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August 19, 2019
A Partial PFD and a 3rd Special Session
Alaskans from Barrow to Ketchikan have been waiting to see what Governor Dunleavy would do with the partial Permanent Fund Dividend payment approved by the Alaska Legislature. The Governor announced today that he would allow the $1,600 payment to go forward. However, the Governor intends to call a 3rd Special Session for the fall where lawmakers will consider a bill paying out the remaining $1,400 to equal the PFD amount set out in state law.
I support paying the PFD according to the statutory formula for two big reasons. First, reducing the PFD is a regressive tax that only impacts Alaskans while leaving non-residents and visitors off the hook in helping to fill the fiscal gap. Secondly, it’s the law. The Alaska Legislature can change the law, but until then I will vote to follow the law.
More Budget Vetoes While Some Important Items Sparred
For the past couple of weeks, I have been encouraging Governor Dunleavy to sign House Bill 2001 without additional significant vetoes. I was concerned that more vetoes would further destabilize our economy because of convincing research from the University of Alaska’s Institute of Social and Economic Research showing state government spending cuts are the most economically damaging way to close the state’s budget gap. Unfortunately, the Governor issued 71 line-item vetoes totaling $222 million. I am especially concerned about cuts to Medicaid and adult dental services. These cuts will negatively impact healthcare access for thousands of low-income Alaskans and force more of our friends and neighbors into using emergency rooms for healthcare.
71 line-item vetoes = $220 million
Thanks for Coming to My Town Hall
Earlier this month, I held a town hall meeting on a warm and sunny Saturday afternoon. There was a great turnout despite the fabulous weather. A big thanks to all of you who turned out with questions and concerns. Your input is vital to helping me make the right decisions for the residents of District 23.
Oil Tax Credits Eat Away at Alaska’s Fair Share
The fiscal challenges facing the State of Alaska are so large and challenging that solutions have not been easy to find. I’m convinced that solutions will elude us all as long we ignore the elephant in the room. That elephant, of course, is Alaska’s disastrous oil tax regime that short-changes the people for broken promises of millions of barrels of new oil. As we are all aware, it didn’t turn out as foretold. In fiscal year 2019, which just wrapped up in June, the daily average oil production on the North Slope didn’t go up; it went down by 13,957 barrels per day.
Figure 2: A comparison of North Slope oil production courtesy of the King Economics Group.
Right now, our tax system subsidizes the oil industry through lost tax revenue. A provision tucked into Senate Bill 21 put in place a sliding tax credit tied to the price of a barrel of oil. At current prices, the North Slope oil companies deduct $8.00 off the top. This so-called tax credit is entirely different than the $740 million in cashable tax credits we still owe the oil industry, and it’s in addition to the $3.7 billion the state has paid out in cashable tax credits since 2007. I think it’s time for the Governor and every lawmaker to do the hard work to develop a tax system that is both fair to the oil industry and the people of Alaska.
Developing a tax regime that is fair to the state and the oil industry while also durable at different oil prices may be a difficult task, but we can start small. Senator Wielechowski’s Senate Bill 14 would be the perfect vehicle for reform because it starts with repealing the unaffordable per-barrel oil tax credit, which is costing Alaska about $1.2 billion a year in lost revenue at current prices. The only way to overcome Alaska’s fiscal challenges is for everyone and every part of the economy to contribute to solutions. Senate Bill 14 is a good start to ensuring the oil industry contributes in equal measure to the people of Alaska who are being asked to give up real money in the form of reduced PFDs.
Congratulations on the Award
Every day I rely on the hard work of a dedicated staffer to better serve you. Aurora Hauke has been with my office for four Legislatures. Before that, she worked for Representative Beth Kerttula from Juneau. Aurora knows more about the Alaska Legislature than I will ever know, and she cares deeply about the legislature as an institution to serve the people of Alaska. I was thrilled to learn that Aurora was recently honored with the “Legislative Staff Achievement Award” at the National Conference of State Legislatures annual legislative summit in Nashville. Congratulations on the award Aurora, you deserve it.
Plastic Bag Ban Begins Next Month in Anchorage
Retailers in Anchorage will no longer be providing plastic bags to Anchorage shoppers starting September 15. Instead of plastic bags, retailers will be using non-plastic alternatives like paper bags that will cost at least 10 cents per bag. The easiest way to be environmentally aware and save money at the same time is to bring your shopping bag from home. I’m going to find a couple of canvas bags and toss them in the truck, so I’m ready for next month.
I’m here for you, so please keep in touch on matters important to you and your family!
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