Yes, it’s true. In Alaska:
The Alaska House on Thursday passed a $9.5 billion state operating budget. The 32-5 early evening vote came after hours of debate, split over two floor sessions. The dissenting votes came from minority Democrats, including Rep. Mike Doogan, who said the budget is too fat.
This is the General Fund budget. It was $5.6 billion in 2010 and an estimated $8.9 billion in 2011 – a 59-percent expansion of the General Fund in one year. General Fund appropriations for 2012 amount to $9 billion. Total state spending in Alaska in 2010 and 2011 were $9.76 billion and an estimated $13.9 billion, respectively. This is a 42 percent increase.
Unlike virtually every other state, Alaska has not increased its dependency on federal funds during the recession. Uncle Sam’s gravy train has delivered roughly $3 billion per year yo Juneau over the past three years. Since federal money has been behind the expansion in state spending everywhere else, you would have expected lawmakers in The Last Frontier to show some fiscal fortitude and keep state spending flat. Obviously, that was not the case.
Alaska, of course, has a somewhat unique revenue situation. In 2010 the state got 74.3 percent of its General Fund revenue from severance taxes, which is far higher than in any other state (North Dakota is a distant second with 43 percent). This explains the spending spree in Juneau: oil prices have shot up dramatically over the past four years, and with them severance tax revenues. But this also shows the tragic short-sightedness of the Alaska state legislature: the long-term oil production trend in Alaska is negative, and the spike in prices over the last couple of years will soon taper off or turn downward. When that time comes, they will be standing there with their entitlement programs in the wind. As the Anchorage Daily News story explains, those are the big beneficiaries of the spending spree:
Agencies with the biggest budgets are health and social services, education, the University of Alaska system and transportation. The administration has blamed budget increases over the last several years, in large part, on formula-driven programs, like education and Medicaid. The bill restores funds for a pre-kindergarten program; cuts made in subcommittee to pre-kindergarten and teacher mentoring programs raised concerns about whether those cuts would result in a violation of an agreement to settle a lawsuit over education quality.
The Republican spendoholics in Juneau better repent, and repent soon. Even Alaska cannot escape paying the price for the big, bloated, prosperity-killing welfare state.