A new constitutional spending limit key to Alaska’s fiscal stability

In 1982, Alaska’s voters demonstrated their wisdom by approving our current constitutional spending limit (Article IX, Section 16). That amendment was prompted by the brave leadership of Gov. Jay Hammond. When he was confronted with a bloated capital budget from the Legislature, he used the threat of his veto pen to move the Legislature to adopt that amendment for approval of Alaska’s voters.

The current limit was approved by Alaska voters by a 60-40 margin. I suspect Alaskans would approve a revised version by similar margins. The reason we need to revise the current spending limit is because hindsight truly is 20/20. The intention was honorable. However, given that Alaska was only 23 years old at the time of adoption, we now have 38 years of budgetary history to offer us greater clarity, and significant enhancements in technology and economic modeling have improved our analytical capabilities, it is understandable that the current limit never achieved its laudable goals. The unfortunate reality is the 1982 spending limit has never limited spending.

I view a revised constitutional spending limit as contract with Alaskans for fiscal discipline. Indeed, our state is maturing and finding its way in a global economy. We are faced with some very challenging and unpleasant decisions. Before asking Alaskans to consider a change to the historical permanent fund dividend formula or some type of broad-based tax, we must adopt a constitutional spending limit that restrains spending.

If the last three years have shown us anything, they have proven that any legislative majority can pick and choose which statutes it follows. This is unacceptable. Updating our current constitutional spending limit is the only way to require the Legislature to adopt budgets that are truly consistent with revenue streams.

In 2017, then-Sen. Dunleavy introduced a version of a revised constitutional spending limit, and I offered a different approach. He and I worked closely and regularly conferred on these measures. We didn’t see them as “competing” but rather offering different approaches; each with their respective merits. Gov. Dunleavy has once again proposed a new constitutional spending limit as a cornerstone of his fiscal plan. It will be a wasted opportunity if we adjourn this session without at least starting a robust discussion on the elements of that spending limit and how they can be improved upon.

In the upcoming election cycle, Alaska’s voters will hear a wide range of positions from legislative candidates. If a candidate states support for a “spending limit,” it is imperative to press them for details. You must ask if they support a change to the existing constitutional spending limit or if they believe a statutory spending limit is enough. Even if they support a constitutional change, you need to ask what types/categories of spending they would include under such a limit. Bottom line: A constitutional spending limit that actually restrains spending is the only way to restore fiscal sanity in Juneau. Don’t be confused by clever double-speak.

We have too much at stake to make the wrong decision, or worse yet — no decision at all.

Rep. Cathy Tilton represents House District 12, which includes the communities of the Butte, Chugiak, Fairview Loop, Eklutna and Peters Creek. She is the ranking member of the Finance Committee for the House Republican Caucus.

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