Category Archives: Speeches & Testimony

Our comments on the proposed House Operating Budget (HB 57) …

CommentsOver the weekend we prepared and submitted our comments to the House Finance Committee on the proposed House Operating Budget (HB 57).  Here was the summary:

Alaska is currently in an economic recession. We believe consideration of that fact should drive the evaluation this session of every bill touching on the state’s economy. Things that adversely affect the state’s overall economic situation — or unfairly treat some Alaskans economically compared with others — should either be amended to avoid those effects or rejected.

HB 57 certainly is one of those bills that touch on the state’s economy.

For the reasons explained below, we believe that, in its current form, HB 57 both worsens Alaska’s overall economic situation and unfairly treats some Alaskans. In other words, we believe that HB 57 worsens the recession for both Alaska and Alaskans.

In order to avoid those effects, we believe that HB 57 should be amended in certain respects.

Our full comments are here:

Why Hammond 50/50 works …

When asked about alternative proposals to address Alaska’s current fiscal situation that are founded on using Governor Hammond’s original vision for the Permanent Fund, the current Administration and, now, apparently, the Senate Republicans are falling back on the same mantra — “the numbers don’t work.”

Well, the numbers do work and we capture the reasons why in this slide deck.  Use the right revenue forecast, start using the “other half” of the annual revenues from the Permanent Fund for the purpose intended by Governor Hammond (to help fund “essential government services”), view and use the accumulated amount in the earnings reserve account for what it was originally intended (as a savings account to help fund “essential government services” during low points in the oil price cycle) and maintain total UGF spending at last year’s $4.3 billion (the sustainable budget number) adjusted going forward for inflation and population change (growth or decline) and Alaska’s fiscal situation stabilizes, without PFD cuts or taxes.

Going further, by cutting the PFD as the Administration (SB 26), House Majority (HB 115) and now Senate Majority (SB 70) have proposed and, in some instances, imposing additional taxes on top of that (as the Administration and House propose) leads to even more erosion in overall Alaska income, huge increases in statewide poverty levels and vastly increased income disparity between high income Alaskans on the one hand, and middle and low income Alaskans on the other.

In short, all three bills make Alaska’s overall recession worse, and in Alaska’s version of Simon Legree, focuses its most harsh effects on those who can afford it least.

We outline why Governor Hammond’s 50/50 vision works, and the adverse effect on Alaskans by going further, in this slide deck from last week’s presentation at one of the World Trade Center Anchorage’s periodic “Meet & Brief” luncheons.  We encourage readers to review it if you haven’t before, and to share it if you agree with the approach and want others to be aware of it as well.

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This post first appeared on Alaskans for Sustainable Budgets, a blog focused on News & Commentary on Alaska fiscal and economic policy on national website Medium.

 

Our view of the way forward on Alaska fiscal policy (and the consequences of taking other directions)

At their invitation, we were part this week of the Fairbanks “Budget Blitz” hosted by the Greater Fairbanks Chamber of Commerce and the Fairbanks Economic Development Commission. The “Blitz” was designed by the two organizations to provide the Fairbanks community with a range of views on Alaska’s fiscal situation and potential responses.

Following presentations Tuesday by Office of Management & Budget Director Pat Pitney and Wednesday by Alaska’s Future new Executive Director Ian Laing, we presented our views on Thursday. The title of our presentation was “Implementing Governor Hammond’s 50/50 Plan,” but as importantly, it also focused in part on our preliminary analysis of the likely consequences on the overall Alaska economy of HB 115, another option currently being considered by the Alaska House Finance Committee. That option proposes to cut the Permanent Fund Dividend (PFD) and implement a capital gains and income tax, taking a significant amount of money out of the private sector to fund Alaska government. Continue reading

My written testimony for tomorrow’s Senate State Affairs Committee hearing on SB 1 and 2

Because I am out of the country and several time zones away I am unable to testify in person at tomorrow’s Senate State Affairs Committee hearing on SB 1 and 2.  Instead I am submitting written testimony.  The following is my submission.

Alaska’s Fiscal Situation: Past, Present & Future — an update

As regular readers will realize, at the request of Daniel Hamm, its Chair, we occasionally brief the Alaska Republican Assembly on the current status of state fiscal issues and our thoughts on how to deal with them.

We did that again this week, with a focus on what happened this past session(s), where that leaves the state’s fiscal condition, what the current outlook is as we start to think about FY 2018, and alternatives for dealing with that, admittedly somewhat initially dismal, outlook.

