Page 1619 – Must Read Alaska

Homer gears up for recall election Tuesday

Suzanne Downing

-

June 13, 2017

Homer residents hold signs indicating they want to recall local city council members. — Residents of Homer, Alaska wave signs on a street corner as a reporter from This American Life in New York interviews one of them. The recall election for three council members is Tuesday.

HOMER, Alaska – A small group of Homer residents held signs and waved flags at passersby today, as this seaside community gears up for a recall election that has already attracted hundreds of early and absentee voters.

The response has been overwhelmingly positive, with more honks and waves from drivers than thumbs down. Organizers of the recall, which seeks to remove three city council members, say they are encouraged going into the home stretch of a drama that has played out for several months.

Tomorrow is decision day for Donna Aderhold, David Lewis, and Catriona Reynolds, who worked together somewhat surreptitiously to try to make Homer a sanctuary city, where illegal immigrants could find safe haven from federal authorities. It was an act of defiance against the Trump presidency.

FLYERS, SIGNS, FLAGS, AND BARBECUES: Late last week, Homer voters may have seen a reminder flyer in their mailboxes, which was printed and mailed by Heartbeat of Homer, the group that formed to oppose the council members and their efforts.

The flyer contained photos of a few of the actual emails between the council members, which showed their original intent. That intent was later watered down into a resolution that failed to gain the support of most of the council.

About 150 Homerites came through the Heartbeat of Homer fellowship barbecue on Saturday, a strong turnout for a community that is at the height of its tourist and fishing season. Recall organizers say they are tired, but feel good about their efforts and the response of the community.

To summarize: Three council members face recall after having exchanged emails that showed they were trying to establish Homer as a sanctuary city, where illegal immigrants could find safe haven. They worked with far-left groups outside the state to get the wording right.

Some citizens got ahold of the emails via a public records request earlier this spring, filed a recall petition, and the town has been torn apart ever since over whether those council members were acting properly and in the best interests of the city.

Some citizens feel they’ve been tricked by the three, who subsequently changed their story about their actual intent. Their original language had been crafted by a retired reporter, Hal Spence.

The council members didn’t like facing recall, so they sued to quash the election. They hired the ACLU in Anchorage to defend them, lost in court, and are now asking the city of Homer to pay the legal costs they owe Heartbeat of Homer because Heartbeat had to hire a lawyer to fight for the recall election. The losing side of that case is required to cover at least some of the legal fees of the winner.

The three council members had offered to not take the case to a higher court if the recall proponents agreed to waive the legal fee reimbursements. That didn’t fly with Heartbeat of Homer.

The drama-filled situation has drawn the interest of a reporter from the radio show This American Life, which runs weekly on NPR. The reporter landed in Homer this weekend and is staying through the voting festivities. Brian Reed, senior producer of the show, was spotted at the Heartbeat of Homer picnic on Saturday and will be developing some kind of long-form radio piece in the classic public broadcasting style, which will come out long after the election dust has settled and everyone has gone fishing. Care to guess how he’ll be portraying the recall proponents?

[Read: Smoking Gun: Homer City Council members tried to make it a sanctuary city]

Where have all the leaders gone? Long time passing

Suzanne Downing

-

June 10, 2017

1

*Gov. Bill Egan speaks at a the Governor’s Picnic in Anchorage in 1966. (Alaska State Museum Collection, UAA-hmc-0370-series15a-4-205.)*

OUR SENIOR CONTRIBUTOR LOOKS FOR SPINE IN POLITICIANS

By ART CHANCE

Hat tip to Peter, Paul, and Mary.

Let’s go back to the 1970s. Before the Prudhoe Bay lease sale, the State budget was around $250 Million. That won’t operate a single major department of State government today, even adjusted for inflation.

The State population in the 1970 Census was a little over 300,000, about the population of metro Anchorage today. Then, Anchorage had about 125, 000 people and Eagle River and Wasilla were a long drive on a bad two lane road.

Then the $968 Million for the Prudhoe Bay leases came, and then the “Oil Rush” began. People looking for jobs and opportunity flocked to Alaska.

