KMXT 100.1 FM Public Radio in Kodiak, Alaska
With the legislative session quickly approaching, Kodiak’s governing bodies are trying to get the best picture possible for what things might look like in Juneau this year. On Monday night, the City Council heard from its lobbyist, Ray Gillespie, about what’s forecasted for the upcoming session.
Gillespie said times are tough, and the biggest issue will likely be how to fund public services statewide.
“When the legislature adjourned last April, their forecast average price per barrel of oil was $105 per barrel. Even at that price they had to authorize a withdrawl form our savings account of $1.4 billion. That’s at $105 per barrel.”
Gillespie said the price per barrel on Monday was just over $79 per barrel.
“What that does is almost doubles that draw that we’re going to have to make from our savings. So if our average price goes to $95 per barrel, we’re going to draw $2.2 billion out of our savings. If it’s at $85 we’re going to draw $2.9 billion out of savings. That’s a huge some of money.”
He said that is just for last year. If you combine it with the current fiscal year, plus the budget the legislature will be working on during the session, it’s possible the state could spend half of its savings within the next year and a half.
“That’s $6 billion, we have about $11.5 to $12 billion in our various savings accounts. So the situation is beyond critical.”
Needless to say, Gillespie said the incoming legislature will be looking at what to do and likely be making every attempt to decrease expenses.
On the positive side, Gillespie said he was fairly optimistic that there would still be a capital budget.
“Legislators do that as a way of creating jobs and sustaining an economy. It won’t be a big one, so all of us are going to need to lower our expectations a bit.”
He said full funding for projects might not be in the cards, so Kodiak should consider phasing out projects to smaller dollar amounts and increase the odds for funding.
Gillespie said the city should also brace itself for the legislature trying to shift more and more of the state’s budget items onto local governments.
