On Wednesday in Anchorage, Gov. Bill Walker signed a $10.4 billion state operating budget, a $1.5 billion capital construction and renovation budget, a mental health treatment budget and a bill that includes a plan to spend from the Alaska Permanent Fund for the first time.
Walker vetoed fewer than a handful of projects from the budget, which covers the fiscal year starting July 1. Press releases from the governor’s office and various legislators noted that the budget and accompanying legislation will reduce Alaska’s annual deficit from almost $2.5 billion to $700 million.
What those releases neglect to mention is that this year’s state budget fails to address millions — and likely billions — of dollars in obligations the state must eventually pay. Some of those obligations are due as soon as next year, and some were even incurred in the process of writing this year’s budget. They effectively create a shadow deficit much larger than the one that is apparent on the books.