Falling Oil Prices Crush Alaska Budget

Ten thousand state workers in Alaska are going to lose their jobs July 1 if their state legislature can’t agree on a Fiscal Year 2016 budget by the end of June.

As with their colleagues in many of the other 49 states, Alaska legislators don’t have enough money to make ends meet and they are running out of couch cushions to search under for spare change.

Alaska’s budget deficit for Fiscal Year 2015, which will end June 30, is estimated to be approximately $3.8 billion. The Fiscal Year 2016 deficit could be $3.2 billion.

Tensions are running so high in Alaska that a post on the Alaska GOP’s Facebook page accused Gov. Bill Walker (I) of being a “hermaphrodite.” He is not, of course. Walker is simply a politician who professes to be neither a Democrat nor a Republican.

Another example of the frayed nerves in Juneau: The GOP didn’t pull down the post. Republicans just explained that its author, Art Chance, was a former labor analyst for the state of Alaska.

Gov. Walker has hired a mediator to try to help resolve the six-week-long and counting legislative budget conflict.

It is not as if bankruptcy was imminent.

Alaska does have a reserve fund upon which state officials can draw. But Walker pointed out in February 2015 when he released an amended budget proposal that Alaska was already hitting that to the tune of $10 million a day, and obviously that can’t go on forever.

“I have asked Matt Peterson to be available to step in and mediate this legislative impasse so we don’t have a government shutdown. I urge the legislature to take advantage of his expertise so we can move forward,” Walker said.

Peterson will have his work cut out for him. The “hermaphrodite” comment was just one shot fired across one party’s bow by another.

During the budget debate in the Senate, Democrat Sen. Bill Wielechowski said his party had held out an “olive branch” via a compromise bill, but the GOP had set that bill (and by inference the olive branch) “on fire.”

Sen. Anna MacKinnon (R) assured Wielechowski “there was no olive branch on fire” but still the two parties are deadlocked.

Sen. Pete Kelly (R) said Alaska is faced with “a deficit tsunami.”

Not to make light of olive branches that might or might not be burning, or even a budget tsunami, but this multi-billion dollar debate will seem as inconsequential as deciding who is going to pick up a bar tab compared to the financial problems facing Alaska in the years ahead.

Alaska’s problem in a nutshell is the state is close to completely dependent on the oil industry — a golden goose that experts predict will stop honking in another 50 years.

Gov. Walker tried to tell his Alaskan constituents in January 2015 the end was near.