Gov. Bill Walker was right to reduce this year’s Permanent Fund Dividend to $1,000. It’s part of his broader plan to deal with the state’s budget crisis, which the Legislature essentially ignored. So he’s called them back for a special session that begins Monday. And he’s asking for us to help him guide the outcome of that showdown toward a more sustainable future.
Walker wouldn’t have been the sole owner of the PFD reduction if the House had passed Senate Bill 128. But that never made it out of the House Finance Committee. Rep. Lynn Gattis, R-Wasilla, was one of the votes against moving it to a floor vote. She said it’s been tough trying to convince her constituents how dire the budget situation really is.
But a Rasmuson poll cited by Walker suggests most Alaskans get it. It was conducted in January and the results were similar to the one they did last summer.
However, the one figure Walker quoted from that poll isn’t necessarily a reliable indicator of where Alaskans stand on the PFD reduction. It showed 68 percent of Alaskans think it’s acceptable. Yet in the same poll just under half the respondents supported his proposed use of the Permanent Fund to pay for state services. And an Ivan Moore poll released this week by the Alaska Dispatch News has support hovering around 40 percent.
So who’s reading the tea leaves right? I think they both are.
Looking back to the first Rasmuson poll last summer, there’s a hint that as much as a third of Alaskans may be seriously misinformed. They think the state’s economy is in good shape despite the crash in oil prices and the budget crisis it’s caused. And they’re under the impression that Alaskans already pay the same or more state taxes than people in other states do.
On Walker’s side, the support he referred to isn’t unconditional. Many people find it acceptable to cut the PFD only if the state drastically reduces the millions of dollars in oil tax credits first.
That’s partly the position taken by Sen. Bill Wielechowski, D-Anchorage. He’s also concerned that reducing the PDF will hit the neediest Alaskans the hardest.
On that second point I’d argue the vast majority of us will do just fine without the extra $1,000. That half billion dollars will be better used shoring up state government. So instead of keeping the PFD as it is for welfare reasons, Democrats should be developing a plan to offset the loss just as Juneau’s assembly did when they eliminated the broad based sales tax exemption for seniors.
Another side of the opposition to reducing the PFD are the hardliners like Rep Wes Keller, R-Wasilla, who believes the state shouldn’t touch the PFD without a vote of the people. Keller is under the impression we can get a lot closer to a balanced budget with more spending cuts.
“Alaska has an embarrassing overspending problem,” Keller wrote in response to Walker’s budget veto.
If that’s true, then Walker inherited a mess Keller helped create. Most of the spending since he arrived in the Legislature was done with his party’s blessing. And after the fall in oil prices put the state deep into the red, they still went ahead and authorized the wasteful Legislative Information Office lease in Anchorage, spent another half million dollars to outfit the building with new furniture, and threw away almost as much suing Walker for expanding Medicaid.
Keller’s lack of credibility lets me put his camp alongside those in the Rasmuson poll who are misinformed. Anyone who prefers ideology over reality should study the red state experiment that Kansas started in 2012. That’s where, with the help of a Republican dominated legislature, Gov. Sam Brownback enacted a series of big tax cuts, eliminated four state agencies and laid off about 2,000 government employees. It was supposed to spur job creation and generate $300 million in new revenue. Instead job growth lagged well behind the national average and revenue dropped almost $700 million.
At this point, I think Gov. Walker is the only one looking at the whole of the problem and not just the parts. I think he made a mistake by signing HB 247 into law. It left too many dollars of unjustified oil tax credits going to the world’s least needy recipients of government welfare. But I’m with him in asking Alaskans to accept the reduced PFD. We can be true leaders by going first, especially since sacrifice is involved.
• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector.
