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In letter to governor, AEDC makes its own recommendations for state budget process

Undated shot of Anchorage, Alaska.
Undated shot of Anchorage, Alaska.
Published: Apr. 29, 2021 at 10:08 PM AKDT
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ANCHORAGE, Alaska (KTUU) - Anchorage’s nonprofit that’s long touted itself as being “dedicated to growth and diversity of Anchorage’s economy” is expanding from its city focus and officially taking a stance on the state’s fiscal crisis, as detailed in a letter to Gov. Mike Dunleavy.

The Anchorage Economic Development Corporation, which sent the letter this week to Dunleavy, House Speaker Louise Stutes and Senate President Peter Micciche, has historically been focused mainly on the city of Anchorage. In a rare move, correspondence was sent in the form of a letter to the Dunleavy administration in an effort to appeal to state officials.

“We think these are steps that could be components of a larger solution,” said AEDC President Bill Popp. “There’s more to be done. A sales tax will only generate a modest level of revenue. The Permanent Fund needs to grow further before it can provide full funding to state government. But we also have to recognize that the days of oil and gas paying 90% of government expenses are gone.

“Nobody is going to get everything that they want in a solution to the state’s fiscal crisis,” he added.

Popp said the hope is that one of more of the strategies suggested might be implemented as part of a solution to the state’s ongoing fiscal crisis and budget battle.

“A compromise gets us on track,” he said, “and that’s what we need to work for.”

In the letter, the AEDC board recommended steps it believes will best aid in combating the state’s fiscal crisis. Its members, as a group, proposed targeted budget cuts, while also maintaining and even improving essential programs; a statewide sales tax, but only one that would also protect municipal tax collections; and even an amendment that they would want to incorporate into the Alaska Constitution to protect the Permanent Fund and its assets, as well as the benefits Alaskans receive from that portfolio.

“There is likely going to be compromise,” Popp said. “There is likely going to be discussion. But at this point in time, the board wanted to spur a conversation within the Legislature generated from the business community, that says, here are options we think are good options to consider.”

Not all of the ideas are expected to be accepted, Popp said, but the AEDC board wants to collaborate with the Legislature, and to “be an active participant in the process” of helping find a solution for both Anchorage and the state.

As of Thursday, some “rewarding” dialogue has been had between the AEDC and several House members, according to Popp. He did not mention any state senators or the governor, whose office did not respond to a request for comment on the letter itself.

However, Dunleavy has characterized his budget package as “a path forward, with the goal of stabilizing the state’s economy.” A version of his budget proposal has been out for several months, and the deadline for the Legislature to pass a budget is looming.

Several lawmakers have said they believe that if Dunleavy, the House and Senate can all work together, it is still possible to pass a budget on time.

You can read the letter sent by the AEDC by clicking here.

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