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Tuesday, October 17, 2017
HomeAlaska NewsLes Gara’s ’10-year recession’ is taxation sound bite

Les Gara’s ’10-year recession’ is taxation sound bite

Rep. Les Gara, D-Anchorage

JUNEAU – Rep. Les Gara, the unwavering leftist anchor of the Alaska House of Representatives, has a favorite saying:

“I guess if you say something enough times, and convince people enough times with an inaccurate statement that you’re right, maybe they start to believe you.”

At least Gara walks that talk.

On Feb. 17, Gara, D-Anchorage, told reporters that State budget cuts would put Alaska into a “10-year recession.”

It was a round number, and it may have sounded good to him as a sound bite, one that he’s been repeating nearly daily for the past month without a challenge from the media.

No one in Alaska economic circles has repeated the theme, but Gara recycles it with confidence.

Cuts will “also get you one of the worst recessions in Alaska history, and a state where your children can’t find a job. You deserve real information instead of soundbites, so you can tell your legislators the path you prefer,” he wrote back in February in the Alaska Dispatch News.

“No solution will be as popular as those irresponsible political soundbites you hear. I’d rather hear from you than those who peddle false soundbites,” he concluded.

Monday, he said the House Democrats had cut $81 million from the $6.5 billion budget, which passed along caucus lines, 22-17.

But House Republicans said the budget is  actually $14 million bigger — two-tenths of one percent more than the governor asked for. Most Republicans voted against it, but three key Republicans joined with Democrats to pass a larger budget and enact new revenues to pay for it.

It depends on how you slice the numbers, whether the budget is smaller or larger than before.

Walker has proposed a gasoline tax that would raise $81 million a year, which masks the fact that significant cuts were not made. But the gas tax alone leaves a $2.78 billion gap.

The gas tax, one of several being considered, would cost average Alaskans about $150 a year, but would hit commuters from the Mat-Su Valley particularly hard, since many commute 50 miles or more per day.

“You’re taxing people who are driving to work, then taxing the work they do,” said Rep. David Eastman, a freshman from Wasilla, referring to the double whammy gasoline and income taxes that Democrats are also proposing.

A draw from the Permanent Fund Earnings Reserve Account is in the mix as well. The various taxes and Permanent Fund restructuring are included in HB 115, which was heard by the House Finance Committee today and held until Thursday for a hearing.

Gara went on to say that Alaska spends less than it did in 1975 in real dollars, but that is not borne out by the governor’s own slide deck from last year, which shows:

TAXES DRAG ECONOMY 

The problem with trying to tax Alaska’s way out of a recession is that taxes do not inject new money into the economy. Taxation only keeps the same amount of money circulating, but only after a portion of it is siphoned off by government, and is put back into the economy via government jobs.

In Alaska, with its limited economic diversity, the only way out of recession is by bringing in a lot more tourists, catching a lot more fish, mining a lot more gold, and putting a lot more oil in the pipeline.

There is also another penalty. When money is siphoned off by government, the main agent of economic growth is neutered — innovation and new ways of doing old jobs more efficiently. The economy suffers in the long haul. As in, over the next 10 years.

Or, the state can simply hope that price-per-barrel reaches above $70. Many economists believe prices that high are as much as a decade away. If so, Alaska will simply need to increase production.

As the statements from the House members were heard one-by-one just before they voted Monday on the biggie-sized budget, Gara brought out his favorite saying — the same one he has used whenever he’s had the microphone in front of him and a camera rolling during the past month: He argued again that cuts to government would put the state into a “10 year recession.”

There’s nary a data point to back that up. But at least he inadvertently admits it with his other favorite saying, “I guess if you say something enough times, and convince people enough times with an inaccurate statement that you’re right, maybe they start to believe you.”

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • An increase in oil production will not increase revenues to Alaska, because the oil companies do not pay any taxes.

    • What planet are you from? Where do you think your PFD comes from? – assuming you are an Alaskan.

  • Taxes never improve the economy, they are always a net drain on the economy. Gara’s 10 year recession is caused by slowing the flow of oil. The pipeline is taxed per barrel – so the logical thing to do is pump more oil – we have enough oil to keep the pipeline full for 200 years, IF the feds and the state will let us drill and pump.