It is day 21 of the Special Session focused on our fiscal situation and Alaskans are frustrated. The legislature has not gotten its work done and we continue to have fiscal uncertainty despite extending the regular session to 120 days
and the Governor calling us back into a Special Session focused on a fiscal plan. As I sit here in my office in the Capitol, with no committee meetings on my schedule, I am frustrated too.
However, I ask you to be patient with policy makers for a few more days. I strongly believe that we are doing the right thing by standing firm for a comprehensive fiscal plan rather than just passing a budget with a “Permanent Fund restructure only” plan as the Senate Republican Majority has asked us to do. Let me explain.
The Alaska House Majority Coalition is a group of Republicans, Independents and Democrats who came together with one specific goal in mind—to pass a fair and balanced comprehensive fiscal plan. We have worked hard to come up with a prudent fiscal plan that would ensure that we will have sustainable revenues to pay for necessary services that Alaskans say they want like education, public safety, fisheries and transportation infrastructure.
The House Plan is
sustainable because it doesn’t depend on any one source of revenue and doesn’t count on either the oil market or the stock market to perform perfectly year after year. It is
fair and balanced because it ensures that
all Alaskans will contribute through Permanent Fund Dividend reductions, it has a small amount of progressivity through the Education Funding Act allowing those of with more to pay equitably with those earning less and it modestly increases oil and gas tax revenue through reforming subsidies and hardening oil taxes at certain price levels.
In contrast the Senate Majority sent over:
- An operating budget with hundreds of millions of dollars in cuts which requires slashing funding for education, senior care and public safety,
- a capital budget with $288 million in oil tax subsidy payments,
- a version of HB 111 – oil and gas subsidy reform—which actually makes our bottom line worse to the tune of about $885 million over the next 10 years,
- a Permanent Fund Restructure as the only revenue generating measure, and
- a “structural deficit” of about $200 million.
Let me emphasize that a structural deficit means that the Senate wants to run a deficit and burnup our savings intentionally.
Some people have said that we just need to compromise.
I agree. There must be compromise, but that compromise needs to be balanced. The Senate has not proposed a compromise—instead they have held firm on their structural deficit plan.
The Governor has proposed a compromise as well. However, that compromise continues to run a $300 million structural deficit and increases our oil tax credit payments to the tune of about $835 million over the House Plan by 2027. That is a not a solution. In fact, it just kicks the can down the road another year all but guaranteeing another budget stand-off next year.
We cannot accept a proposal simply because it averts a government shut down this year, while all but guaranteeing another political crisis next year. The can has been kicked far enough and it’s time for a long-term solution. While I am frustrated that we have not resolved this yet—I am even more frustrated at the thought of doing this again NEXT YEAR. This is the third year in a row that we have had the threat of a government shut-down. Enough is enough. It’s time to buckle down and solve this problem for once and for all.
We have 9 days left in this Special Session. That’s plenty of time to put together a meaningful compromise that meets in the middle, averts a government shut-down and ensures fiscal stability for our state, for our residents, and for the private sector for decades to come.