Alaska is spending more money than it is earning. The state is going to expend about $400 million more than it takes in this next year, even with the governor's veto of $138 million in spending cuts.

Alaska's savings account now has approximately $2 billion remaining. If we do nothing; no income tax, no sales tax, do not cut the budget, our savings account will run out in 2-3 years. Then we could face a budget deficit of around $900 million dollars a year.

As Alice (In Wonderland) asked the Cheshire cat, "Where do we go from here?" The choices for Alaska are clear.

First - Cut the budget

This year the governor cut $138 million in state programs. He should be applauded for his resolve to get Alaska living with in its means. But the impact of the cuts is affecting the way we live. The longevity bonus for seniors is gone. The revenue sharing for cities and boroughs is gone. Almost all of Alaska's capital projects are gone. All of the capital matching grants are gone. The Village Public Safety Officers program is gone in Kodiak.

If you feel your quality of life has not been affected by this years cuts and you want more cuts to state services, you can expect at least another $250 million from the veto pen next year.

Second - Taxes

An income tax or a statewide sales tax will have to be adopted if you want state services to be restored or remain at current levels.

Third - Permanent Fund

If you don't want anymore cuts and you are against taxes, then only one major funding source remains - the Permanent Fund. The fund will have to be restructured to sustain a dividend program into the future and provide needed revenue to the state because of declining oil revenues.

As the Cheshire cat replied to Alice, "The answer depends on where you want to go!"

You, the citizens of Alaska need to let the governor and your legislators know what you want. Do we keep cutting the budget, institute some form of statewide tax or use a part of the Permanent Fund? The choice is yours.

To give you an opportunity to let Senator Gary Stevens and myself know where you stand, I have asked the House Ways and Means Committee to conduct one of their hearings on this decision in Kodiak. They have indicated that they will come to Kodiak in late September or early October. I hope you will take the time to tell us what path we should follow.

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