Readers of the right age might remember that the Lower 48 pretty much sucked in the mid-’70s — the oil embargo, spiraling crime. “Dirty Harry” didn’t come from nowhere, and President Jimmy Carter’s “National Malaise” comments were plenty enough to get many people looking for somewhere, anywhere, else to be. I was among them.

In 1974 Atlanta I would have rather made the two-block walk from my business to the bank without my pants on than without my pistol, often more than one because one wasn’t enough.

I had enough money, so I sold my Mercedes and bought a Toyota Land Cruiser, put the Lower 48 in my rear view mirrors, and joined the ranks of the bearded, blue-jeaned guys looking to get by and get high in Alaska.

By 1980, Anchorage and Alaska’s population had almost doubled. Had someone been standing on a balcony at the Hotel Captain Cook threatening to jump, all anybody would have been interested in was knowing where he worked; people would be there at opening time with application in hand.

Only the very most politically aware and the old-timers, the self-anointed sourdoughs, had a clue who the political elite of Alaska were. And back then, a cheechako was the person behind you in line at the U.S.-Canada border.

*Faces of workers who built the Trans Alaska Pipeline, which was completed June 20, 1977, three years and two months after construction began. University of Alaska archives*

It was a time when somebody with a bit of drive and the ability to tell a good story could invent him/herself into pretty much whatever he or she chose to be. Many did invent themselves. The State government expanded exponentially, and the State wasn’t real scrupulous about backgrounds or qualifications as long as it could put a warm butt in a seat.

It was “The Alaska Method” — con your way into a job and see how long you could keep it.

In the 1970s, a little-known Republican state senator from Naknek (Jay Hammond) defeated a Democrat icon (Bill Egan) to become governor. Hammond had the backing of the Left side of the Alaska Democrat Party.

[Read: Reality strikes: Alaska has always been left-leaning.]

Alaska was created as a socialist state, but the Legislatures in the decade after 1974 made Alaska into a model of socialism that the Soviet Bloc could never have emulated, the Permanent Fund and the dividend being the capstone.

Among the radical ideas of the ’70s, the Permanent Fund was the most radical, and it was enacted with almost overwhelming electoral approval. Fast forward 40-odd years:

Alaska has three-quarters of a million people, about a third of whom actually work, which is pretty close to the number of people actually working in the Seventies.

None of our political systems can actually work; nobody has any airspeed, altitude, or ideas. We are imprisoned in stasis. We’re about to stumble into essentially dissolving the government of Alaska at 12:01 a.m. on July 1, 2017. Nobody can move, nobody can change.

Here’s why: Everybody in a position of power and influence in Alaska today got there by understanding the government as it is.

If anything happens to change the government as it is, those people with power and influence — our leaders — are at risk to lose that power and influence. We’re at the ultimate event horizon of socialism; the only option left is cutting the slices of the fixed pie ever thinner until the ever-thinner slices no longer satisfy the people and all Hell breaks out.

That’s where all the leaders have gone.

Right now, Alaska’s unionized public employees, or at least their leaders, have decided that the pie is theirs and they really don’t care whether the rest of Alaska gets any pie.

This will not end well. We need leaders.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon. He only writes for Must Read Alaska when he’s banned from posting on Facebook, which is often.

House Majority has lost. They just don’t know it yet.

The 907

Suzanne Downing

-

June 10, 2017

2

ANDREW JENSEN
ALASKA JOURNAL OF COMMERCE

Here’s hoping House Speaker Bryce Edgmon hasn’t gotten too attached to his gavel.

The once high-riding Democrat-led Majority in the House had a stake driven through its heart on June 5 when it was abandoned by Gov. Bill Walker, its one-time ally on raising oil taxes and bringing back a state income tax.

*Andrew Jensen, Alaska Journal of Commerce*

By immediately rejecting Walker’s compromise package that did not include an income tax, increased oil taxes or their preferred amount for the Permanent Fund Dividend, the rookie leaders of the House have set themselves up as the fall guys if the government shuts down with no budget by July 1.

It may be just posturing, as Senate President Pete Kelly mused while his caucus took a more measured and conciliatory attitude toward Walker’s proposed compromise that came down heavily in favor of its position.

