When Gov. Bill Walker announced another special session several weeks ago, it was no surprise to those watching the train wreck that is Alaska politics. Like the others, this one will cost thousands of dollars a day, could result in more financial pain for Alaska families, and may further weaken an already struggling economy. Unfortunately, if there is anything we can count on when our elected officials meet in Juneau in two weeks, it's that the actions of most will probably be criminal.
Now, before I get accused of hyperbole, let me explain. It is not that I think crimes were committed in the past by the governor and Legislature; the Supreme Court ruled that the PFD MAY be paid rather than SHALL be paid. However, the actions of the governor (and House and Senate majorities) have been criminal according to definition No. 2 in the dictionary I use, which reads: criminal, adj. informal (of an action or situation), deplorable and shocking.
As a teacher, I often start my classes with a review of important ideas and concepts students should have previously learned, so let's review. Alaska's economy is in recession. We have the highest unemployment rate of any state in the U.S. Last year 6,500 jobs were lost (only 77 of those were state jobs) and this year economists are projecting an estimated 7,500 additional jobs will disappear. Additionally, Alaska's GDP (the value of economic activity in an economy) has declined for the fourth year in a row.
Yet, despite the reality of our economic recession, Gov. Walker and a majority of our state representatives and senators have taken almost $1.5 billion out of our struggling economy. Walker's veto of half the PFD in 2016, and the inadequate appropriation of the PFD by the Legislature this year, have done and will do significant economic damage to Alaska and Alaska families. For the second year in a row, middle- and lower-class families in Alaska will be dealing with a 10 percent to 30 percent reduction in household income. Not to pay for government, but so that the money can sit in the earnings reserve account. Shocking!
The narrative of the Walker administration and some in leadership is that the budget "has been cut to the bone." If this is true, it would make sense to take the PFD and establish a tax scheme to fill the gap. However, most Alaskans believe that there is a lot of meat left to cut. Since 2006, the state operating budget has grown at twice the rate of population and inflation growth. Rather than banking excess money during high-oil-price years, elected officials (many still serving today) spent like drunken sailors. Alaska has at least two times the number of state employees per capita than every other state with the exception of Wyoming. Additionally, Walker and our elected representatives have spent millions of dollars on a natural gas pipe dream. To suggest that we have a revenue problem without first tackling our spending problem is deplorable.
Knowing that Alaskans are not buying the half-truth that the budget has been cut by 44 percent (a financial manipulation that includes a one-time payment to public employee pensions and a minimal capital budget) the governor has added crime to the call. Is the governor hoping to use our angst over rising crime rates in Alaska to suggest we need a new revenue source to fund the disaster that was created by Senate Bill 91? The governor and most in leadership are already spinning that we can't fix crime without more revenue. Shocking and deplorable!
Senate leadership has several options in response to Walker's call. One option is to join the House majority and governor and devise a new way to hurt Alaskans and the Alaska economy by imposing new taxes. A second option is to gavel in and gavel out, telling the governor and House majority, "No!" A third option is for our Legislature to gavel in, repeal SB 91, gavel out, and then wait until next January to prepare a sustainable budget that includes cuts and efficiencies. Not doing the latter would be just plain criminal.
Todd Smoldon lives in Willow, has been a resident of Alaska for 30 years, and has taught high school economics for 20 years.
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