On Saturday, April 12, Rep. Sarah Vance held a mid-session town hall for her constituents with a presentation explaining just how large the fiscal gap is between spending and expenditures in our state.
On one hand, this was a very encouraging development. Six years ago, when Rep. Vance was first elected to office, she rode on the same message of the then-first time candidate for governor, Mike Dunleavy. The message was that by simply finding efficiencies in our wasteful government, we could all receive a full statutory Alaska Permanent Fund dividend payment and even receive back payment from previous cuts to the PFD. She told us exactly what enough voters wanted to hear and won her election.
The problem is that it was just as much of a fiscal fantasy then as it is today. The only difference is that instead of $10 billion in the congressional reserve fund, we now are down to our last $2.82 billion of savings. The check engine light has been flashing for years and now the engine is about to seize up. Rep. Vance has spent years telling voters what they wanted to hear, that she would always fight for a statutory PFD, reality be damned. Was it ignorance of the actual fiscal situation? Or cynicism, knowing you can win reelection by providing simple answers that people want to believe.
Thankfully, Rep. Vance finally is prepared to educate her constituents about just how bad the fiscal crisis in state government really is, if only to explain her failure to do anything to deliver on her full PFD promises.
Rep. Vance spent 45 minutes driving home the message that the state can’t possibly afford to provide a meaningful base student allocation increase for schools or a meaningful PFD and it won’t be able to next year, or the year after that, or as far into the future as congressional budget forecasters will forecast, and we all just need to accept it.
Once again, Rep. Vance is following the political messaging of Gov. Dunleavy who accepts the status quo by presenting a budget with a $1.5 billion deficit without even attempting to propose a solution. Alaska is stagnating, at best, under this feckless leadership.
Cuts and a failure to keep up with inflation have crippled Alaska. We spend millions in training public safety officers, only to have them take their training outside for better pay and benefits. State offices are understaffed for the same reason, incapable of managing payroll, processing permits, applying for federal transportation grants or getting families the federal aid they need, and it is just a matter of time before the state is sued for failing to provide for an adequate education system as is constitutionally mandated.
Maybe Alaskans will accept that a solution to this fiscal morass is on the revenue side of the equation. In the short term, taxing both publicly traded and privately held oil companies at the same rate would raise $190 million a year in revenue. Reducing the per barrel oil tax credit from $8 to $5 could save the state from paying out between $400-500 million a year to oil companies. These are possible solutions that have been discussed and could be implemented during this legislative session. Unfortunately, Rep. Vance made no mention of either proposal during her presentation.
Instead, Rep. Vance spoke of fiscal stability coming from economic development, but due to state development credits, new oil field development will actually cost the state money, making things even worse in the short term. The gas pipeline is no closer to happening now than it was during the Walker administration, and is at least a decade away if it happens at all. Over 90% of businesses in Alaska pay no state taxes because of our lack of income tax and general economic activity contributes nothing as we have no state sales tax. We have the lowest tax burden in the U.S. and are the only state with neither an income tax or a sales tax to provide stable funding for state services, obligations and unforeseen disasters.
Rep. Vance failed for years to be frank with her constituents about the hard reality of Alaska’s fiscal deficit. Now she is failing to be forthcoming about possible solutions for how we can move forward toward a more secure future for our state. We deserve better.
Diana Carbonell is a Homer resident.