Are the House Democrats really so wedded to their demand for an income tax that they are willing to push the state to the brink of a shutdown?

So far, they sound like it.

Not that it was ever a great idea to hitch their policy wagon to raising taxes on an economy in recession, but House Democrats are quickly becoming Ahab to the white whale of taxes.

With the governor now essentially aligned with the Senate on the greatest issues facing the Legislature — including its plan to pay off nearly $300 million in old oil tax credits using the Statutory Budget Reserve — the House has set itself up as the odd man out.

No doubt it must be a bitter pill to swallow considering it was just seven months ago the new Majority held a celebratory press conference following the November election as Democrats took the reins of power in the House for the first time in more than a decade.

Alaska: Richest state to ever go broke

Suzanne Downing

-

June 9, 2017

13

PERMANENT FUND REACHING HISTORIC MILESTONE

The Alaska Permanent Fund is about to make history again.

The international investment market is strong, the Fund’s portfolio is robust. On Monday, barring a weekend catastrophe, Alaska’s piggy bank will very likely top $60 billion.

For perspective, Bill Gates’ net worth is about $89 billion. We Alaskans have about 67 percent of the Gates fortune. We’ve never been richer.

Or broker, according to Gov. Bill Walker and the Democrats, who want to implement a tax up to $700 million on residents.

The Permanent Fund is making nearly 9 percent gains this year. Not bad for a little sovereign wealth fund that started with merely $734,000 in 1977.

The Earnings Reserve Account portion of the Permanent Fund is now about $11.7 billion. That’s the money that can be used to pay for state government. In addition to that fund, the government has nearly $5 billion in the Constitutional Budget Reserve, the CBR, as legislative types know it.

There are a few other accounts around state government, but those are the big chunks. Together, the State has well over $65 billion in its piggy bank, and $16 billion of it is more or less available for appropriation.

And yet, the Democrats in control of the House won’t pass a budget unless they get an income tax that would take $700 million from Alaskan families. HB 115 is their vehicle, which was designed by Governor Bill Walker’s Department of Revenue.

In his latest compromise package, the governor asked the Senate to accept a “head tax” (aka still an income tax) that would bring in $100 million.

But with the House Democrats quickly rejecting his proposed compromise, the governor is likely to ratchet up his request for taxes to something closer to what the Democrats want.

Over in the Senate, controlled by Republicans, lawmakers say no tax is needed. All that’s needed are some modest cuts and a restructuring of the Permanent Fund, per Senate Bill 26, which is the governor’s bill.

The House agrees in principle with the framework of SB26, but are holding it hostage in order to force through their taxes. The upshot is that pink slips have gone out to state workers in advance of a government shutdown on July 2.

[Read: Walker’s plan: Camel’s nose under the tent tax]

Stay tuned for Monday, when the Senate should hear back from the governor with his responses to a list of questions asked by Senate leadership that pertain to the compromise Gov. Walker is trying to reach.

Very likely, some of those answers will be unpalatable because they will involve even higher taxes than his first compromise offer of $100 million.

Senate leadership sent a letter to Gov. Walker last week asking for answers for why the governor:

Offers no spending cuts, but actually agrees to the Democrats’ $200 million increase in state spending.
Cuts down his tax request, while providing no documentation to the public as to why he needed $700 million two months ago, but only $100 million now.
Accepts a shortfall of $300 million that could be paid for with savings, even though just weeks ago he said he would not accept anything but a fully funded plan.
Shrinks the Permanent Fund dividend.
Accepts the Senate’s version of SB 26, a restructuring of the Permanent Fund.
Establishes a compromise on oil taxes, but only if he gets his “head tax” and only so long as there are no cuts to the budget.

Insiders at the Capitol say it is no secret that the governor’s head tax is a gateway tax, to get something on the books, and come back later for more. His team has told several people in the Capitol this week that the tax is just to get the infrastructure in place.

MICCICHE ON ROLE OF GOVERNMENT

Photo of Senator Peter Micciche — *Sen. Peter Micciche*

Senate Majority Leader Peter Micciche, a Republican from Soldotna, says the struggle is over the philosophies about the role of government. Democrats see government as the economy and have little concern for the private sector, he said.

