Alaska can no longer afford a sense of entitlement

On Feb. 17, 2016, I listened to and provided testimony before the House Finance Committee on HB 115, a bill designed to address Alaska's $2.7 billion budget gap. One component of the bill is to enact a progressive income tax, taxing both residents and nonresidents at 15 percent of federal income tax due or $25, whichever is greater.

I commend Reps. Paul Seaton and Neal Foster for their leadership and courage in sponsoring a bill that includes a progressive income tax, which will help provide a comprehensive and sustainable solution to the state's budget crisis. The price of oil has plummeted.  For far too long our legislative budget process has been dictated by fluctuating oil prices over which we have no control. This is no way to run our state's economy. The state requires a sustainable budgeting approach that will provide predictability for future planning.

[Income tax debate heats up while Alaska approaches do-or-die moment]

While awaiting my turn to testify, I listened for well over two hours to Alaskans from all over the state speaking for and against this bill. I heard first-hand how entitled we Alaskans had become since the Legislature eliminated the state income tax in 1980 and in 1982 distributed the first Permanent Fund dividend checks.

I am a second-generation Alaskan born in Anchorage. During the 1970s, while in high school and college, I worked various low-level jobs and paid a state income tax. The amount was 16 percent of my federal income tax obligation — more than that proposed by HB 115. I believed then, and continue to believe today, that it is my responsibility as an Alaskan to pay my fair share to support the infrastructure and numerous other amenities that I rely on and enjoy.

As a twentysomething, I thought that eliminating the income tax was a terrible idea. Once gone, I predicted that it would be extraordinarily difficult to reinstate when the state's fiscal circumstances took a turn for the worse. Given the pushback the House Finance Committee heard from many Alaskans last week, this seems to be the case.

After 37 years of not paying an income tax and 35 years of receiving Permanent Fund dividend checks, some Alaskans seem firmly entrenched in the belief that they deserve adequate schools, a state university system, roads and road maintenance, fish and game management, a functioning state ferry system, Medicaid/Medicare benefits, drug and alcohol treatment services, state troopers, crime labs, courts and prosecutors, safe and properly staffed prisons, and a host of other benefits from state spending, without paying a single cent. Alaska is the only state in the nation that has neither an income tax nor a state sales tax. In addition to the vast number of services and benefits residents receive for free, our great state gives each resident a yearly check for the privilege of living here.

[Deficit-reduction plan from House majority uses Permanent Fund earnings, income tax]

At last week's hearing it was clear how many citizens did not appreciate just how fortunate we have been while the price of oil has been high. Many individuals were angry, blaming the Legislature for the current fiscal crisis and ignoring their own responsibility. Others were so aghast at the prospect of having to pay an income tax that they left all sense of courtesy and decorum at the door, berating legislators instead of approaching our crisis in the spirit of mutual problem-solving. Some attacked low-income Alaskans who received welfare assistance for relying on government for assistance, failing to recognize irony: each and every Alaskan today receives numerous benefits from the state government to which they make no financial contribution.

Contrary to what many stated during the House Finance committee hearing, further budget cuts will not bridge the fiscal gap but will only deepen Alaska's recession. Since 2014, the Legislature has cut the state's budget by 40 percent. Whatever feasible budget cuts remain, these cuts will not resolve the budget deficit. Plus, we must not ignore the fact that additional budget cuts will do further harm to Alaska's economy. Alaska is now seeing the multiplier effects from the budget cutting that has already occurred.  Nine thousand jobs were lost last year and further budget cuts will only lead to additional employment losses and crush small business development.

Hard times require hard choices. The time has come for all working Alaskans to do some soul searching and ask ourselves why we think we should receive infrastructure benefits and other services and not pay for them. Why do we expect from government what we wouldn't expect in our personal or business affairs?

If we are to help our state grow and prosper, we simply can no longer afford the entitlement attitude. Some Alaskans fancy themselves as independent, self-sufficient individualists surviving on the Last Frontier, but this vision will remain a tired and tragic myth if we continue to obsess about false entitlements and not rise to the call of our responsibilities.

I encourage my fellow Alaskans to make the responsible choice: Call or write your legislators to express your support for budget solutions that include paying our fair share, including a progressive income tax.

Carmen Gutierrez is a lifelong Alaskan. She worked for 25 years as a criminal defense attorney and then as deputy commissioner of the state Department of Corrections.

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