Here’s a comment left on this site from former Ketchikan Rep. Kyle Johansen about another reader’s comment on Brad Keithley’s legislative “hit list,” and about the current fiscal situation. Get background here and here. Read here for the reference to Anchorage Mayor Dan Sullivan’s comments about the Permanent Fund.
Aside from the efforts of Mr. Keithley, his supporters and his detractors, when the dust settles Alaska will still have to make a choice in the revenue streams needed to fund future state government operations.
The fact is our deficit spending is currently approaching one billion dollars per year. A spike in short term oil prices (similar to the one experienced post the aforementioned 1999 advisory vote, and subsequent others) will release the pressure and kick the can down the road once again. Eventually, we will have to stand tall before the reality.
The real options for policymakers include increased taxes on industry (SB 21 sealed the big one for a few years, fishermen already pay off the gross and good luck with any large tax-producing mining projects going forward and gas revenue will be a meek shadow of oil revenue, if it happens at all), implementation of personal income taxes (there are simply not enough local or seasonal people), implementation of personal property taxes (the Feds own most of it, tax-free) or a statewide sales tax (a main revenue source for municipalities) OR accessing the revenue stream created by the earnings of the Permanent Fund. If there are other options, please post them and start talking about them now (and I double dog dare anybody to come up with anything other than “Increased Oil Production” Let’s just try it, come on!).
I read on this site the comments of current Anchorage Mayor and Lt. Governor Candidate Sullivan regarding the earnings reserve. Mayor Dan speaks the truth. Real choices are coming and tough decisions must be made and the dividend will be part of the conversation.
One of the “Fathers” of the Dividend program was Representative Oral Freeman of Ketchikan. I have listened to and heard of the legislative intent straight from one of the policymakers mouth (as well as from one of his staffers at the time of the 1970’s debate, Representative Mike Doogan) of how these options would eventually collide and cause a very robust conversations on state spending vs. taxes vs. dividend checks. The tension, so wonderfully crafted, is not an accident.
I trust Chairman Freeman has a wry smile as he watches it all unfold, no doubt as it should.