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July 29, 2019
We Need Better Choices
I am frustrated by the continued paralysis in Juneau that is threatening the jobs, education, healthcare, and safety of the people of Alaska. I hear every day from people that are anxious and scared. Frankly, I’m scared for the future of our institutions and economy if we don’t get Alaska back on track.
The bad things just keep adding up. Alaska’s credit outlook has been downgraded to “negative,” and the state ferries are shut down due to a strike. The city of Anchorage is under a civil emergency. A financial exigency has been declared for the University of Alaska. College students are not getting much-needed scholarships, and rural Alaskans are facing higher electricity costs. The fate of public education funding is in the hands of the courts, and we are in danger of losing out on hundreds of millions of dollars in federal funding. Public broadcasting has been cut, early education has been cut, and senior benefits have been cut. The list goes on and on.
Budgets Finally Pass with Funding and Restoration of Vetoed Items
Earlier today, the members of the Alaska Legislature took a couple of big steps forward in getting something done for the people of Alaska.
The new capital budget bill finally passed with the needed funding. Passing Senate Bill 2002 is the product of lawmakers working together for the betterment of Alaska. We need more of that kind of cooperation in our politics, now more than ever. Passage of the bill was never really in doubt, but the passage of the funding component was in doubt because it takes a three-quarters vote (30 members) to access the Constitutional Budget Reserve (CBR). Thanks to the statesmanship displayed today by lawmakers on both sides of the aisle, the CBR vote passed the House by a vote of 31-7.
Today’s action was vital because it allows the State of Alaska to leverage around $750 million in federal funding for transportation and infrastructure projects. The bill also reverses the sweep into the CBR of money for college scholarships, Power Cost Equalization (PCE), and other programs.
Figure 1: The voting board for the CBR vote for Senate Bill 2002.
Both bodies also passed another appropriations bill today. House Bill 2001 restores most of the Governor’s disastrous operating budget vetoes, including early education, K-12 education, the University, senior benefits, homeless services, ferries, Medicaid, libraries, public safety, legal services, and many other programs that countless citizens have written us about. The bill also included a $1600 Permanent Fund Dividend.
Why I Want to Protect the Dividend
A large and growing PFD is a meaningful form of fiscal security. I have a three-inch binder of printed articles and research both at the local and national level that demonstrates the economic benefits of Alaskans receiving a dividend. The PFD helps reduce income inequality and has been proven to help reduce poverty, especially in rural Alaska.
Taking money out of the pockets of people is a tax, and reducing the PFD is the most regressive tax possible. Cutting the PFD takes the same amount from children and seniors on fixed incomes as it does from millionaires. Reducing the size of the PFD in response to the state’s fiscal challenges only burdens the people of Alaska while nonresident workers and visitors who use Alaska public services pay nothing at all.
There Are Better Choices
Alaskans have been presented with a false choice – to either cut essential state services like public safety, education, and healthcare or pay for those services from the Permanent Fund. Both choices are bad. I refuse to accept that.
There is no reason to take what Alaskan’s receive as a share of our developed resources while continuing to allow multi-national companies to walk away with billions. Who are we trying to protect and why?
For decades, Alaskans have been receiving dividends based on the same formula, even when oil prices were below $10 per barrel. The most unfortunate aspect of our fiscal crisis in Alaska is that it was preventable and was inflicted by politicians protecting the oil industry.
Our fiscal crisis was man-made thanks to the passage of Senate Bill 21. The oil industry spent $20 million to fight a referendum of the people who were only able to raise $400,000, and unfortunately, Alaskans were confused on the issue, and the industry won. Our oil tax system is tilted in favor of the oil industry, and the people of Alaska are getting ripped off year after year.
Figure 3: The oil production forecast in the 2019 Alaska Spring Revenue Forecast.
Oil companies must be ecstatic watching the state fight over left-over crumbs and not looking at fixing our tax structures. If we had the same oil tax structure as North Dakota or Texas, we wouldn’t be in this mess.
I will continue to protect our economy by voting to override the governor’s vetoes, protecting the dividend, and keeping our resources from being exploited.
Thank you for taking the time to keep in touch and staying involved. I enjoy working with you during these difficult times to find solutions to move Alaska forward on the right path.
I’m here for you, so please keep in touch on matters important to you and your family!
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