For the last four months, the bipartisan group of lawmakers in the new Majority Coalition in the Alaska House of Representatives have worked on a responsible solution to Alaska’s fiscal crisis. The ongoing crisis has stymied investment and perpetuated a recession that threatens jobs, large and small businesses, public safety, and the education of our children. In crafting our plan, we consulted experts, heard from Alaskans, and have refused to shrink from political risks.
Unfortunately, our deeply vetted and well-balanced plan has been the focus of incessant and simplistic attack from the leadership of the Senate Majority, which is the same group that has held power before, during, and after the sudden drop in oil prices that prompted the current state of affairs. The Alaska House Majority Coalition is trying to fix the problems that emerged under the Senate Majority’s watch, not the other way around.
The budget shortfalls of the last few years are unsustainable and the economic well-being of the entire state is at risk. Just a few years ago, revenue from Alaska’s abundant oil resources paid upwards of 90 percent of the costs of state government. Now it’s only paying for about a third. Many experts believe that oil prices will remain low well into the future. These factors should have pushed the Alaska Legislature into action. Instead of action, we got continued dysfunction and inaction. That’s why Republicans, Independents, and Democrats came together to form the Alaska House Majority Coalition. The members of the Coalition recognize the risks of continued complacency, which is why we put aside politics in favor of solutions by passing a comprehensive fiscal plan over to the Senate.
The rhetoric coming from the leadership of the Senate Majority is that state government is too big. It’s not and they know it. We have cut the budget by 44 percent in the past few years and this year the Senate Majority could only find $185 million in proposed cuts.
Over $30 million of those cuts are fake and will come back in next year’s supplemental budget. Other cuts are fund source switches that attempt to hide spending while claiming cuts. Of the actual reductions proposed by the Senate, the largest two are an unacceptable 5.7 percent ($69 million) cut to public education, which has resulted in students in several communities staging protest walkouts, and a $22 million cut to the University of Alaska, which university officials have labeled as devastating.
I think the leadership of the Senate Majority is using public education as a bargaining chip to get what they have always wanted, a dividend reduction-only plan that gives them the ability to use the earnings of the Alaska Permanent Fund to pay for government and reduce the need for revenue from the oil industry. Their plan cuts Permanent Fund Dividends in half and is based on optimistic projections that will force them to quickly come for the other half of your dividend. The Senate’s plan is also unfair because only Alaskans get PFDs and only those who get PFDs will be asked to contribute. Outsiders, tourists, and those who use our resources but don’t live here won’t be asked to contribute a cent to filling the $2.7 billion budget gap and stabilizing our economy.
It gets even worse. By only using the most regressive tool in the toolbox, the Senate Majority is asking every Alaskan, including fixed income seniors and every child, to contribute just as much as oil industry executives. It isn’t fair to hard-working, middle class Alaskans to tax the janitor who cleans the bathrooms the same amount as the person in the corner office of those big glass high-rises in Anchorage. If you make $25,000 a year and live a subsistence lifestyle they will take just as much as they will from the lobbyists pulling down more than a million dollars a year to roam the halls of the Capitol Building.
The plan put forward by the Alaska House Majority Coalition asks everyone to contribute, including the oil industry, the wealthy, and the politically well-connected, and the less fortunate. Our plan puts an end to years of instability and provides for a state government that can afford public safety, the education of our children, maintaining pioneer homes, and other important services.
As the Alaska Legislature heads into a special session, who do you trust? The same old group of Senators – who have been in power for years – spouting the same tired political rhetoric, or the group of lawmakers who came together across party lines and made tough political choices to create hope for Alaska’s fiscal future. Right now Alaska needs solutions, not more politics.