“This Permanent Fund milestone proves the percent-of-market-value numbers in our SB 26 model is conservative, and doesn’t even reflect the gains made by the fund this year,” he said.

“We began this ‘fiscal gap’ discussion at the end of 2014 with a $4 billion deficit. I believe the House majority and the Administration have failed to adapt to the fact that because of increased oil production,an improved price environment and budget reductions, our deficit has been roughly halved to $2.2 billion,” Micciche said.

By using the Senate’s model, government is funded through the use of earnings of the Constitutional Budget Reserve and the Earnings Reserve Account, without consuming savings, he said.

“Considering the many layers of conservatism built into the modeling…the fact that we are not crediting the 16 percent earnings year of the Permanent Fund, increasing production, improved pricing, etc., the Senate majority feels that we are in a position to fund our government without the burden of new broad-based taxes,” Micciche said.

“Our plan provides the quickest and most economically healthy way to deliver Alaska out of this current recession; providing more private sector jobs while still preserving critical government services,” Micciche said.

DUNLEAVY SAYS TAX ISN’T NEEDED

Photo of Senator Mike Dunleavy — *Sen. Mike Dunleavy*

Sen. Mike Dunleavy of Mat-Su, has been an opponent of an income tax. He’s a Republican who no longer aligns with the Senate Republican majority because of his budget hawk approach that is stridently anti-tax.

“This has nothing to do with the budget. They don’t need a tax. They want a tax,” Dunleavy said.

“This is like begging your relatives for money and telling them you’re broke when everyone knows you aren’t broke. The public isn’t buying it. They know you can live on your savings for at least 13 years. Meanwhile, you get your other investments going, like Armstrong and Caelus (and other oil companies) and you put more oil in the pipeline.”

Dividend applicant numbers hold steady

Suzanne Downing

-

June 9, 2017

0

Some 670,407 individuals applied for the 2017 Permanent Fund dividend, according to the Alaska Permanent Fund Division. The number of applicants this year is down slightly from 2016’s applicant pool of 670,599, a difference of 192.

All eligible Alaskans who applied by the March 31 deadline will receive a dividend in October from the Permanent Fund’s investments.

In 2016, the check amount was $1,022, and for the first time in the fund’s history, the amount was set by the governor based on political considerations.

[Read: About that Permanent Fund dividend…]

Those who apply by March 31 deadline and those who are determined eligible are two different matters, but the numbers are telling: Population is holding steady. Even while there is a net migration from Alaska of workers, those who remain are filling in the population with babies, keeping the overall population stable at 739,828.

In 2015, the number of applicants was up, with 678,689 Alaskans appling for the dividend, and the royalty check itself was the largest ever to be distributed, at $2,072.

At the same time, the state was plunging into a recession, with oil patch workers leaving for jobs in other states. Net migration from Alaska over the past three years has exceeded 17,000, and anecdotal evidence from Alaska trucking companies indicate that trend continues this summer. Oil companies uncertain about the investment climate in Alaska have put projects on hold and oil field contractors see work slowing down, with many reporting the economic hit at about 20 percent.

VALUE OF P-FUND UP

The value of the Alaska Permanent Fund itself has increased since 2007, when it held $40 billion. It’s now at an all-time high, closing in on $60 billion. The earnings reserve fund, which can be used to fund state services, has about $11.7 billion.

The Alaska Permanent Fund’s investment return for the fiscal year to date was up 9 percent, according to the agency’s web site.

The fund was created through an amendment to the Alaska Constitution shortly after oil started flowing through the Trans Alaska Pipeline System. A portion of the oil money from North Slope fields is put into the fund because future generations will not have oil as a resource, and the prediction was that Alaska would need to become an investment state.

The state now earns more from investments of the Fund than it does from oil royalties. The Fund started with just $734,000 in 1977.

Governor says he ‘can’t amend’ agenda for session — huh?

