It feels like déjà vu around here...
Dear Friends, Neighbors, and fellow Fairbanksans:
I'm writing you from Juneau again, and it feels like déjà vu – we're here past our 90 day limit again. In many ways I'm not surprised, as we're talking about a lot of major issues this year: restructuring the Permanent Fund, income or sales taxes, reforming our oil tax credits, making significant changes to our Medicaid program, and an overhaul of our crime laws. I hoped we could finish in 90 days, but unfortunately it didn't happen. I am committed to staying as long as it takes to craft a real solution, because we cannot afford to kick the can down the road another year. My goal has always been to support a long term, comprehensive fiscal solution, and I spoke about that at a press conference earlier this month.
One Part of the Solution: We Must Fix Oil Tax Credits
One of the important parts of fixing the budget is to reform our oil tax credits- right now we are paying millions more in credits than we receive in oil revenue. Oil production taxes are expected to be $68 million this year, but the state is on the hook for $775 million in tax credits. It is actually kind of misleading to even call these payments "tax credits", they're more like subsidies, since we are writing millions of dollars in checks to companies with no tax liability. Governor Walker introduced a bill to reform these credits, but the bill got gutted in the committee process and it was pulled by majority leadership from a House floor vote before we could vote on it. I'm still hoping that we can make the bill better for Alaskans, since we shouldn't be subsidizing oil companies at the same time we're considering a cap to the PFD or an income tax.
Still More Work to Do…The University is Hugely Underfunded
Late last week we found out that the conference committee, the final step in the process before the budget hits the floor for a vote, agreed to a $50 million dollar cut to the University system. This is absolutely unacceptable and I won't leave Juneau before we adequately fund the University, even if I have to pitch a tent in the Capitol parking lot. It's critical that we don't cut off support to the parts of our economy that spur innovation, provide jobs and education, and are pillars of our communities like the University. When I found about the potential layoffs that would result from a cut this large, I spoke about it in a floor speech that you can watch here. This is a bad idea that will have drastic impacts in Fairbanks and around the state, and I will do everything I can to oppose this proposed cut.
Legislative Council Votes to Buy Luxurious Building in Anchorage- I say Finish the Engineering Building at UAF Instead
You may have heard that Legislative Council voted to buy the controversial Legislative Information Office in Anchorage. Although I don't serve on that Council, my vote would have been an emphatic "NO!" This building has had such a questionable history that the best thing to do at this point is walk away. It was a very expensive rental and even buying it doesn't seem to save any money over the legislature moving into the state-owned Atwood building. The state is running a huge deficit so we shouldn't be buying expensive buildings in downtown Anchorage. If there's going to be $32 million spent on a new building it should be to finish the unfinished engineering building at UAF.
Hopefully I'll be back in Fairbanks the next time I write to you. As always, please send me any thoughts, ideas, or concerns.