Anchorage expecting $24M budget shortfall from drop in state funds

Members of the Berkowitz administration discuss budget shortfalls with members of the Anchorage Assembly at City Hall. (Photo: Zachariah Hughes, Alaska Public Media - Anchorage)
Members of the Berkowitz administration discuss budget shortfalls with members of the Anchorage Assembly at City Hall. (Photo: Zachariah Hughes, Alaska Public Media – Anchorage)

The Municipality of Anchorage is anticipating a budget gap of more than $24 million because of diminishing state funding for programs and services. The bleak financial outlook for Alaska’s largest city is likely to be replicated in communities all across the state in the months ahead.

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Mayor Ethan Berkowitz shared the gloomy forecast with members of the Assembly during a work session on the budget Friday. He and members of the administration detailed the loss of state dollars leading to an anticipated drop of $24.22 million from last year’s budget.

Berkowitz said the figure represent a shifting of costs off of state government and onto local municipalities. According to the administration’s figures, the decline is the result of several major changes rooted in state government decisions: A $5 million dip in the state’s community revenue sharing program; a drop of $2 million in PFD garnishments owing to the governor’s veto of paying the dividend’s full value; $14 million less from the board’s halting of a dividend from the electric utility ML&P; and around $4 million in changes to public safety operations and miscellaneous programs, which covers things like snow removal, the cost of housing prisoners, and paying for law enforcement officers.

As a result of delivering on promises to expand the police department and improve IT systems, the administration is likely facing more budget expenses beyond the figure announced. However, officials won’t share additional details until the mayor gives a formal budget presentation to the assembly next week.

Berkowitz said after the meeting that his administration is discussing possible revenue sources to close the multi-million dollar budget gap, but declined to provide specific proposals, saying simply that his job is to bring forward a balanced budget, which he plans to do.