Suzanne Downing

-

June 9, 2017

5

A photo of Governor Bill Walker — *Gov. Bill Walker earlier this week.*

‘IT’S NOT WITHIN MY POWER’

Gov. Bill Walker held a brief press conference today to discuss the progress of the special session and the impending shutdown of state government in nine days.

And then he did something he may live to regret.

He answered a question from KTVA reporter Liz Raines, who asked why he doesn’t limit the call of the special session to the budget. Why not take everything off the call but the budget and avoid a government shutdown?

Walker responded, “I can’t take anything off the call. My role is once I put something on the call, it stays there.”

“Once I put something on the call, it’s not within my powers to remove it from the call.” – Gov. Bill Walker

But that’s not the case.

In October of 2015, Walker did amend his call for special session. He withdrew “an act to monetize certain natural gas reserves through the levy of a gas reserves tax. This proclamation supplements my proclamation of September 24, 2015.” Apparently, amending a special session call is only legal when he wishes it to be:

INSTEAD, A PLETHORA OF NEWS RELEASES

Meanwhile, instead of narrowing his focus to passing a budget, the governor issued a series of 15 press releases from his different departments today, describing the crisis that is about to hit Alaska if government shuts down on July 2 and putting together an incident command structure for when there is no government.

A review of history shows that removing items from a call for special session is rather ordinary:

Gov. Sean Parnell removed something from a call. In 2012, he removed oil tax reform, saying the bipartisan working group in the Senate appeared “incapable of passing comprehensive oil tax reform.”

Gov. Frank Murkowski completely rescinded his call for special session.

In fact, Alaska’s strong-governor form of government gives Walker broad powers to do just about anything, including shut the government down.

Instead of saying he “can’t” take items off his call for special session, Walker might have been more transparent by saying: “I’m choosing not to take anything off the call because I need to frighten my 20,000 employees in order to get my income tax, higher oil taxes, and higher motor fuel taxes.”

Rather than transparency, we get a blizzard of press releases.

Is Juneau’s Justin Parish Alaska’s Kathy Griffin?

Suzanne Downing

-

June 8, 2017

11

Photos of comedian Kathy Griffin holding a bloody head of Donald Trump, and Juneau Rep. Justin Parish is pictured talking to the camera. — Kathy Griffin, left, posted the image of her holding Donald Trump’s bloody head. At right, Justin Parish, who described holding a gun to the heads of legislators, on a local Juneau podcast this year.

There’s something not right about Rep. Justin Parish of Juneau. He’s prone to theatrics, but has he finally gone too far?

On a Monday KINY radio talk show hosted by longtime broadcaster Pete Carran, Parish was musing about the state’s budget and his opinion of Senate President Pete Kelly, which is not high. “People don’t want to see Pete Kelly’s Alaska,” he said.

He went on to say that Republicans were terrorizing State employees.

Carran then asked Parish about his idea of changing the Alaska Constitution: If legislators don’t finish the budget within 90 days, his idea would be to prohibit them from running for their seats again. All of them.

“I think you would move the gun from the heads of almost 20,000 State workers to the heads of 60 legislators where it more rightly belongs,” Parish said.

A few minutes later in the broadcast he described Republican lawmakers in the Senate as actual terrorists:

“Ya know, it feels like I’m negotiating with someone who’s got our children and our seniors hostage, and their idea of a deal is give the oil industry of your money and we’ll only kill one of ’em,” he said.

House Minority Leader Charisse Millett was taken aback by the comments.

“This is not the way you describe your fellow lawmakers, or State workers — with imagery of a gun to our heads,” she said. “And to use the violent imagery of killing children and the elderly? He is a lawmaker. Where’s Speaker Edgmon in censuring this kind of graphic language coming from the Democrats’ caucus?”

Earlier this year, the House majority Democrats led a push to censure Rep. David Eastman for comments he made to the media, when the Republican from Wasilla speculated that some village women were using their pregnancies as a way to get a free trip to the city. Rep. Ivy Spohnolz of Anchorage was the prime mover behind the censure.

Millett, during those debates over Eastman’s censure, asked Speaker Bryce Edgmon, “What happens, Mr. Speaker, and what are you willing to do the next time someone gets up on the floor and I find something incredibly offensive? Or in committee? Will you take a stand for me? Will you censure the person that has offended me?”

