Juneau -- The Senate Finance Committee today held a hearing on goals for developing a long-term balanced budget plan to address the state's $1.2 billion fiscal gap.

"In order to successfully build a long-term balanced budget, the legislature and the administration must first agree on ground rules," said Senate Finance Co-Chair Senator Sean Parnell (R-Anchorage). "We need to create and evaluate plans with realistic assumptions about income, expenses and Alaskans' vision of what our state will look like in 20 years."

Phil Okeson, a fiscal analyst for legislative finance recommended the committee identify potential goals and criteria for judging a plan. Assumptions include agreeing on the rate of inflation, population growth, returns on investments, and the price and production levels of oil. Goals of any balanced budget plan, according to Okeson, include sustainability, stability, predictability, the ability to fund Permanent Fund Dividends and the ability to fund the deficit.

Parnell noted that the legislative finance model used in today's presentation demonstrated that the price of oil isn't going to solve the state's budget situation.

"Even if you assume the price of oil will go up to $34 a barrel and stay there-clearly a pipe dream-Alaska's fiscal gap reappears within five years," said Senator Parnell. If expenses are not cut and we try to maintain the status quo-inflation, decline in oil production and population growth will make our budget gap even harder to solve."

"The biggest message today is we must act now to solve the state's fiscal problem," said Senator John Torgerson (R-Kasilof), Co-Chair of the Senate Finance Committee. "A dollar saved is a dollar earned. The more money we can retain in our savings accounts through budget cuts and wise use of our state's assets will give us more flexibility in making financial decisions in the future.

Senate Republicans have announced their target to reduce state spending this year by $300 million. They will also search for additional savings through privatization and consolidation of state programs and services.

Broadcasters note: Audio comments are available on the Majority Actuality line, 1-800-478-6540
= John Torgerson, 27 K = Sean Parnell, 41 K

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