“Don’t tax me!” That’s the message the Alaska State Chamber of Commerce and Concerned Juneau Seniors have for elected officials struggling with budget deficits. It’s a chorus that’ll be getting louder because new revenue is needed to keep our state and local governments functioning. But those of us who are financially secure should recognize it’s time to pay for the privilege of living in Alaska.
Let’s start with the Chamber’s arguments. They fired off their letter to the Governor, the Senate President and the Speaker of the House. It said they’d support new taxes on businesses to make the state’s operating budget sustainable, but only after exhausting the last resort of taxing wage earning Alaskans.
“Businesses will not invest in an undisciplined state” the Chamber warns, “that continually returns to taxation as an answer for its unsustainable spending.”
Here’s why that’s hogwash.
Speaking from a balanced budget perspective, our state government has been disciplined. Spending may have been higher than some people liked, but for more than 10 years prior to this year’s budget crisis, the state had sufficient revenue to pay the bill. In fact, through 2010, it was enough to also repay the Constitutional Budget Reserve (CBR) loans taken out during the early part of the last decade.
State spending would have been sustainable if oil prices had remained stable. When they fell off the charts, the state balanced its FY16 budget by borrowing from the CBR. But that’s not what caused Standard & Poor to lower Alaska’s bond rating outlook from stable to negative. It was our Legislature’s refusal to recognize that new revenue is needed to close the budget gap.
But the big whopper in the Chamber’s letter is the notion Alaska has always relied on new taxation to balance our budgets. As has been stated in countless news reports and commentaries, we have the lowest individual tax burden in the entire country and the fourth lowest business tax rates. We’ve all benefited one way or another from government spending money that we didn’t give into.
The Chamber knows these facts and likely understands new taxes are justified. But admitting that publicly wouldn’t serve their membership’s wish to stay off the Legislature’s taxation radar. So they’ve reverted to crying wolf rhetoric as a means of pressuring the government to tax someone else.
That’s similar to what the Concerned Juneau Seniors are trying to do. They’re a newly formed group reacting to proposed changes to the local sales tax exemption for seniors. The CBJ Assembly is preparing to vote on the issue next week and they want them to spread the new tax burden to others in a more fair and equitable manner.
What both groups have in common is they know their voice will be louder if they join forces with others who oppose paying new taxes. But their situation isn’t as universally desperate as either of them claim.
Big and small businesses signed onto the Chamber’s letter. The big have room to absorb new taxes. Among the small are stable companies and others with genuine worries about keeping their doors open. Similarly, I suspect the senior group includes some who are comfortable living off their retirement checks while others are still working to make ends meet.
Generally speaking, a lot of Alaskans can afford new taxes. Measuring the private wealth by the concentration of millionaires, we rank fifth among states while Juneau is ninth of all cities across the country. But I suspect the wealthier members of both groups are trying to take advantage of the sympathy plea available to the less affluent sector.
No one likes to pay taxes. But instead of whining we could imagine Alaska as a country club or fitness center. Anyone who has the money to belong to either can choose whether to join the best club in town or settle for something less. It’s a matter of personal priorities.
Now, I can’t count how often outsiders have said that I’m really lucky to be living here. They don’t say that because of our low tax rates or the Permanent Fund Dividend. What they see is the last paradise on Earth. And I think it’s time for those who can afford it, including me, to start paying a higher admission fee if we choose to continue making Alaska our home.
• Moniak is a retired civil engineer with more than 25 years of experience working in the public sector.
