Alaska budget analysis adjusted for inflation shows overall agency spending down
Author: Bert Stedman
One of our major presentations last week looked at some important modeling of budget history and agency budget history over the past 20 years. When people think “cut the budget” they normally are talking about agency budget operations. The nonpartisan Legislative Finance department compared agency budgets from 2005, using unrestricted general funds adjusted for inflation. This analysis highlighted that many of the proposed budgets for these agencies in the governor’s 2022 budget bill have been reduced back down to levels from 10 or more years ago. Here are some highlights from that inflation adjusted chart:
The governor’s 2022 budget for the Departments of Commerce, Labor, Natural Resources, Transportation and the University are all back down to their 2005 levels or lower.
$661.2 million of UGF budget reductions were made from FY15-18, with every agency’s budget going down. There have been over $140 million in cuts to the University budget since 2015 and $83 million in cuts to the Alaska Marine Highway system, but these large cuts have produced no net reductions in the overall budget.
The cuts were offset by large increases in the Department of Corrections budget, which is the highest it has been since 2005, increasing by $127 million since 2005. The Judiciary budget has also increased from $77 million in 2005 to $108 million in the governor’s 2022 budget. In addition, our retirement liability payments have been rising each year. Since 2018, they have increased by over 100% and in 2022 will cost the state around $340 million.
Since FY18, reductions in some areas have balanced out increases elsewhere, indicating we might be at the “floor” for our current government structure. Major legislation changing statutes would be needed to make further significant reductions.
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