OPINION: A great budget is only the first step

The first balanced budget that doesn’t draw from state savings in a decade, with a largest-in-history increase for education, is a major step to restore fiscal stability and population growth for Alaska. However, our work is not nearly complete, and we must tackle child care, renewable energy policy and revenue next year if we’re going to ensure long-term economic growth.

This year’s budget increases the Base Student Allocation by $680 per student, an increase that is historic but still less than enough to offset eight years of inflation-adjusted cuts. Even after this increase, the Anchorage School District faces a $36 million deficit and class sizes are far too large, likely in violation of constitutional requirements that the state fund adequate public education. Next session, we need to appropriate additional funds and pass a permanent statutory increase to the Base Student Allocation. Fortunately, a consolidated school funding and internet-in-schools bill has passed the Senate and only needs to be passed on the House floor to become law.

As just about every Chamber of Commerce in the state has advocated, we cannot wait to invest in and stabilize our child care system. While a $7.5 million increase in this year’s budget is progress, that is only half what providers needed just to tread water. As a result of inadequate funding, expect the shortage of child care to become even more acute, forcing more parents out of the workforce and exacerbating dire labor shortages. Compare Alaska’s $7.5 million increase to North Dakota’s $62 million child care package — frankly, other states are leaving us in the dust, and our economy will continue to suffer unnecessarily. Next year, we need to appropriate significantly more funding for child care and pass Rep. Julie Coulombe’s, R-Anchorage, comprehensive bipartisan child care legislation, HB 89.

Many legislators worked hard to increase Renewable Energy Fund appropriations this year, and we were able to move forward two major wind projects that will help keep costs down while improving reliability in the Railbelt. However, we cannot keep a lid on prices while ensuring reliability until we pass Renewable Portfolio Standard, or RPS, legislation. Thank you to Rep. Jesse Sumner, R-Wasilla, and Sen. Löki Tobin, D-Anchorage, for introducing companion RPS bills, which have received initial hearings in the House Energy Committee and Senate Labor and Commerce. Passage of this legislation should be a top priority next year. If we fail to act, declining Cook Inlet gas production will force us into ultra-high cost dependence on imported natural gas. In an energy-rich state like Alaska, dependence on foreign, expensive, imported energy is simply unacceptable and would be devastating for businesses and consumers alike.

Over and over this year, we’ve heard about the need for a “fiscal plan.” We took the first and most important step of passing a balanced budget that finally attempts to fund education adequately. However, with a large PFD of $1,300, we are counting on oil prices staying at $73 or more per barrel. If we want to continue paying such large dividends, we must raise revenue. Unfortunately, despite bipartisan support for revenue measures, the House majority leadership blocked all revenue measures from coming to the floor for a vote. Some of these are common sense, like the administration’s proposal for technical fixes to corporate income tax accounting to ensure we capture tens of millions of dollars from mega-corporations like Amazon that do business online. There is no excuse for the failure to pass this bill, which generates revenue from Outside companies without costing Alaskans a penny.

I also support taking a vote on other revenue measures, like my HB 185, which establishes a net-zero income tax on high earners. My bill would have the effect of turning the PFD into a needs-based program, in which wealthy Alaskans would pay an income tax capped at the level of the PFD. This approach ensures even wealthy families have a net-zero personal tax burden while generating more than $214 million annually. It would also capture revenue from nonresident workers who currently earn wages in Alaska but send their taxes to the Lower 48. I believe that nonresident workers should pay taxes here if they have the privilege of earning high wages in our state.

This year’s fiscally conservative, pro-education budget is a major victory for Alaska. However, our work is not nearly complete, and we must do far more to address child care, renewable energy, and revenue as we look toward next year’s session.

Rep. Zack Fields, D-Anchorage, is in his third term in the Alaska House of Representatives.

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