OPINION: Legislature deserves credit for fiscal responsibility

While the recently completed legislative session was at times messy, the final outcome was a good one: a balanced budget, a reasonable and affordable dividend, badly needed additional funding for education and child care, and a decent capital budget.

A special session shouldn’t have been necessary, but at least it was only one day instead of 30 days.

Next year’s operating budget is based on a price of $73 per barrel of oil by the Department of Revenue in its Spring Forecast. We all know that the price will likely be higher or lower than that estimate, but the Legislature was wise in not dipping into its $2.3 billion budget reserve as the use of those savings may be necessary if the price of oil drops below the forecast.

It is also important to note that the Legislature chose not to raise or implement new taxes to support the budget. That demonstrates that we don’t need new or higher taxes if we continue to use discipline in our overall spending, which includes the dividend.

Implementing a statewide sales tax would hurt everyone, most particularly low income and rural Alaskans, and would be a significant drag on the state’s recovering economy.

I believe most Alaskans reject the notion of an income tax simply to provide a higher taxable dividend.

Increasing oil and gas taxes is counterproductive as they will reduce our future income by discouraging new oil production even while we have major untapped deposits.


The key to future fiscal planning is to simply continue what the Legislature just did — produce a balanced budget with reasonable state services and an affordable dividend without using excess draws on the Permanent Fund or our savings accounts. If we stick to that formula, we are not likely to need new taxes, at least in the near term. It is also the key to allowing our anemic state economy to recover and hopefully prosper in the future.

Harry McDonald is the former owner and CEO of Carlile Transportation Systems and retired from Saltchuk Resources in 2018.

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