Let’s bust one myth right now: Gov. Mike Dunleavy’s $444 million in vetoes would not fund a $3,000 Permanent Fund dividend. To be precise, the $444 million he vetoed comes out to approximately $600 per Alaskan who receives a PFD. As we have heard from literally thousands of Alaskans, it would be incredibly short-sighted to destroy the university, crash our economy and defund public education for a one-time $3,000 PFD payout. But that calculus is even more obvious when we consider the costs and benefits accurately: In exchange for the sweeping devastation Dunleavy’s vetoes would cause, each Alaskan’s PFD check would only be $600 larger.
Good luck replacing your paycheck, health insurance or university scholarship with $600.
The governor continues to claim that the Legislature should appropriate funds for a super-sized $3,000 PFD. Yet he has provided no plan, no balanced budget proposal to get there. There is no way to fund a $3,000 PFD without draining the Permanent Fund itself, unless we substantially raise oil taxes. Under Gov. Dunleavy’s plan, we would drain the Earnings Reserve by 2025 and have $0 PFDs after that. It would be insane to drain our trust fund for a short-sighted payout, as I wrote in a previous op-ed.
The governor’s budget plan is simple: Devastate our economy, defund essential public safety and law enforcement programs, and cripple our future through wholesale elimination of early childhood education programs. Meanwhile, Gov. Dunleavy would drain Alaskans’ savings in the Permanent Fund and lose out on the investment earnings that are the rightful inheritance of my daughter’s generation. Naturally, his vetoes have drawn widespread condemnation. I have received thousands of letters, emails, and phone calls in opposition to the governor’s vetoes, and dozens of Alaska’s most prominent business and non-profit organizations have urged us to override the cuts. But many people oppose Dunleavy’s vetoes thinking the trade-off is a $3,000 PFD, and the mathematical reality is far worse.
Here’s another way to put $444 million in perspective: That is almost the precise amount of additional revenue the Legislature could generate through a modest adjustment to per-barrel tax credits claimed by the oil industry. Specifically, reducing the per-barrel credit to the amount industry requested — $5 per barrel — would save the state nearly a half-billion dollars. That’s enough to negate the need for every single veto of Gov. Dunleavy’s and have a $1,600 PFD payout. Quick history refresher: When the oil industry and its allies rewrote oil taxes with Senate Bill 21 in 2013, industry lobbyists asked for a $5 per-barrel tax credit (among many other changes). At the last minute, a House floor amendment increased the per-barrel credit to $8 per barrel at modest oil prices. Back in 2013, prices were high and many legislators didn’t realize how much money this amendment would cost. Now we know it’s massively expensive, and a simple change back to $5 per barrel would save nearly a half-billion dollars in revenue and protect essential jobs and public infrastructure.
Unfortunately, Gov. Dunleavy has categorically opposed even small changes to per-barrel oil tax credits. Rather than a modest tax credit change back to what the oil industry itself requested to fund a $1,600 PFD, or a $1,000 PFD consistent with the amounts we’ve paid historically, he would prefer to wreck the state’s economy.
Fortunately, the Legislature is working together across party and caucus lines to defend our economy, institutions established by the Alaska Constitution and indeed the lives of many of our neighbors. It is incredibly inspiring to see legislators from all regions and backgrounds pulling together to override these vetoes. For the sake of Alaska, I hope we prevail.
Zack Fields (D-Anchorage) represents the Downtown, Fairview, South Addition, Government Hill, and Eastridge neighborhoods in the Alaska House of Representatives.
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