NEWS: House Ends Historic Fifth Special Session Without Progress on a Comprehensive Fiscal Plan

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The Alaska Independent Democratic Coalition is Committed to Crafting a Fiscal Plan that Does Not Unfairly Burden Alaskans in Favor of Big Oil and Other Special Interests

July 15, 2016

Juneau – Today, the Alaska House of Representatives adjourned the Fifth Special Session of the 29th Alaska Legislature.  Lawmakers were unable to reach consensus on the components of the fiscal plan proposed by Alaska Governor Bill Walker. Despite the setback, the members of the Alaska Independent Democratic Coalition (AIDC) remain committed to finding acceptable solutions to close the budget gap that can garner approval from the Governor, the Alaska Legislature, and the people of Alaska.

“Governor Walker put forward a plan for lawmakers to consider. Unfortunately, the plan was called regressive by the Rasmuson Foundation. That plan should have been used as a starting point for a balanced and comprehensive fiscal plan that is fair to all Alaskans,” said AIDC Leader Rep. Chris Tuck. “This fiscal crisis was years in the making so it’s not surprising that finding solutions will take some time. The members of the Coalition are not giving up and will continue working with the Governor and all lawmakers to create a bipartisan fiscal plan that is fair, protects our economy, and that all Alaskans can be proud of.”

The low price of oil and a flawed tax policy has resulted in a dramatic loss of revenue to the State of Alaska while spending is largely unchanged from a decade ago. Thanks to the forethought of many lawmakers, billions of dollars were put in savings when oil prices were high. That will allow the essential functions of state government to continue while lawmakers and the Governor work on fiscal solutions.

“Our Coalition wants a sustainable path to fiscal stability. Oil prices cannot be expected to rebound in the near future, which means all of the components of the Governor’s plan need to remain on the table,” said AIDC Whip Rep. Sam Kito (D-Juneau). “The seriousness of our fiscal challenges demands that all lawmakers work on ending the current stalemate and stop playing politics with Alaska’s future.”

Governor Walker’s agenda for the Fifth Special Session featured six pieces of legislation, including House Bill 5001 to cap the size of Permanent Fund Dividends and use billions of dollars every year from the earnings of the Alaska Permanent Fund to pay for a large portion of state government. Use of Permanent Fund earnings is a top priority for Governor Walker, which resulted in his decision to veto over $695 million from the money used to pay for this year’s dividends. The Governor’s actions will limit dividends to $1,000 this year.  

“Using the earnings of the Permanent Fund to pay for state government should be the last component of a fiscal plan but it turned into the first, and to some degree, the only component of a fiscal plan seriously considered over the last six months,” said AIDC Floor Leader Rep. Geran Tarr (D-Anchorage).  “A Permanent-Fund-only plan is not a comprehensive fiscal plan because it unfairly places all of the burden of responding to our fiscal challenges on the backs of full-time Alaskans while letting out-of-state workers and others who make money in Alaska off the hook completely.”

The low price of oil in conjunction with Alaska’s flawed oil tax structure has resulted in a dramatic drop in the revenue Alaska collects in the form of production taxes.  Until recently, production taxes were Alaska’s number one source of yearly revenue.  The members of the Alaska Independent Democratic Coalition have consistently called for systematic oil tax reform that ensures a fair return for our commonly held oil resource.

“With a $3.5 billion deficit, it’s been disappointing to hear oil and mining executives say they don’t want to help, and that they want to keep their unaffordable state subsidies. Selfishness by some of the most privileged corporate interests is part of the reason a needed, comprehensive plan failed,” said House Finance Committee member Rep. Les Gara (D-Anchorage). 

For more information, please contact Alaska Independent Democratic Coalition Press Secretary Mike Mason at (907) 444-0889.



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