What have we really cut from Alaska’s budget?

AKHEADLAMP is a big fan of Ed King with King Economics Group. His recent series on the budget is top notch!

A key theme in the gubernatorial debate has been Alaska’s budget. Senator Dunleavy has been attacked for talking about a spending problem and the desire to reduce the size of the budget. Critics claim it has already been reduced greatly and there is no more room to “cut”.

The critics are wrong. Senator Dunleavy is on the right track.   We offer you part 4 of Ed King’s series. We begin at the end.

“When you look closely at the $3 billion of budget reductions, almost none of them can truly be called reductions to the size of government. Most of the “cuts” came from things that shouldn’t really have been called “growth” in the first place. And most of the real cuts were offset by growth in non-UGF spending.

  • The major “cuts” happened in the capital budget. But resisting the urge to buy new things is not the same as a reducing government.
  • Neither is refusing to pay the bill on something that is owed. That just moves the money into a different time period. (tax credits)
  • Paying the state retirement contributions in advance did just the opposite. It just moved the payments into a different time period.
  • Trying to hit a budget “target” is a fundamentally bad approach to the problem; one that lends itself to moving around the numbers to give the appearance of success but doesn’t actually accomplish anything. We can do better.”

You can read the full article here: Exploring Alaska’s Budget: Part 4 – What Did We Cut?