Juneau, Alaska – Governor Sarah Palin submitted a package of FY2010 budget amendments to legislators today that reduces general fund spending by $445.5 million.
The Department of Revenue also issued a February 2009 interim forecast today based on an FY2010 average price per barrel of $57.78 and estimates revenues of $3.18 billion, which is down $2.1 billion from the fall forecast based on an average of $74.41 per barrel.
“Given current market conditions and oil prices, we have made reductions in the proposed spending plan for next year,” Governor Palin said. “We are continuing our efforts to provide important public services, while cutting back on areas that can certainly wait until we see improvement in our revenue stream.
“Even with the drop in oil prices, our goal is to continue to provide needed public services, and to keep Alaskans employed and the economy moving. We have proposed responsible reductions in the current year and also in the FY2010 budget. These changes will reduce the draw on reserves needed at the end of the fiscal year.”
The operating budget is reduced by $382.3 million in general funds. Significant operating reductions include $166.5 million for the additional payment against the unfunded liability for public employee (PERS) and teachers (TRS) retirement systems. There is $284.7 million remaining in the budget to fully fund the state’s obligations to public employers and school districts, and leave PERS and TRS employer rates unchanged. Also, there is a $100 million reduction in authorization to pay exploration tax credits to mirror the funding authorization requested in the current year. A $73.5 million general fund reduction is proposed and is also offset by the new federal reimbursement rate for Medicaid under the economic stimulus package. These funds are made available to states specifically to provide relief from state revenue shortfalls and also to prevent states from eliminating care to people in need.
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