HomeMy WebLinkAboutResolution No. 2016-35XJtV qVV( Q
Sponsored by: Councilor
theaYyof CITY OF KENAI
KENAI.ALASKA RESOLUTION NO. 2016 -35
11
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, XPRESSING A
DEEP SENSE OF URGENCY FOR THE ALASKA STATE LEGISL URE TO TAKE
IMMEDIATE ACTION DURING THE FIFTH SPECIAL SESSI OF THE 29TH
LEGISLATURE TO PASS ALL NECESSARY FISCAL LEGISLAT N REQUIRED TO
PROVIDE FOR A FAIR, BALANCED, AND SUSTAINABLE STATE UDGET
WHEREAS, Alaska has relied predominantly on the develop nt of its vast oil reserves
to fund the majority of state government expenditures o r the past 35 years, yet
production of Alaskan North Slope crude oil has steadily ALASKA
over the past 25
years; and
WHEREAS, global oil prices have dropped significantV over the past two years and are
projected to remain relatively low for the foreseeabl ture; and
WHEREAS, the combination of reduced oil pr duction, reduced oil prices, and an
overreliance on oil revenue as state gove ent's primary source of funding has
resulted in a massive state fiscal deficit; and
WHEREAS, the State of Alaska's credit ry&ng has dropped due to the current fiscal
imbalance, and will continue /be wngraded, if the Legislature fails to take
appropriate action in 2016; and
WHEREAS, major business leade state have warned they would be unlikely to
continue making significant corn nvestments in Alaska if the Legislature fails
to address the fiscal deficit in 20
WHEREAS, Governor Walker as introduced a complete fiscal plan to provide for a
sustainable and predictabl balanced budget, using the strength of our existing
financial assets, a balan d blend of spending reductions, and additional new
revenues; and
WHEREAS, following journment of the 2016 regular session and fourth special
session of the 29th Le 'slature, the Legislature failed to enact any component of any
fiscal pan, and inst d continued past practice of funding the FY2017 budget from
dwindling cash re rves; and
WHEREAS, c sh reserves typically used to cover budget deficits are now depleted such
that they a insufficient to cover next year's budget, threatening the state's annual
dividendArograrn and potentially the state's Permanent Fund itself; and
tE AS, every dollar of cash reserves spent on one -time budget shortfalls, is then
ailable to continue working for the state as an ongoing income- producing asset in
future; and
Resolution No. 2016 -35
Page 2 of 2
WHEREAS, since spending down cash reserves reduces the amount of sustainable
revenue we can generate from our financial assets in the future, increases in other
sources of revenue (taxes) will become necessary to compensate; and
WHEREAS, without immediate enactment of a balanced fiscal plan, the Permanent
Fund Dividend program will end in approximately four years, and the inevitable
dramatic state cost shifts to municipalities will require significant local tax increases,
endangering the viability of many Alaskan communities.
WHEREAS, now more than ever is the time for statesmanship, not provincial politics
or electioneering rhetoric. Politically difficult, but financially sound decisions are
required immediately.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA:
Section 1. The Council of the City of Kenai calls upon the Alaska State Legislature
to take affirmative and immediate action during the fifth special session of the 29th
Legislature to enact a comprehensive package of initiatives that will provide for a
sustainable, balanced state budget for the foreseeable future.
Section 2. The Council of the City of Kenai appreciates the difficult work of the
Administration to put forth one possible comprehensive fiscal solution; and while the
City of Kenai may not support every aspect of this plan, does recognize it as the
appropriate foundation for legislative deliberation.
Section 3. The Council of the City of Kenai insists that the Alaska State Legislature
engage in meaningful discussions of all fiscal options without regard to perceived
negative political fallout.
Section 4. The Kenai City Clerk is instructed to transmit a copy of this resolution to
every member of the Alaska State Legislature, the Governor, and all local media
outlets.
Section 5. That this Resolution shall become effective immediately upon its adoption.
ADOPTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of July
2016.
PAT PORTER, MAYOR
ATTEST:
Sandra Modigh, CMC
City Clerk