While Alaska stampedes toward a precipitous fiscal cliff, we should ask: What happened to all the conservatives? What happened to the folks who promised in the last election to curb spending, shrink government and get Alaska moving?
For an overwhelmingly conservative state, a poor soul who just fell down the rabbit hole would think we are as liberal as, say, Connecticut or Massachusetts. We tax for the heck of it. We give away free money. We even give away free money to ensure everybody gets free money. We view government as an ATM.
Unfortunately for a state that will need wads of cash forever, some of our lawmakers are on a jihad against the very industry that has fueled two-thirds of Alaska's economic growth since statehood. They swipe about $2 billion a year from the North Slope oil companies' stockholders in taxes the state does not even pretend to need. The cash, euphemistically called "surplus revenues," is socked away or siphoned off by politicians and their union and lobbyist pals through fat capital budgets.
Worse, a small coterie of Democrats and Republicans in the Senate Resource Committee -- thanks to insane coalition politics sparked by an unfortunate 10-10 GOP-Democrat split in the Senate -- has fended off since last year reform of Gov. Sarah Palin's Alaska's Clear and Equitable Share oil tax that allows the ongoing thievery.
Now, they have ginned up a ridiculous alternative oil tax that would do squat to spur oil production or put a single drop of new oil in the trans-Alaska oil pipeline. They are hoping nobody will notice their stall. Alaskans eventually will -- when the money runs out.
Despite accounting tricks and sleight of pen, Alaska's budget continues to swell. The operating budget in 1990 was $4.1 billion. In 2002 it had skyrocketed to $7.4 billion, and this year Gov. Sean Parnell is proposing a $12.1 billion budget -- with $3.7 billion as "surplus." (And people get 20 years in jail for stealing $50 in a stickup. Go figure.)
Because of all that, a reckoning is almost certain. I'm often berated by nitwits for banging away at this, but there is only one truth: Alaska is looking down the barrel of a fiscal gun. Here's why: It takes nearly $100-a-barrel oil to balance Alaska's books, and state government, flush with cash, is growing like President Obama's nose. When was the last time you saw Alaska shut down a major program or opt not to spend?
A few days ago, North Slope crude was bringing $123.50 a barrel on a volatile market, and Alaska was producing about 598,000 barrels daily, down from last year's 649,206. At about this same time in 2010, oil was $79.74 a barrel and Alaska produced 695,000 barrels daily. For the mathematics-impaired, that's a drop of 97,000 barrels daily in two years. High prices have saved us. If oil prices plummet to 2010 levels, we will be under water.
In a state where registered Republicans outnumber Democrats 129,000 to 71,000, how did we get here? Why is it happening? Sadly, conservatives do not always practice what they promise. It is easier to go along to get along when there is money -- lots of money -- and everybody wants some. Republicans, after all, need to be liked. Why? I have no clue.
Democrats? Easy to figure. Liberals want clout. They are, as George Orwell put it, power worshippers without power. They want -- even need -- a lousy economy to pull it off. The left in Alaska cannot flourish in the face of a healthy oil industry and economy. It needs misery to grow and tax and control. What is good for Democrats, we must remember, is decidedly bad for Alaska.
The governor last year could have proved his conservative bona fides by taking an ax to parts of Alaska's bloated $3 billion capital budget earmarked for senators stalling oil tax reform. But he did not. Now they ignore him. There likely will be no oil tax reform this session. There already is talk of a special session, as if that would help. It may take eventual redistricting and new players.
Sadly, most Alaskans say they voted for a conservative government. They bought into the hype and rhetoric -- but they do not complain much although what they got is a far cry from what they really wanted.
Or is it?
Paul Jenkins is editor of the AnchorageDailyPlanet.com.
By Paul Jenkins
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