With revenue forecasts as dismal as this year’s have been, the legislature’s passage of a very large budget for fiscal year 2024 (FY 2024) is unfortunate. In this coming fiscal year, legislators plan on spending over $8 billion in state funds on government operations and capital projects (not including Permanent Fund Dividend payments).
In the end, officials plan to spend $8.06 billion in state funds, which includes Undesignated General Funds, Designated General Funds, and “Other” State Funds, but excludes the Permanent Fund Dividend payments. This is $353 million above Alaska Policy Forum’s Responsible Alaska Budget (RAB) of $7.71 billion and 9.7% more than last year’s budget. The RAB represents a strong fiscal rule that sets a maximum budget amount based on the previous year’s budget adjusted for inflation and population growth. Abiding by the RAB limit, $7.71 billion for FY 2024, would have prioritized the needs of Alaskans without excessively growing government.
Alaska needs to recover from the economic challenges of the last few years, even while continuing to recover from a decade of excessive government spending from 2004 to 2015. More widespread government spending makes the second problem worse while doing nothing to address the first.
On a positive note, policymakers are not expecting to draw any money from the state’s savings accounts. For this, we applaud the legislature.
Rather than showing fiscal restraint during a time when Alaskan families are having to tighten personal budgets, legislators unnecessarily increased the state’s budget. Moving forward, Alaska Policy Forum will continue to call for a Responsible Alaska Budget that grows only by annual population growth and inflation, as well as advising adoption of a meaningful constitutional spending limit, and broader fiscal restraint.
Alaskans deserve fiscal responsibility.