[Read: Democrats target Alaska Native lawmaker]

Millett today said Parish went too far in using language that puts a gun to the heads of Alaskans, and in describing the violent killing of children and elders, analogously, by Republican state senators.

Kathy Griffin, the comedian, famously got in trouble with her commercial sponsors last week for posting on social media an image of herself holding the imaginary bloody head of President Donald Trump.

Parish, the lawmaker, painted word pictures to describe violence against Alaskans. The actions of the two are only separated by the visuals. Within a span of three minutes, Parish had three times described Republicans as terrorists in increasingly graphic terms.

The violent verbal imagery, distasteful as it is, also misses the point that the ones creating the crisis are Parish’s very own House Democrats, more so than either the Governor or the Senate. The Governor has offered a significant compromise, which was rejected immediately as “dead on arrival” by the Democrats and near-Democrats who are this year’s House majority leaders.

By contrast, the Senate credited the governor for his effort and offered to discuss it further, sending him a letter to ask for clarification of some of his ideas.

But for Parish, it’s all about the theatrical descriptions of guns to heads, the killing of the children and old folks, which drew a swift response from Tuckerman Babcock, chair of the Alaska Republican Party.

“I’ve been involved in Alaskan politics since 1978, and Juneau has a long history of electing Democrats and Republicans of stature, gravity and influence, and now they’ve elected a buffoon,” Babcock said. “Whether a Democrat or a Republican, this is the worst Juneau has ever produced.”

The interview:

What if oil spill didn’t hurt a Prince William Sound fisheries?

The 907

Suzanne Downing

-

June 8, 2017

1

Coast Guard historic photo of Exxon Valdez being towed in 1989 to Naked Island for temporary repairs. The tanker had run aground and caused an oil spill in Prince William Sound. — *A Coast Guard patrol boat crosses the bow of the Exxon Valdez as the tanker is being towed to Naked Island, Prince William Sound, Alaska, for temporary repairs, 1989. US Coast Guard photo*

OTHER REASONS SURFACE FOR HERRING DECLINE

By CRAIG MEDRED
CRAIGMEDRED.NEWS

Almost 30 years after the oil tanker Exxon Valdez hit Bligh Reef and smeared Prince William Sound with more than 11 million gallons of Alaska crude oil, a team of state and federal scientists have concluded the spill – as bad as it looked and as much impact as it had on marine mammals and birds – appears to have done no real damage to fisheries.

“We found no evidence supporting a negative EVOS (Exxon Valdez Oil Spill) impact on herring, sockeye salmon, or pink salmon productivity, and weak evidence of a slightly positive EVOS signal on Copper River Chinook (king) salmon productivity,” the study says. “It is unclear how EVOS may have impacted Chinook salmon positively.”

Somewhat surprisingly, however, the study found two non-oil spill events – one natural and one manmade – that appear to have caused significant changes in Sound fisheries. And one of them, a naturally occurring spill of fresh water, appears to be what crippled herring stocks there.

Exxon has long been blamed for the collapse of herring, which once supported a fishery worth $6 to $11 million per year, but the new study funded by the Exxon Valdez Oil Spill Trustee Council, a government entity established to track the Sound’s recovery in the wake of the spill, fingers fresh water as the real culprit.

“Herring productivity was most strongly affected by changing environmental conditions,” the study says, “specifically, freshwater discharge into the Gulf of Alaska was linked to a series of recruitment failures—before, during, and after EVOS (Exxon Valdez Oil Spill).”

And the other big factor driving significant environmental changes in the Sound?

The annual spills of hundreds of millions of pink salmon fry.

Income tax isn’t needed because this is a false crisis

Suzanne Downing

-

June 8, 2017

9

Photo of Scott Hawkins — *Scott Hawkins*

By SCOTT HAWKINS
SENIOR CONTRIBUTOR

Gov. Bill Walker and the House Democrats are promoting a false crisis in order to enact a very bad solution.

They want Alaskans to believe that the state really, really needs a personal income tax. Right now.

