HCR 23: Relating to long range financial planning.
00HOUSE 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.