Economists struggle to calculate impacts of cuts to budget vs. PFD

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While economics is so far from perfect science it’s often referred to as an art, lawmakers are still asking leading state economists to quantify the economic effects of Gov. Michael J. Dunleavy’s budget proposal.

One thing is clear: Filling Alaska’s $1.6 billion budget deficit without new taxes and at the same time paying each Alaskan a Permanent Fund dividend of roughly $3,000 adds up to a net negative for the state’s economy.

University of Alaska Anchorage Institute of Social and Economic Research Economist Mouhcine Guettabi said in testimony to the Senate Finance Committee that the administration’s plan to cut approximately $1.2 billion of state agency and program spending and divert another $440 million in historically local tax revenue to state coffers would extend the current recession and result in a net loss of more than 7,100 jobs statewide.


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