As explained in the presentation, I continue to believe there is a solid fiscal future ahead for Alaska — without resorting to permanent PFD cuts or significant taxes.  But it requires taking steps to implement Jay Hammond’s vision for Permanent Fund earnings and getting immediate control over what has become one of the biggest current expenses in state government — reimbursed oil credits.

This coming session may provide the last great chance to bring the state’s fiscal situation under control before more drastic measures become necessary.  The presentation outlines how we think that can be accomplished.

The update is above, or also available here (video) and here (slidedeck).

Rick Halford & Brad Keithley on protecting the PFD …

Talk of Alaska (5.24.2016)

Click here for a link to the program.

Earlier this week, former State Senate President Rick Halford and Keithley Consulting President Brad Keithley appeared on Alaska Public Media’s “Talk of Alaska” to discuss why the Permanent Fund Dividend (PFD) should not be changed or “replumbed” as has been proposed this session by the Walker Administration.

Their joint appearance carries with it a significant amount of irony.

Following Walker’s 2014 election as Governor, Halford was selected to serve as Co-Chair of the Walker-Mallott Transition Team based on his deep understanding of and connections throughout the state, and Keithley was selected as the opening speaker at the first meeting of the full transition team following the election.  Keithley’s role was to outline the economic situation that Alaska faced and potential ways for dealing with it.

The irony is that each bases his opposition to the Administration’s “replumbing” proposal on the very reasons they were chosen to be part of the transition effort.

Halford believes that a PFD cut will have a deep, adverse and unjustified effect on the people of the state, and Keithley believes not only that it is unnecessary in the face of ongoing developments in oil markets, but also has the worst adverse impact on the overall Alaska economy of any of the fiscal options currently under consideration.

The website for this edition of Talk of Alaska is here.  A podcast of the discussion is available by clicking on the small speaker icon half way down the page.

How to finish this session: the movie (I mean, the video)

At the invitation of Daniel Hamm, on Tuesday evening of this week I spoke to the regular monthly meeting of the Alaska Republican Assembly on the current status of the Alaska budget in this legislative session.  The title of my presentation was “How to Finish This Session with a Sustainable Budget (and economy).”  A more detailed introduction to the presentation is here.  

Daniel went to the effort of filming (and perhaps the much greater effort of editing and uploading) the presentation and the Q&A session after. He has my most sincere appreciation for the effort.  The full video is about an hour and a half; perhaps more importantly, the Q&A session begins at about the 53:00 minute mark.  The YouTube is below and I have provided another copy of the slidedeck I used below that if you want to follow along.

How to finish this session with a sustainable budget (and economy): My presentation to the Alaska Republican Assembly

At the invitation of Daniel Hamm, the Chair, yesterday evening I spoke to the regular monthly meeting of the Alaska Republican Assembly.  Dan had asked that I brief the organization on the current status of the Alaska budget.  The title of my presentation was “How to Finish This Session with a Sustainable Budget (and economy).”

The presentation focuses on four issues:

  • What level of revenue should the budget use as a baseline.
  • Oil & gas tax credits.
  • The Operating & Capital budgets.
  • PFD cuts and other taxes.

Continue reading

Spending caps (or at least spending cap “guidance”) …

HFIN Hearing (4.13.2016)Last Tuesday afternoon I was sitting in my home office in Anchorage (working on taxes, actually) when I received a call, telling me that HB 311, this session’s version of a bill first introduced by Rep. Charisse Millet in 2013, was up for hearing before the House Finance Committee at 8:30am the following morning.  The bill, which requires the Governor to submit as part of his annual budget the “sustainable budget” number calculated consistent with the “Goldsmith/ISER” approach, had received two hearings in the prior legislature (2013-14) (here and here) but hadn’t received any attention from the Committee this session prior to the call.

As I described in my subsequent testimony, the approach contained in the bill could be used as a fiscal plan (which I have advocated in the past), as a spending cap (which I also have advocated) or as a spending guide.

Never one to pass up an opportunity to talk about sustainable budgets, by 8:30am the next morning I was in Juneau, with a presentation which combined my thoughts with those that Dr. Goldsmith previously had submitted in support of the bill (the slidedeck is below). Continue reading

Given my shot, what I think is important for Alaskans to understand about the #AKbudget and #AKoil …

At the invitation of Greg Huff, the Director of the Alaska Council on Economic Education, I was the evening’s guest lecturer at yesterday’s session of this year’s “Economics Spring Forum,” an annual 3 credit course for teachers focusing on economic and financial issues. The Forum is sponsored by the Council in conjunction with UAA’s Center for Economic Education. Continue reading