Chenault: Balance budget with mix of cuts, new revenue

The Alaska Legislative session started today in Juneau. The Senate gaveled in at 11 a.m. and House speaker Mike Chenault started things off for the House at 1 p.m. Lawmakers have a lot of work ahead of them as they attempt to address the state’s massive budget deficit. We’re talking with legislative leaders this week about what they want they want to accomplish this session.

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Speaker of the House Mike Chenault, R-Nikiski, wields the gavel of the second regular session of the 29th Alaska State Legislature on Jan. 19, 2016. Photo: Skip Gray/360North
Speaker of the House Mike Chenault, R-Nikiski, wields the gavel of the second regular session of the 29th Alaska State Legislature on Jan. 19, 2016. Photo: Skip Gray/360North

Chenault says he’s focused on trimming the budget, but doesn’t have a target number for cuts:

CHENAULT: I don’t have an exact number… but we’re in a position we’ve never been in before where our revenue stream dropped 88 percent over a period of a year, year and a half, and I think it’s going to call for drastic measures… not only within the budget itself, but also looking at those revenue streams and deciding which may move Alaska ahead without some of the conflicts that may arise.

TOWNSEND: The governor and his budget team really feel we need to solve the budget problem this year before the state’s savings are depleted. Do you look at this problem the same way or do you think we have more time to figure this out?

CHENAULT: You know I think it’s really important that we address the issue. Whether we do that all in one step this year, or whether we do it all over a couple of years remains to be seen. But I do think it’s an issue we need to address.

TOWNSEND: Are there any income taxes or other taxes that you would consider supporting?

CHENAULT: A lot of that depends on (exactly) what that would be. I would be more apt to probably support a sales tax versus an income tax. But I’m open to looking at each of the taxes the governor’s proposed and determine, ‘Is that best for the state of Alaska, or not?’ or, ‘Is that best for the constituents in my district?’

TOWNSEND: Do you think lawmakers will end up tapping the Permanent Fund earnings this session?

CHENAULT: It’s 50-50 right now — that’d be my guess.

TOWNSEND: If so, how will you sell that to your constituents? What are you hearing from them?

CHENAULT: What I hear from my constituents is that they would like to see a smaller government to begin with. Then they would be open to looking at use of the Permanent Fund, or an income tax, or any of the other revenue-generating proposals. But first they would like to see a smaller, more lean, responsible government.

TOWNSEND: Do you have ideas about where those cuts should come from?

CHENAULT: I think we’re going to have to look at actual programs. There’s nothing out there that should be sacred. Whether that’s education or Medicaid or any other program out there. I can tell you during the Knowles administration we actually went in and took out PCN numbers of employees just to get rid of certain — we ended up having no deputy commissioners, we didn’t have public relations people in every one of the departments… There were a number of things we did to try to trim that budget down. I don’t agree with across-the-board cuts because you may end up running programs that may not be as efficient as they could be. And you end up getting rid of the greater operators… a middle-management person sitting in an office somewhere around the state.

TOWNSEND: Are you concerned with cuts going so deep within state government it might cause the unintended consequence of harming the economy even more since state government drives so much of the economy here?

CHENAULT: I think we have to be concerned about that. Nobody wants to go back to the ’80s when oil prices were $8 a barrel and people were walking out of the house and throwing their keys on the desk of the banker and saying, ‘We can’t make the payments.’ Nobody wants to see that. But also we have to be concerned that if we spend all of our reserves then that lowers the opportunities we have to get out of this thing unscathed. I think we need to be very careful of what we do and how we reduce the budget in order to get to that $3.9 billion deficit number.

House Speaker Mike Chenault is a Republican from Nikiski. Tune in tomorrow for a conversation with House minority leader Chris Tuck.

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Lori Townsend is the News Director for the Alaska Public Radio Network. She got her start in broadcasting at the age of 11 as the park announcer of the fast pitch baseball games in Deer Park, Wisconsin. She has worked in print and broadcast journalism for more than 18 years. She was the co-founder and former Editor of Northern Aspects, a magazine featuring northern Wisconsin writers and artists. She worked for 7 years at tribal station WOJB on the Lac Courte Oreilles Ojibway Reservation in Wisconsin, first as an on-air programmer and special projects producer and eventually News Director. In 1997 she co-hosted a continuing Saturday afternoon public affairs talk program on station KSTP in St. Paul, Minnesota. Radio brought her to Alaska where she worked as a broadcast trainer for Native fellowship students at Koahnic Broadcasting. Following her work there, she helped co-found the non-profit broadcast company Native Voice Communications with veteran Alaskan broadcasters Nellie Moore, D’Anne Hamilton, Len Anderson, Sharon McConnell and Veronica Iya. NVC created the award-winning Independent Native News as well as producing many other documentaries and productions. Townsend was NVC’s technical trainer and assistant producer of INN. Through her freelance work, she has produced news and feature stories nationally and internationally for Independent Native News, National Native News, NPR , Pacifica, Monitor Radio, Radio Netherlands and AIROS. Her print work and interviews have been published in News from Indian Country, Yakama Nation Review and other publications. Ms. Townsend has also worked as a broadcast trainer for the Native American Journalist’s Association and with NPR’s Doug Mitchell and as a freelance editor. Townsend is the recipient of numerous awards for her work from the Alaska Press Club, the Native American Journalists Association and a gold and a silver reel award from the National Federation of Community Broadcasters. Townsend was the recipient of a Fellowship at the Metcalf Institute for Marine and Environmental Reporting in Rhode Island as well as a fellowship at the Knight Digital Media Center in Berkeley. She is an avid reader, a rabid gardener and counts water skiing, training horses, diving and a welding certification among her past and current interests. ltownsend (at) alaskapublic (dot) org  |  907.550.8452 | About Lori