Most everyone agrees that now is the time for action by the Legislature to help bridge the fiscal crisis that our state government faces. What started as a politically difficult conversation is quickly becoming an outright battle to ensure fiscal certainty for basic public services while retaining an investment climate for core business in Alaska.
There are voices coming from many sides of the debate; “don’t institute or increase my taxes”, “don’t touch my dividend”, “don’t take away services” and “cut spending to fix the gap.” In the past, the Legislature followed these conflicting voices, expecting that they may not be re-elected if they did not follow the unconstrained wishes of their constituents. Such lack of discipline has resulted in no corrective strategy implementation. While it may be important for our elected officials to patiently listen to the self-serving wishes of their constituents, it is now critical to realize that the job of leaders is to do what is systemically best for the state and re-set to a more disciplined and logical fiscal plan now to achieve a brighter future for Alaskans for the long term.
The voices arguing against use of the Permanent Fund earnings and increased revenue sources do not understand that if these items are not part of the equation to balance the budget that in a few short years, there will be no savings or future investment to help us out of the hole. There will be no money to pay dividends or provide for essential government services such as roads, education and public safety.
Unpopular decisions must be made by the Legislature to ensure that state government can operate without continuing a $4B+ deficit annually until we are broke. We urge the Legislature to move forward to enact a sustainable budget and believe that this includes all of the following options:
• Use of the Permanent Fund earnings
• Thoughtful decreases to the cost of state government and implementation of efficiency measures
• Additional revenue sources that include taxes on individual Alaskans
Emotions run high when discussions involve the dividend and/or taxes, but Alaskans need to have a stake in the state’s budget, and the days of oil paying for the majority of state expenses are over. Alaskans carry the smallest tax burden of any state in the nation and receive dividends, while Alaska has the highest per capita cost of state government. We are currently the only state without a state sales tax and state income tax. All other states have one or both.
Our reserves are running low, as is our patience with the state government. The time to enact or begin enacting a sustainable budget is now and we have the tools to make it happen, but only if all of the tools are utilized to fix the fiscal crisis, including use of Permanent Fund earnings to provide for substantial and immediate relief.
• Joe Beedle is from Juneau and currently lives in Anchorage. He is Chairman, President and CEO of Northrim BanCorp and Chairman of Northrim Bank.