Government of Alaska Faces Shutdown Amid Budget Delays

Pick ’n Save Closing

Bill Walker Urges Legislators to Compromise on State Budget

Governor Bill Walker is urging Alaska’s legislators to compromise on their budget proposals in order to avoid a government shutdown. The state has warned thousands of its employees about potential layoffs if the legislature fails to finalize Alaska’s budget by July 1.

The state is facing a multi-billion-dollar budget deficit. If the legislators fail to arrive at a mutually agreeable solution to the deficit problem before July, the state’s operations may have to be closed down, which means that many workers would be laid off.

Alaska’s legislative leaders agree that they don’t want a government shutdown. However, disagreements remain on how best to balance the state’s annual budget deficit. The legislators are continuing to stand by their original positions on their budget proposals.

The House, dominated by the Democrats, is proposing an increase in taxes to balance the budget deficit. The Senate, however, has rejected the proposal to increase income taxes. As a result, the House and the Senate are in a stalemate.


Walker has proposed a compromise budget package which, if approved, could slash the state’s budget deficit from the approximate $3.7 billion of last year to only $300.0 million. (Source: Ibid.)

Under the compromise package, wage earnings would be taxed an additional $500.00 annually. In addition, tax credits for oil and gas companies would be slashed. Meanwhile, that compromise package would prevent tax increases on the oil industry.

Walker is now urging the two legislative chambers to come together, join hands, and resolve their disagreements before it’s too late.

The State of Alaska has been facing severe budget deficits since 2013, and has been using its savings from surplus years just to get by in the past few years. So far, the state has drawn $10.0 billion from its savings in order to finance its operations. At the same time, Alaska’s budget has been trimmed down from as high as $7.8 billion in 2013 to about half of that for 2018, at $4.3 billion. (Source: Reuters, op cit.)

Alaska has historically relied on oil as a primary source of revenue. However, with oil prices at multi-year lows, the state is not generating enough funds, and is now left with very little cash to finance its day-to-day operations.


Alaska governor urges budget compromise to avoid state shutdown,” Reuters, June 6, 2017.

The Latest: Edgmon: Governor’s Plan Doesn’t Go Far Enough”, U.S. News & World Report, June 5, 2017.