Fiscal conservatives like to say that Alaska has a spending problem. Solve it, cut programs, and the good tax-free life can continue — along with a fat Permanent Fund dividend every fall.
The other side in the budget debate says the state has a revenue problem. They cite the political refusal to consider changes in oil taxes, mining taxes or corporate taxes, the rejection of a return to the pre-oil-days personal income tax, even the denial of an increase in the lowest-in-the-nation motor fuel tax rate.
They say raise new revenues and a good life can continue with better schools, better university programs and better services for children.
I say both sides are wrong, not that I don’t want to see better schools and responsible budget cuts. I just think it’s not an either-or question.
That’s the joy of being an opinion writer — it’s easy to declare everyone else is wrong.
Alaska doesn’t have a spending problem or a revenue problem; it has an expectation problem. It has unreasonable expectations that have solidified into concrete over the years.
Too many Alaskans — particularly too many elected officials — expect that someone else, someday, may need to pay taxes or accept a smaller dividend, but not them.
Or that more oil taxes alone can solve the problem.
Their expectations do not add up, even as the problems keep adding up.
We’re now midway through our fifth decade of no income tax.
Alaska is also in its fifth decade of a free-money payment every fall, drawing on the one stable source of revenue to pay for public services in the decades ahead — the Alaska Permanent Fund.
Meanwhile, the state budget is short several hundred million dollars for next year.
But moving any sort of a tax bill through the state Legislature is more painful than pulling a tooth. At least the dentist gives you Novocain.
And waiting for honest leadership from Gov. Mike Dunleavy, telling Alaskans the truth about false expectations, well, that’s as pointless as believing the dentist when they say it won’t hurt much.
The dentist doesn’t want you to worry. Dunleavy doesn’t want you to expect too much from him.
But you should worry about the state’s short-term fiscal health and its long-term risk of decay.
The most effective treatment is going to include everything from everyone. Taxes and spending cuts. Taxes on oil companies, other businesses and on individuals. Share the burden and the taxes can be held to a reasonable level that will not destroy industry or families.
But dump all of it on one plate and you risk losing a long-time dinner companion. The oil industry knows it will always be the deepest pocket for Alaskans to reach into when they want more money for the state budget. What really worries them is that they are the only pocket Alaskans ever reach into.
Amid large budget deficits and a financial future that is cloudier than a stormy fall day in Southeast Alaska, what does the governor do? Pretty much nothing. He seems more concerned with boosting state funding for homeschooling and promoting an entirely unrealistic North Slope natural gas project than telling Alaskans the truth: They cannot afford more years of no taxes, particularly if they want a healthy Permanent Fund dividend and a serious level of funding for education.
He is against taxes, and that’s the end of it as far as he is concerned.
Thankfully, the end of his term will come in December 2026. Alaska needs an honest leader, not a promoter of unrealistic expectations.
Reader Comments(0)