HAVEN’T WE CUT ENOUGH? ISN’T IT TIME TO PONY UP TAXES?
BY SEN. SHELLEY HUGHES
GUEST CONTRIBUTOR
Calling on all Alaskans! If you don’t read anything else political between now and the next legislative session in January, please bear through the numbers and read this piece. You will be shocked, but you also will be well-equipped to answer the questions above.
What does it all mean? If we’ve really cut 44 percent (we haven’t), then we must be down to bare bones (no, we aren’t).
Consider this: Although our state has unique challenges, it is larger than the state of Idaho, has fewer local governments chipping in, and yet our per capita spending is four times that of Idaho. You read that right: four times.
The truth is, we can still make reductions without sacrificing excellent, essential services and in doing so, avoid asking Alaskans to pull hard-earned dollars from their wallets to pay for inefficiencies and nice, but unnecessary programs.
So back to that 44 percent.
The governor has touted that 44 percent has been cut, but you should know that this claim doesn’t at all tell the true story. It just refers to one category of funding (unrestricted general funds or UGF), doesn’t account for increases in other funding categories, includes capital dollars (that were extremely generous a few years ago) and also includes a one-time $3 billion payment into the retirement system.
Obviously, the 44 percent claim is very misleading.
What most of us care about is the year-after-year operating budget – the total annual cost of the daily operations of all the departments. Perhaps you’ve heard another claim of the governor: that “total state spending on the operating budget has been cut $1.9 billion since fiscal year 2015 – a 27 percent decrease in three years.” Let’s look at this closely. Twenty-seven percent sure sounds like a lot.
What makes up that $1.9 billion in cuts, that 27 percent? Operational dollars to programs and to the departments? Hardly.
According to Legislative Finance, $582 million out of the $1.9 billion is due to the reduction to Alaskans’ PFD checks last year.
$508.6 million is due to the reduction in what we’re paying to small companies, the little guys, for oil tax credits owed to them by the state.
Those two items totaling about $1.1 billion were not hardcore reductions to programs and departments, but were actually cutbacks to Alaskans and to small businesses. Not a penny of the $1.1 billion required any belt-tightening in state offices or to state services.
So what makes up the difference between the $1.1 and the $1.9 billion? On the surface, it sounds like a solid $790.6 million decrease in spending for agency operations over three years. Is there a catch? I’m afraid there is.
The truth is that this $790.6 million less in UGF spending is offset by an increase of $450.6 million in spending in other funding categories (federal, designated and other) in the operating budget.
So the real decrease in agency operations spending over those three years? $340 million. Let that sink in. Not $1.9 billion. $340 million.
This equates to less than a three percent reduction* in the overall state budget over three years. Not 44 percent, not 27 percent — just 3 percent.
Now let that sink in too. Less than three percent over three years.
We need honesty and transparency, not spin, when we talk about the budget.
Here’s some straight talk: Politicians who lead the public to think programs and departments have been cut to bare bones are simply trying to convince you that we can’t cut anymore, that it’s time to tax you, time also to take half your PFD this year and a greater share of it in the future. Please know that I’m not one of them.
I’ll be #telling_it_like_it_is every chance I get for your benefit.
*The $340 million is a 2.9 percent reduction to the total state budget (operating and capital). It is 3.4 percent reduction to the operating budget.
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Senator Shelley Hughes, District F represents Chugiak, Peters Creek, Eklutna, Fairview Loop, Butte, Lazy Mountain, Gateway and Palmer.
Shelley Hughes ! Now that’s the kind of analysis we need from our Legs. When they say, we’ve cut to the bone, BALONEY ! You blew them out of the water, Shelley. Let’s ride this wave into the next session ! It’s time to get the ship of state back on course !
Fake news from the Governor and his minions.
Senator Hughes is as accurate, forthright and cogent as can be. I expect to see absolutely none of that in the upcoming release of the Walker 2019 budget, but I sincerely hope I am wrong and surprised.
Thank you, Senator Hughes.
Maybe, together, we could simplify the issue by proposing:
an outside forensic audit of state finances and management practices so we can find out, factually, where money goes and how it gets there;
payment-in-lieu-of-taxes from every non-profit organization based in Alaska or doing business in Alaska;
specific departmental-savings recommendations in Mission Critical Alaska’s “Departments” (https://www.missioncriticalalaska.com/departments);
a spending moratorium on every entry in Alaska Policy Forum’s “Pork Book” (http://alaskapolicyforum.org/wp-content/uploads/Pork-Book-Final-versionRevisedrak.pdf);
a spending moratorium on the governor’s gasline project until secret items are made public.
Thanks so much for your help and interest, Senator Hughes.
Thank you, Senator Hughes, for your forthright and simple explanation of the current state of our State’s Finances. You are one of only a handful of current Legislators that are willing to tell it like it is. It would be nice if my Senator, Senator Giessel, would be as honest, open, and committed to protecting the Dividend.
The legislation needs to ask for us an audit of all departments and see where the cuts that can be made. I would start with the Governors office. His spending money on a climate change team is uncalled for. We have an EPA and DEC to monitor this Ice Age. Walker is only following the Obama agenda by keeping the Paris Accord agreement for the state of Alaska. Walker will keep spending money ?on his pipeline dream no matter what the costs are to the people of Alaska. #AuditTheState
Senator Hughes – Excellent article. I applaud your research, attention to the states financial detail, and communication of such to #All Alaskans. The subterfuge of this administration is only equaled by the inattention of Alaskans to the states financial affairs. Hopefully, our legislature will stall this take and spend administration until the next election for governor. Please give some serious thought to that election. Alaska needs leadership founded on facts. Thanks!
SEN. SHELLEY HUGHES for Governor anyone?
Ditto, Ditto, Ditto!!!! Hughes for Governor. You heard it here first. If she can manage the complexity of a small town (Palmer) budget, and political undercurrents of same, she has more experience and savvy than Walker or Malloy, and anyone I’m aware of that is a potential candidate.
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