BIGGEST CUT IS NOT TO GOVERNMENT
IT’S TO ALASKANS
After claiming for seven months he cannot cut government, but that taxes are essential to Alaska’s survival, Gov. Bill Walker made good on his word today.
His choice was to barely touch government spending. There are still more than 16,000 filled positions and a travel freeze that never quite froze.
He chose to trim around the edges in education and commerce, but not touch the lavish labor contracts or ask employees to cover some of their own health insurance premiums.
Instead of program cuts, Walker chose instead to slash the Permanent Fund dividend and various road projects — projects that are completed by the private sector.
The cut to the Permanent Fund Dividend equates to a 50 percent or more tax. (The IRS will take another $300 (plus or minus), leaving taxpayers with roughly $700 in actual benefit from oil royalties).
The governor’s unilaterally imposed dividend tax will give him another $700 million to work with.
YOU’RE A STATE TAXPAYER NOW
Alaskans, by having their dividends garnished, have become state taxpayers without a vote.
This, however, is not a hard hit to the Alaska economy, as the cash goes from your pocket into that of a public employee, and it will still get spent in the Alaska market.
But if you’re an air carrier with a route to Hawaii, you’re already re-calculating the coming winter travel season.
Walker also made cuts to projects under way and on the planning table. They include the Knik Arm Crossing, Susitna-Watana Hydro, and various roads being built or planned with state funds.
He did not cut the Juneau Access Road today, although that fully funded project is still in peril under the Walker Administration. If he was smart, he’d let that project go through.
As predicted, Governor Walker cut cash credits due to the smaller oil and gas producers, chopping them from $430 million down to $30 million. Those are bills he’ll have to pay later; he did the same thing in his first budget.
WALKER: BLAME LEGISLATURE FIRST
Walker began his morning by breathlessly blaming the Alaska Legislature for not giving him a fiscal plan. He glossed over his responsibility in providing his own prudent plan first. The plan he presented earlier was panned by the public, but Walker insisted that all components worked together, and must be passed together.
At a March news conference, Walker said he would call a special session if the Legislature didn’t pass his multiple tax proposals. He wrote to legislators that taxes, spending cuts and a restructuring of the Permanent Fund are “written in pen.” But he could not bring Democrats to the table to agree to cuts, and their vote was essential.
The Legislature, closer to the people, dug in. Sen. Pete Kelly, co-chair of Finance, said taxes would not be considered before budgets came down.
CERTAINTY ABOUT ONE THING: THE SIZE OF YOUR DIVIDEND
Has there ever been a time in Alaska Permanent Fund history when the amount of the dividend was announced in June? Not that anyone can remember. The announcement is usually made in the fall after an extensive calculations — and the amount has been a well kept secret until its unveiling.
At least Alaskans know and can plan accordingly.