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We're heading over the fiscal cliff and taking the PFD and education with us

  • Author: Sen. Berta Gardner
    | Opinion
  • Updated: July 3, 2016
  • Published July 3, 2016

It's been said the governor, in cutting the budget, deferring payment of subsidies to the oil industry, and capping your Permanent Fund dividend, has acted with courage. It takes courage, we hear, to make unpopular decisions. And this may be true, but courage does not necessarily make one right, and sometimes decisions are unpopular for a reason.

There's no question that Alaskans are in a deep fiscal hole, and digging. Our fiscal gap is so wide, it can't be fixed with marijuana taxes, a state lottery, or cutting state employees' salaries or jobs. Not even close. We're going to have to take many bites of the apple before we've whittled enough away to set Alaska on a sustainable fiscal course. So, which bite do we take first? Should it be the Permanent Fund dividend? I don't think so. But here's where the problem lies.

At the beginning of the session the governor put forward nine bills, each one designed to take a bite of that apple – from the PFD, from the budget, from oil subsidies, as a personal income tax, sin taxes, fish taxes, mining taxes, and so forth. But the Republican-led Legislature didn't pass them. Not one. Some never even made it out of committee and to the floor for a vote.

It's important to remember when grumbling about the Legislature, that the Republicans have a supermajority in the Senate and House. They can pass bills out of committee or refuse to. They can bring bills to the floor, or refuse to. They can pass what they wish. They are driving this bus, with hands at 10 and 2, right towards the fiscal cliff. It's not a "blame game." It's simply reality. And believe me when I tell you, we Democrats and independents are just as frustrated as you are, and we grumble too. But these are the cards we were dealt.

So now that his bills have died, the governor's options become limited to the red veto pen.

Earlier in the session, Democrats proposed budget amendments to cut expensive megaprojects. Republicans said no. But Gov. Walker stepped in last week to cut The Knik Arm Bridge, and the Sustitna-Watana dam. For this, all Alaskans should be grateful because whether we like the projects or not. They are unaffordable today.

We offered amendments to axe wildly expensive road projects, including the U-Med Road, which would cost $18 million for less than a mile. Republicans said no. Walker stepped in again and paused that road project and many others.

But other cuts, primarily to education (everything from early preschool to the university) should not be celebrated. Democrats in the House agreed to dip into our savings account on the condition our kids not be the ones to suffer from this budget crisis. And now many of the things we gained from that hard negotiation are gone. So after bargaining away part of our savings, we're not even getting the other end of the bargain for our kids.

The governor also cut the Permanent Fund dividend to the tune of $1,000 for every man, woman, and child in the state. If you're reading this and thinking that you can afford to chip in and forego a big-screen TV, or a Hawaii vacation, then you're right and you're lucky.

But for many, many Alaskans the PFD is more than that. It's food, clothing, heat, tuition, or medical bills, and that's not so easy to give up. Remember, the PFD is not a perk, or a bonus, or "found money." It's more like a stock dividend. It's yours. Limiting that dividend payment is akin to the state taking what it needs from your savings account, or skimming your stock portfolio. Taking money from your PFD, in fact, is the worst possible economic "bang for the buck" according to a recent ISER study. It hits the average Alaskan the hardest.

There's more bad news. The $430 million in oil subsidies that the governor "cut?" Well, it isn't really a cut. It's actually just a deferment, meaning that we're not going to pay that money out of this budget, but we'll pay it later. The problem is still there. In fact, by signing instead of vetoing the oil tax credit bill House Bill 247 on the very same day he announced his budget vetoes, the governor has enshrined into law some of the very problems that caused this unsustainable imbalance in the first place.

At this point Alaska will be paying out over $700 million in subsidies to the oil industry, the richest in the world, and taking about $700 million from Permanent Fund dividends from Alaskans. It doesn't take much to notice those numbers, and understand the problem.

I wish I had a magic bullet. I wish the Legislature hadn't wasted time on divisive legislation, and instead had voted on the governor's bills. I wish we'd been able to pull together and implement a fair, comprehensive, and balanced fiscal plan. But you know the old saying, "If wishes were horses then beggars would ride."​

Sen. Berta Gardner of Anchorage is minority leader. 

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