By CHRIS NYMAN
We all know the metaphor: Love the sausage but don’t want to know how its made.
That is also a great metaphor for our state government where we all enjoy the benefits of government largesse but don’t want to trouble ourselves with the basic facts of how it’s paid for.
Alaska has to be the most confused state in the union because liberals and conservatives fight against and for the same issues all at the same time.
I am very conservative by most standards. I just want to see the State of Alaska balance its budget honestly and meet its obligations to its creditors and the public.
I don’t care if you tax us or cut spending, eliminate the dividend or go after the oil companies; just face the reality of the fiscal path we have been pursuing for the past 10 years. It is unsustainable.
I would say blame has to go to every quarter of the spectrum. R’s, D’s, and the general public too.
So let’s all be the bigger person and agree that we must balance the budget, one way or another. Maybe oil taxes should be adjusted. Maybe we need a small income tax. Maybe we should cut some popular programs like Medicaid.
But none of this is possible while we continue to pay a cash dividend. Despite the flawed recommendation of ISER many years ago, the dividend is not a useful purpose of government.
I am not saying that government should spend it instead. But the simple fact is we have not enough money coming in to fund everything. I maintain the best thing we can do is to suspend the dividend. The federal funding this year will easily replace the supposed dividend benefit to the economy.
Let us change our way of thinking on the dividend. Let’s right our ship of State and seek a sustainable future. Let’s focus on the principles of what a constitutional government does best and reduce what it does not do best.
The dividend should be eliminated or substantially reformed to become a tax-exempt benefit to every Alaskan. But we really cannot even think about reform right now because there is no excess income to the State.
That could change.
We have seen the Permanent Fund grow historically beyond the rate of inflation. If that continues, the Permanent Fund could someday produce enough income to pay for State government and have surplus funds for a “dividend” of some type. But if we spend down the Permanent Fund now, that future becomes more difficult.
We are the luckiest people in the world. We are so fortunate to live here in Alaska in the most free country in the world. Then on top of that we have an oil-derived trust fund that can sustainably deliver $3 billion per year to fund the operation of our government and its resulting benefits. Otherwise we would have much fewer services or pay much higher taxes.
All we have to do now is balance the budget. Honestly.
Chris Nyman writes occasionally for Must Read Alaska.