Although Walker recently proposed a smaller income tax and misleadingly labeled it an “education head tax,” the gambit is clear: Get the proverbial camel’s nose under the tent.

Interestingly, the plan landed with a dull thud in both the Senate and House, with House Democrats objecting that it does not go nearly far enough in taxing Alaskans.

However, the so-called crisis is entirely artificial, a ruse to grow government even larger.

[Read: Governor’s compromise: Camel’s nose under the tent plan]

The reality is that new taxes on Alaska families and businesses are entirely unnecessary. The state of Alaska has ready access to adequate funds to support state spending at roughly current levels and still pay a respectable Permanent Fund dividend. The numbers work. I’ve done the math.

IT’S SIMPLE: PASS SB 26

Here is a simple, straightforward fiscal plan:

First, pass the Senate version of Senate Bill 26, which moves Permanent Fund management to a “percent of market value” (POMV) approach to earnings withdrawal. That will deliver enough money to fund a $1,000-$1,200 dividend to all Alaskans, while providing $2 billion to support state services.

This alone closes the bulk of the fiscal deficit without new taxes.

But before final passage, SB 26 needs just one crucial amendment: Rather than setting the dividend at an arbitrary level and capping it, dedicate a portion of the POMV earnings – about 30 percent – to dividend payments, and put that in statute. This is essential in order to give Alaskans a long-term piece of the action and a rising dividend over time. It offers an upside in the future and maintains the public’s direct connection to the fund.

Adding $2 billion annually to state coffers, combined with ongoing general fund revenue of roughly that same amount, totals $4 billion. That just happens to be the agency operating budget passed by the Senate this April, which included significant but manageable cuts. Voila, problem largely solved.

As a backstop, we still have almost $5 billion in the Constitutional Budget Reserve (CBR). Drawing a modest $400 million each year from the CBR would allow for a respectable state capital budget, keeping our critical public infrastructure maintained and upgraded. At that rate, the CBR would last for well over a decade.

Next, the Legislature needs to enact a spending cap and put it before the voters. If we don’t, the next time oil prices jump up we will paint ourselves into a financial corner yet again. This is essential. I would suggest the cap be a bit lower than the status quo, trending down slowly but steadily over the next several years, and then stabilizing.

Pound for pound, we have the largest state budget in the nation by a wide margin. It is laughable to think that there is no room for moderate, responsible reductions.

Alaskans mustn’t allow themselves to be duped by a hard-left House majority and their ally in the Governor’s Office. They are trying to lay the groundwork to grow an already-large government, pure and simple. If new taxes are enacted now, they will only go up over time. You can count on it.

Moreover, taxes on the scale the House majority is calling for would be a heavy, ill-timed blow to our already-ailing state economy. There would be a fresh wave of small business closures throughout the state, accelerated job losses, reduced after-tax incomes and sharper declines in property values.

If we can avoid such unforced errors, good news is on the horizon. There have been several very large oil discoveries on the North Slope over the past couple of years. Once some of those come on line in the five- to seven-year time frame, they will cause pipeline throughput, and thus state revenue, to leap by 40 percent or more. That is truly a game changer in a good way, provided that our elected officials don’t fumble it.

The fiscal plan outlined above works. It puts us on a sustainable path, with an economic and financial upside for Alaska’s families and businesses.

Scott Hawkins is board chairman of ProsperityAlaska.org. He is president and CEO of Advanced Supply Chain International. An economist, Hawkins was the founding president of the Anchorage Economic Development Corp.

Homer gears up for recall election Tuesday

Where have all the leaders gone? Long time passing

House Majority has lost. They just don’t know it yet.

Alaska: Richest state to ever go broke

Dividend applicant numbers hold steady

Governor says he ‘can’t amend’ agenda for session — huh?

Is Juneau’s Justin Parish Alaska’s Kathy Griffin?

What if oil spill didn’t hurt a Prince William Sound fisheries?

Income tax isn’t needed because this is a false crisis

About us

The latest

NPR, PBS defunded in final House vote. Trump signature is next

Murkowski on the war path over public broadcasting cuts

Michael Tavoliero: Alaska’s real education crisis is a broken system, not a broken budget