The House Majority is the biggest roadblock to long-term fiscal stability for Alaska. Leadership will not bring bills to the floor that would address our state’s massive and growing structural deficit that threatens funding for roads, schools, public safety, and Permanent Fund Dividends. Additional revenues are an essential element to fixing that structural deficit, and it’s time for the House Majority to put aside the rhetoric and act.
More than 40 years ago, the State of Alaska bound itself to oil as our primary revenue source. Relying almost entirely on oil revenues to pay the bills backfired in 2015 when oil revenues fell by $3 billion (almost a 90% drop in one year). Since then, we’ve cut state services by over $1 billion. These big cuts are why our schools are closing, our roads went unplowed, and we have an awful backlog in the Supplemental Nutrition Assistance Program (SNAP). Even after we made the difficult shift in 2018 to sustainable spending of Permanent Fund earnings to help pay for conventional state services as well as PFDs, our total revenues have been inadequate. Services have been reduced to only mission-critical: Further cuts are the same as shutting off life support on the space station.
This has not stopped some Alaskans from singing the same old song of more cuts only (without any specifics suggested). A radio talk show host once said “Cliff, just give me five minutes alone with that budget” in his best budget Dirty Harry impression. Well, the Republican-dominated House Majority just had the budget for months, and that budget for agency operations actually increased slightly because there was no way to find major places to cut without severe damage to critical services and our economy.
The only piece of fiscal policy the House Majority seems interested in is a constitutional amendment to change the existing constitutional spending cap formula. While a new spending cap could be part of a comprehensive solution, the most pressing problem today is not overspending, it’s the ability to pay the bare minimum to keep our state functioning. Yet the legislation has made it further in the House faster than any other fiscal policy bill at a time when Alaskans demand investments in education, public safety, a decent retirement for our public servants, and healthy and sustainable Permanent Fund Dividends.
To top it off, the spending limit formula the House Majority wants to put in law would decree a budget $100 million lower than the same budget that House Majority just passed. Every Alaskan needs to ask: What additional services does the House Majority want to cut that its members are afraid to say out loud?
We need to invest in our state – and we need additional revenues to do it. Even Governor Mike Dunleavy has explicitly acknowledged that Alaska requires more revenues, showing that he recognizes that new revenues allow us to deliver stability, quality services, and sustainable PFDs all together.
Now the Governor needs to show additional leadership to further educate the public and push the House Majority leadership to bring revenue bills to the floor. We need these bills on the floor for consideration so the public can see where each legislator really stands on solving our fiscal crisis.
Without new revenues—and with the obvious failure of the cuts-alone approach—our only option is to spend savings unsustainably. The State of Alaska spent more than $15 billion in savings in the last 10 years by delaying fiscal action. This cheats the future and amounts to a race to insolvency. The House Majority leadership must act on revenues to give the people of Alaska the roads, schools, public safety, and Permanent Fund Dividends we need and deserve.
Cliff Groh is the first-term State Representative from House District 18, which contains Government Hill, JBER, and parts of North Muldoon, Downtown, Fairview, and Mountain View. He is a member of the House Ways and Means Committee and has worked on Alaska fiscal issues over four decades. He was the primary legislative staff member who worked to create the Permanent Fund Dividend.
This post is a submission to The Alaska Current. Please send submissions to news@thealaskacurrent.com.
