MOODY’S Downgrades Alaska’s Credit Rating:  What next?
July 14, 2017
Dear friends and neighbors,
Moody’s, the credit rating system, downgraded Alaska once again. Their report cites “the large structural imbalance that the state has still not rectified, and the ongoing spending of the state's reserves”, adding that, “as the state's reserves diminish, its options to close the budget gap narrow and the consequences should it fail to do so intensify”.  

In a press release following the news Governor Walker had this to say:  “The agency’s analysts note that Alaska is essentially in the same position as last year: the budget is imbalanced by several billion dollars, and the legislature has not yet adopted a complete fiscal plan to remedy the situation… In spite of significant financial reserves and the lowest tax burden in the nation Alaska continues to operate with a structural budget imbalance that is, according to Moody’s, both unstable and unparalleled by any of the other 49 states. In the last three years, Alaska has gone from the highest credit rating in the nation to the 3rd-lowest, better than only Illinois and New Jersey. We simply cannot afford to wait any longer to take our finances and budget issues seriously.”

Alaska’s economy is struggling. We have the highest unemployment rate in the nation at 6.7%, and a bleak outlook on capital spending and employment in the energy industry. What could remove the negative outlook? Moody’s says, “passage of a plan to close the structural budget imbalance and significant rebound in revenues, bringing revenues closer to expenditures.” The time to act is now for a fiscal plan that closes the budget gap and gets Alaska’s economy back on track. Inaction is causing our state serious harm. Click here if you want to read the reports for yourself.
The 2017 2nd Special Session ends tomorrow

Even if we achieve passage of legislation to end the cashable credits for oil companies tomorrow on the last day of the 2nd Special Session of 2017, we still have no capital budget, no agreement on Permanent Fund dividends and no new revenue.  Failure to act swiftly and firmly will likely result in yet another downgrade, in addition to the lost opportunities for claiming Alaska’s share of federal funding for infrastructure and the associated jobs.   

We’ve said it so often it sounds corny but this is not the time to continuing kicking the can down the road. There is no more road left, and we must stabilize our economy. I think it can happen but every day of delay is excruciating.  

I believe the House Majority Coalition showed great courage in passing a full fiscal plan and I call on the leadership of the Senate Majority to join them. 
I'm Berta and I'm listening,

CONTACT ME
907-269-0174
Sen.Berta.Gardner@akleg.gov

Governor's Office
Gov.Alaska.gov
LtGov.Alaska.gov