Rep. Harriet Drummond

By Representative Harriet Drummond (D-Anchorage) on behalf of the Alaska Independent Democratic Coalition

The members of the 29th Alaska Legislature will face some very big decisions when the unprecedented Fifth Special Session gets underway July 11. Never before in Alaska’s history has a Legislature needed five Special Sessions to get its work done but there is always a first time for everything. I and my colleagues in the Alaska Independent Democratic Coalition are in the minority in the Alaska Legislature, which means that we do not control the agenda and can really only debate and consider what the Governor and the Majority present to us. However, let me assure you that we stand ready, willing, and able to help solve the ongoing fiscal crisis that is threatening our economy and our institutions of government.  

The cause of the fiscal crisis is easy to identify. The sudden drop in the price of oil and Alaska’s flawed oil tax structure has resulted in a scenario where our oil tax revenue is far less than the cost of doing business as a state. While the cause of the fiscal crisis is easy to see, solutions are tougher.  

Governor Walker and some lawmakers are supporting a fundamental change in how we pay for state government and the services it provides. Instead of using revenue from oil, they want to tap into the earnings from the Alaska Permanent Fund and use just over five percent of the fund’s value every year to pay our bills. To make the plan work, the size of Permanent Fund Dividends would be capped at about half of what they are projected to be this year. The proposal seems to make sense because it establishes some fiscal certainty for Alaskans.  However, this proposal, which I call the “Permanent Fund Only” plan, is unfair and incomplete. It balances our budget on the backs of poor and working Alaskans.

Such a plan hits only full-time Alaskans and would unfairly tax, for example, a five year old child in Kotzebue at the same rate as the wealthiest Alaskan. This plan grabs a much larger share of the income of poor Alaskans than the rich.    

If our fiscal crisis is such that the Permanent Fund proposal must be put into place, then lawmakers and the Governor must step up to the real task of crafting a sustainable fiscal policy and eliminate unfairness and inequity.

We in the Alaska Independent Democratic Coalition in the Alaska House of Representatives are fighting for a fairer and more comprehensive fiscal plan. This is why the “Permanent Fund Only” plan has not yet passed and why it will not pass.  Alaskans rightly demand that the burden of addressing our fiscal crisis be more evenly shared by all participants in the broader economy. 

The upcoming Fifth Special Session will be a failure if all that is seriously considered is a “Permanent Fund Only” plan. Success hinges on whether or not consensus can be reached on a comprehensive fiscal plan that is fair. The Republican-led Majority seems to forget that they have a fiduciary duty to the shareholders of the Owner State. They seem more interested in achieving fiscal certainty for our oil industry partners then they are for the people of Alaska.

Rest assured that the Alaska Independent Democratic Coalition has got your back, Alaska. 

Published July 9, 2016 by ADN