Let me be absolutely crystal clear about one thing. The budgets which Sean Parnell has proposed, the legislature has passed and Sean Parnell has signed over the last three years, combined with what he has said on the record about the budgets he intends to propose over the next five years are leading inevitably to one thing: statewide income or sales taxes, if not both, and use for government spending of a portion of the earnings of the Permanent Fund. Period, end of sentence.
As far back as 2011, the University of Alaska-Anchorage’s Institute of Social and Economic Research (ISER) had this to say about Alaska’s fiscal future:
“… projection of future state population and public sector demands compared to revenues suggests that a number of adjustments to the state’s fiscal structure will be necessary in future years to maintain adequate public services.
Two options available to the state, in addition to reducing expenditures, are institution of a broad-based tax, and use of a portion of the earnings of the Permanent Fund. … It is anticipated that both options will be required ….”
The situation has only become worse since that time. Earlier this year ISER had this to say about Alaska’s future:
Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.”
In short, by the first part of the next decade even income or sales taxes and use of the earnings from the Permanent Fund will not be enough to close the gap at current and proposed spending rates. All that those steps will do is soften the then-required level of cuts.
Alaskans — and the Alaska economy — will face the worst of all possible worlds: dramatic cuts in the levels of government spending that they will have become used to, and the institution of broad based taxes to support even that level of reduced government spending.
As I have said repeatedly on these pages and elsewhere, it doesn’t have to be this way. But avoiding that future requires taking steps – now, right now – to put Alaska’s fiscal ship back on a strong course.
After talking to several legislators over the past couple of weeks I am not sure many understand the reality of the situation the state faces. I have heard too many times, “I know we have to reduce spending, but cutting the budget is hard and we will have to do it gradually,” and “we are going to make some cuts, but not as much as you want.”
I am confident the Governor doesn’t understand the reality. All that he and his extended “team” seem currently to be concerned about are rifling through my past voting record, making certain some Republicans are sheltered from listening to me and seeing if I will wilt under insults. No one — no one — from the Governor’s office is talking about this issue on the merits.
Let me be clear, this is not about what I “want.” Personally, I want to spend the next two weeks with friends at an annual music festival I regularly attend in Nova Scotia. Personally, I want to take a trip in November to catch up with some other artists that are out supporting new albums that I enjoy and start making plans for next year to do more of the same.
But I am not going to do any of those things because this is a critical time in the state’s history and I have scheduled meetings at home to talk about this issue with others.
This issue is about what Alaska and Alaskans need at this point in their history to secure their fiscal future. The Governor appears to have gone tone-deaf in understanding that. Someone needs to stand up for what is right.
We have seen Sean Parnell’s past budgets, heard what he has said about his future budgets and know where those are leading us.
Its time for a change. Over the next three weeks I am going to roll out on these pages the budgets I will support going forward. If adopted, they will lead Alaska to a safe and secure fiscal future. They will provide for a “Morning in Alaska.” They will put teachers in the classroom not only the remainder of this decade, but in the decades and generations to come.
At the end of the day, they will bring current Alaska government back to its core mission and in doing so, position Alaska to realize its destiny.
We’ll see how that goes.