Business, community leaders worry about job losses
Business groups are increasingly concerned about the extended deadlock in Juneau as the Legislature and Gov. Mike Dunleavy grapple with the state budget, particularly the capital, or construction, budget that provides state matching money for almost a billion dollars of federal transportation funds. Economists are also warning that sharp budget reductions extracted through $400-million-plus in budget vetoes by the governor could result in about 4,000 jobs losses, ending a fragile recovery of the state’s economy from a three-year recession. In a significant move, Moody’s Investor Services downgraded the rating of State of Alaska debt from “stable” to “negative” because of the political turmoil. Legislators are now midway through a special session, which ends in early August. If issues aren’t resolved there may be another special session as the dispute continues. Dunleavy is holding out for a $3,000 Permanent Fund Dividend he promised voters in his campaign last year, and essentially cut the budget to pay for this. Legislators want a smaller PFD of $1,300 to $1,600 and, for the cuts to be partly restored. Twenty prominent business leaders and several business associations have asked the governor to restore at least some of the hefty budget cuts. Dunleavy seems to have hardened his position, however.