Fields: “All revenue possibilities need to be on the table and all costs of state government need to be reviewed.”
Commentary By Duncan Fields
For The Cordova Times
Alaska is suffering from economic gangrene. We’ve got to restore the blood flow to our budget, or we face amputation, possibly worse. The State Government’s disease is “overspending”, and has spread rapidly — pulling over $7.5 billion from our reserves in the past two years. Most Alaskans realize our state’s cash emergency is life threatening. I’m running for the State House seat representing District 32 (Kodiak, Cordova and Yakutat) to help the Governor and other legislators get past their inaction and cure the disease before an economic amputation.
Here’s part of my plan to restore health to our diseased economy.
Alaska’s path to recovery is relatively simple: increase revenue while keeping costs of state government at or below current levels. All revenue possibilities need to be on the table and all costs of state government need to be reviewed.
The state must create about $3.5 billion in new revenue to balance the budget. I like the approach of marrying the use of permanent fund earnings to expected oil revenues; with more oil revenue, less money is used from the permanent fund earnings.
Nevertheless, the Governor’s initial draw from the Permanent Fund earnings is too large ($1.9-2.0 billion leaving a dividend of about $1,000.) and disproportionate to other revenue possibilities. This action particularly harms rural, low income and fixed income Alaskans.
The state’s portion of Permanent fund earnings should provide about half of our operating budget gap or $1.6 -1.7 billion, and the rest of that gap can be balanced with a small personal income tax. An income tax captures non-resident earners, particularly in the oil and fishing industries, who currently make money off of Alaska’s resources and pay very little in return. An income tax of between 1-2 percent should generate above $1 billion in state revenue. Any income tax should also be married to expected oil revenues. This balance treats both low income and higher income Alaskans equitably and limits permanent fund and tax revenue to what is needed.
In addition, Alaska’s oil industry must contribute more toward a balanced budget through a combination of revised tax rates and reduced tax credits. Current oil revenue is about $1.2 billion annually. Reducing tax credits and drilling incentives could lower the State deficit by as much as $700 million.
What about State spending? Cuts in State government spending have been about 15 percent over the past two years. I think we can find more cost savings. However, given our urban-focused legislature, it’s likely that additional cuts will result in reduced ferry service, Fish& Game budget reductions, underfunding State troopers and Village Public Safety officers and, perhaps, reducing education-funding support for local school districts. Given this reality, I’d much rather focus on the revenue side and keep these essential services funded at current levels in Cordova and the rest of House District 32.
I’m Duncan Fields and I’m asking for your vote. I’m a lifelong commercial salmon fisherman and I just completed nine years of service on the North Pacific Fisheries Management Council. I’m currently the President of the Kodiak Board of Education and have been involved with school boards for 20 years as my six children have moved through the schools. For 25 years, when not fishing, I’ve advocated for fisheries opportunities for rural residents. I worked for seven years as plaintiff’s attorney on the Exxon Valdez litigation. I have the experience and the temperament, to not only make hard budget choices, but also to insure the budget changes are fair to our smaller communities. Don’t get stuck with the status quo “Do Nothing” legislature. Vote for me and let’s tackle these problems together.
