txt

HCR 23: Relating to long range financial planning.

00 HOUSE CONCURRENT RESOLUTION NO. 23                                                                                      
01 Relating to long range financial planning.                                                                              
02 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                               
03  WHEREAS the state has spent more than it has collected in revenue during six of the                                    
04 past nine fiscal years; and                                                                                             
05  WHEREAS the state's fiscal year 1996 fiscal gap between revenue and expenditures                                       
06 is estimated to be $429,000,000; and                                                                                    
07  WHEREAS petroleum revenue currently accounts for about 80 percent of unrestricted                                      
08 general funds and Alaska's petroleum production is projected to decline by one-third during                             
09 the next 10 years; and                                                                                                  
10  WHEREAS the fiscal gap is projected to grow steadily to $1,650,000,000 by fiscal                                       
11 year 2005 if the state does nothing in terms of reducing expenditures or raising revenue; and                           
12  WHEREAS, without changes in projected revenue and expenditures, current reserves                                       
13 in the constitutional budget reserve fund will be depleted by fiscal year 2000; and                                     
14  WHEREAS, in fiscal policy forums held during the past five years, the identified                                       
01 fiscal tools needed to address the fiscal gap include spending reductions, use of liquid                                
02 reserves, tax and fee increases, and use of permanent fund income; and                                                  
03  WHEREAS, in fiscal policy forums held to date, the conclusion has been that neither                                    
04 budget cuts alone nor any single fiscal tool is sufficient to address the fiscal gap, and that all                      
05 tools must be used in combination to bring about state economic stability; and                                          
06  WHEREAS the members of the Long Range Financial Planning Commission (LRFPC)                                            
07 were jointly appointed by the governor and legislature to build upon the work of previous                               
08 fiscal policy studies and the findings of public forums, and were charged with developing 3-,                           
09 5-, and 10-year financial plans for balancing revenue and expenditures; and                                             
10  WHEREAS the financial plan developed by the LRFPC makes the permanent fund                                             
11 the cornerstone of the state's fiscal future through a constitutional amendment establishing the                        
12 permanent fund as an endowment that will continue to grow with additional deposits and                                  
13 retained earnings as well as provide a reliable annual payout to the general fund in order to                           
14 replace declining future oil revenue; and                                                                               
15  WHEREAS the financial plan recommended by the LRFPC contains a combination                                             
16 of spending reductions including reductions in permanent fund dividends, use of permanent                               
17 fund earnings, and revenue increases that will close the fiscal gap by fiscal year 2000 and                             
18 balance revenue with expenditures through fiscal year 2005; and                                                         
19  WHEREAS the LRFPC's plan proposes a constitutional amendment that resolves                                             
20 problems with the existing constitutional budget reserve fund and maintains a $1,500,000,000                            
21 continuing balance to cushion oil price volatility; and                                                                 
22  WHEREAS the combination of fiscal policies recommended by the LRFPC puts the                                           
23 state on firm fiscal ground and strikes a balance between current needs and providing a legacy                          
24 of petroleum wealth to the next generation; and                                                                         
25  WHEREAS the LRFPC recommended fiscal year 1997 actions to narrow the fiscal                                            
26 gap to $387,000,000 that includes general fund spending reductions and increased taxes and                              
27 user fees;                                                                                                              
28  BE IT RESOLVED that the Nineteenth Alaska State Legislature intends to use the                                         
29 recommendations of the Long Range Financial Planning Commission as a starting point in                                  
30 developing the Legislature's fiscal year 1997 budget and long range financial plan; and be it                           
31  FURTHER RESOLVED that the Nineteenth Alaska State Legislature adopts the                                               
01 recommendation of the LRFPC to narrow the fiscal gap in fiscal year 1997 to $387,000,000,                               
02 except that the Legislature reserves the right to change the mix of spending reductions and                             
03 revenue increases; and be it                                                                                            
04  FURTHER RESOLVED that the Nineteenth Alaska State Legislature adopts the                                               
05 recommendation of the LRFPC to close the fiscal gap by fiscal year 2000; and be it                                      
06  FURTHER RESOLVED that the Nineteenth Alaska State Legislature adopts the                                               
07 recommendation of the LRFPC to annually balance state revenue with expenditures from fiscal                             
08 year 2000 through fiscal year 2005, and urges subsequent Alaska State Legislatures to follow                            
09 this recommendation; and be it                                                                                          
10  FURTHER RESOLVED that the Nineteenth Alaska State Legislature adopts the                                               
11 recommendation of the LRFPC that the Legislature and the Governor should report annually                                
12 to the people of the state on actions taken to close the fiscal gap and the effects of those                            
13 actions on the LRFPC's base case projections; and be it                                                                 
14  FURTHER RESOLVED that the Nineteenth Alaska State Legislature urges all                                                
15 Alaskans to learn about Alaska's fiscal situation and to support the actions necessary to close                         
16 the fiscal gap; and be it                                                                                               
17  FURTHER RESOLVED that the Twentieth Alaska State Legislature is urged to create                                        
18 and appoint a successor Long Range Financial Planning Commission in 1998 to assess                                      
19 progress in closing the fiscal gap and to recommend further actions to close the fiscal gap and                         
20 maintain a balanced state budget.                                                                                       
21  COPIES of this resolution shall be sent to the Honorable Tony Knowles, Governor                                        
22 of Alaska; the Honorable Drue Pearce, President of the Senate; the Honorable Gail Phillips,                             
23 Speaker of the House of Representatives; and to the members of the Long Range Financial                                 
24 Planning Commission.