Analysis lays out weighty deficit impacts

A newly released analysis says options like large cuts in capital budgets, imposing state sales or income taxes or cutting Permanent Fund dividends may not eliminate future deficits.

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by Associated Press

JUNEAU- A newly released analysis says options like large cuts in capital budgets, imposing state sales or income taxes or cutting Permanent Fund dividends may not eliminate future deficits.

The Legislative Finance Division, in its overview of Gov. Sean Parnell's budget plan, says current spending levels are unsustainable without additional revenue, and simply constraining spending growth is insufficient.
Without reserves, the analysis says the budget would have to be reduced by $2.5 billion annually for the state to live within its means.
The analysis made assumptions based on the fall revenue forecast, including no growth in agency and statewide operations after next year and capital budgets set at $800 million in unrestricted general funds annually.
It says state reserves would last to fiscal year 2024 if the forecast and assumptions held.