Wilken Offers Bill to Bridge Future Revenue Gaps
SB 134 provides a guideline to deal with shortfalls

Juneau - Future legislatures would have a guide for how to fill general fund revenue shortfalls under a bill introduced Wednesday by Sen. Gary Wilken, R-Fairbanks.

“We have an impending shortfall and we need to be prepared for it,” Sen. Wilken said. “Everyone talks about a long-term fiscal plan. SB 134 outlines a responsible way to bridge the gap until the day when a gas pipeline begins to fill State coffers.”

Senate Bill 134 adds a policy statement to the Executive Budget Act that money needed to cover projected shortfalls in general funds be appropriated equally from the constitutional budget reserve fund and the permanent fund earnings reserve account.

Although the state is currently enjoying a budget surplus, the State’s Legislative Finance division estimates the State could be back in a deficit by 2009. Under SB 134, half the deficit would be appropriated from the permanent fund earnings reserve account, estimated at $4.7 billion as of January 31, 2007, and half would come from the $2.6 billion constitutional budget reserve.

It is important to note that the permanent fund earnings reserve fund, which can be accessed with a simple majority vote of the legislature, is separate and distinct from the principal of the permanent fund, which stands at $32.1 billion and is constitutionally protected. Using the earnings reserve fund would allow all Alaskan residents to share in the “power of earnings” from a fund that grows every minute, every hour of every day.

Permanent fund corporation officials estimate that a draw of $250 million from the earnings reserve account every year for 10 years would reduce the permanent fund dividend by only $20 per person in 2011 and $89 per person in 2016, an impact that could be far less than a sales or income tax.

A Fact Sheet for SB 134 is attached.
http://www.aksenateminority.com/pdfs/25/sb0134.pdf
A sound actuality can be downloaded from the following link:
http://www.aksenateminority.com/media/25/wilken2007032201a.mp3
A slide show presentation can be downloaded from the following link:
http://www.aksenateminority.com/pdfs/25/sb0134_attachment_002.pdf