It is time to face cold, hard reality. Our lawmakers are unwilling, even uninterested, in further cutting government spending. It's too hard, they complain, and besides, we already have cut a bunch. It would cause an eons-long recession, they say, and employee unions will not like us. You cannot cut enough, anyway, to close the $3 billion budget gap, so "why try?" they ask.
In this latest round of budgetary despair — and they happen every 20 years or so — there was no meat ax taken to entire departments or programs to help close the budget deficit. There never was going to be. Instead, the governor and lawmakers nibbled here, and scratched a little there, but, in the end, one of two outcomes almost is certain: nothing will get done, or they will hand Alaskans the sticky, short end of the stick.
[After a marathon on amendments, House passes budget 22-17]
It reminds me of the late Gov. Wally Hickel, who declared during his campaign as an Alaskan Independence Party candidate he was going to, by golly, slash the number of state employees if elected. Within days of arriving in Juneau as the state's top executive, a news guy asked something to the effect, "Have you started cutting state employees?" Hickel huffed and said, "You can't do that."
Democrats, leading the House because three GOP members switched teams, have passed their version of Gov. Bill Walker's $4.2 billion budget. The caucus — despite a spirited and laudable tussle from the GOP minority — either cut an embarrassingly thin sliver, $32 million, from Walker's budget proposal or actually bumped the spending plan up, depending on whose mumbo-jumbo you believe.
If you were fretting the Democratic caucus would shutter the lawmakers-only legislative lounge or fricassee its chef — and, really, who was not? — you can breathe a sigh of relief. All are safe.
The Republican-led Senate is looking at slicing only about $180 million, along with about $60 million — or 3.75 percent — from Walker's proposed $1.6 billion education spending. Altogether, the cuts by both chambers amount to squat, an itsy-bitsy percentage of the deficit and a tiny percentage of the overall budget.
[Repubican bill would pay bigger PFDs, pull more cash from state savings]
Now that it is clear the Legislature has no stomach for real cuts to help close the gap, what's next? You. And the Permanent Fund.
House Bill 115 annually would make available to the Legislature 4.75 percent of the Permanent Fund, based on a five-year average. Thirty-three percent of that amount would be available for Permanent Fund dividends; 67 percent for government.
The measure also packs in a state personal income tax amounting to 15 percent of an individual's total federal income tax bill, or $25, whichever is greater — and takes a slice of any capital gains. It remains to be seen whether including a tax and Permanent Fund language in one bill violates the Legislature's single-subject rule for legislation.
Alaska had an income tax that started small in 1949 and blossomed until it was repealed in 1980 as oil dollars flooded into the state treasury. Liberals have lamented its demise since. One can only wonder at the size and scope of the new bureaucracy needed to implement such a statewide pay cut, er, tax.
The House legislation is rapacious government doing what rapacious governments do. The measure boils down to handing you money, taking it back if you are a productive, employed citizen and then laundering it back through government. It is little more than a scheme to redistribute wealth while the state is sinking into a recession, a time when increased taxes of any kind should be anathema.
To reach this point, the Democrat-led House caucus had to cut off debate from the budget-cutting GOP minority which found umpteen places to trim, prohibit words such as "bureaucrat" or "slush fund" because they might hurt somebody's feelings — and decide the state is more important than you. (Surprise!)
The upper chamber is taking a different tack. Its Senate Bill 26 sets an unrestricted general fund appropriation limit of $4.1 billion annually that cannot grow "by more than the cumulative change in inflation since July 1, 2016. …" It would make available for distribution 5 percent of the Permanent Fund's average market value, based on a rolling average. Twenty-five percent would go to dividends.
The Senate measure, it should be noted, contains no income tax.
Count me among those who believe — know — state government should be cut further before taxing Alaskans twice by taking half or more of their Permanent Fund dividends and levying an income tax. The House income tax, by all accounts, and thankfully, likely is dead on arrival in the Senate.
That leaves the Permanent Fund as the only real answer. That's good for state government and those who profit from it.
Maybe not so good for you.
Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications.
The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com.