FY2017-04 Expressing A Deep Sense Of Urgency For The Alaska State Legislature1
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Introduced by:
KI B Assembly
Requested by:
Alaska Municipal
League
Drafted by:
Alaska Municipal
League
Introduced on:
07/07/2016
Adopted on:
07/07/2016
KODIAK ISLAND BOROUGH
RESOLUTION NO. FY 2017-04
A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
EXPRESSING A DEEP SENSE OF URGENCY FOR THE ALASKA STATE
LEGISLATURE TO TAKE IMMEDIATE ACTION DURING THE FIFTH
SPECIAL SESSION OF THE 29TH LEGISLATURE TO PASS ALL
NECESSARY FISCAL LEGISLATION REQUIRED TO PROVIDE FOR A FAIR,
BALANCED, AND SUSTAINABLE STATE BUDGET
WHEREAS, Alaska has relied predominantly on the development of its vast oil reserves to
fund the majority of state government expenditures over the past 35 years, yet production of
Alaskan North Slope crude oil has steadily decreased over the past 25 years; and
WHEREAS, global oil prices have dropped significantly over the past two years and are
projected to remain relatively low for the foreseeable future; and
WHEREAS, the combination of reduced oil production, reduced oil prices, and an
overreliance on oil revenue as state government's primary source of funding has resulted in a
massive state fiscal deficit; and
WHEREAS, the State of Alaska's credit rating has dropped due to the current fiscal
imbalance, and will continue to be downgraded, if the Legislature fails to take appropriate action
in 2016; and
WHEREAS, major business leaders in the state have warned they would be unlikely to
continue making significant commercial investments in Alaska if the Legislature fails to address
the fiscal deficit in 2016; and
WHEREAS, Governor Walker has introduced a complete fiscal plan to provide for a
sustainable and predictable balanced budget, using the strength of our existing financial assets,
a balanced blend of spending reductions, and additional new revenues; and
WHEREAS, following adjournment of the 2016 regular session and fourth special session of
the 29t" Legislature, the Legislature failed to enact any component of any fiscal pan, and instead
continued past practice of funding the FY2017 budget from dwindling cash reserves; and
WHEREAS, cash reserves typically used to cover budget deficits are now depleted such that
they are insufficient to cover next year's budget, threatening the state's annual dividend
program and potentially the state's Permanent Fund itself; and
WHEREAS, every dollar of cash reserves spent on one-time budget shortfalls, is then
unavailable to continue working for the state as an ongoing income -producing asset in the
future; and
Kodiak Island Borough Resolution No. FY2017-04
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52
53 WHEREAS, since spending down cash reserves reduces the amount of sustainable revenue
54 we can generate from our financial assets in the future, increases in other sources of revenue
55 (taxes) will become necessary to compensate; and
56
57 WHEREAS, without immediate enactment of a balanced fiscal plan, the Permanent Fund
58 Dividend program will end in approximately four years, and the inevitable dramatic state cost
59 shifts to municipalities will require significant local tax increases, endangering the viability of
60 many Alaskan communities.
61
62 WHEREAS, now more than ever is the time for statesmanship, not provincial politics or
63 electioneering rhetoric. Politically difficult, but financially sound decisions are required
64 immediately.
65
66 NOW, THEREFORE, BE IT RESOLVED BY THE KODIAK ISLAND BOROUGH, that:
67
68 Section 1. The Assembly of the Kodiak Island Borough calls upon the Alaska State
69 Legislature to take affirmative and immediate action during the fifth special
70 session of the 29th Legislature to enact a comprehensive package of initiatives
71 that will provide for a sustainable, balanced state budget for the foreseeable
72 future.
73
74 Section 2. The Assembly of the Kodiak Island Borough appreciates the difficult work of the
75 Administration to put forth one possible comprehensive fiscal solution; and while
76 the Kodiak Island Borough may not support every aspect of this plan, does
77 recognize it as the appropriate foundation for legislative deliberation.
78
79 Section 3. The Assembly of the Kodiak Island Borough insists that the Alaska State
80 Legislature engage in meaningful discussions of all fiscal options without regard
81 to perceived negative political fallout.
82
83 Section 4. The Kodiak Island Borough Clerk is instructed to transmit a copy of this
84 resolution to every member of the Alaska State Legislature, the Governor, and all
85 local media outlets.
86
87 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
88 THIS SEVENTH DAY OF JULY, 2016
89
90 KODIAK ISLAND BOROUGH
91
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93
94 Jerrol Friend, Borough Mayor
95
96 ATT T:
97
98 �-
99
100 N va M. Javier, MMC, Borough C erk
Kodiak Island Borough Resolution No. FY2017-04
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