engineer, who defeated Rep. Chuck Kopp in the Republican primary.

McKay, who is running against Democrat Sue Levi, said recent primary results that saw seven Republican incumbents lose to challengers showed that Alaskans want to see state spending cut.

The debate over whether to implement new statewide revenue measures is likely to come before the Legislature in January. The House is currently run by a coalition majority with Democratic, Republican and independent members.

Republicans are hoping the Nov. 3 election can see an entirely GOP majority in the House.

Anchorage Democratic Rep. Ivy Spohnholz hit back at the idea that reducing state spending alone could bridge the state’s fiscal gap.

“Anybody who says we can cut our way to balancing the budget is just not being honest with you,” she said.

Whether to implement new statewide revenues doesn’t split neatly along party lines, neither does paying a big PFD with the state facing profound fiscal challenges and the economic challenges of COVID-19.

Rep. Mel Gillis, R-Anchorage, is running against independent Calvin Schrage for his Anchorage seat but advocated for new revenues with a caveat.

“Our savings are almost gone. We face some serious financial challenges, we do need new revenue. But what we do need is a spending cap,” Gillis said.

Schrage focused on the impacts of Alaskans who rely on state services if the budget is cut. In recent years, state spending has been reduced and some in the Legislature have argued there is a limit to how much more can be cut.

“We depend on these services. We depend on our schools, we depend on our university and public safety,” Schrage said.

Other candidates argued that implementing new taxes during the pandemic could hinder the state’s recovery from the economic effects of COVID-19. Others argued that a small PFD would also be harmful to Alaskans struggling financially during the pandemic.

Copyright 2020 KTUU. All rights reserved.

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