HAVEN’T WE CUT ENOUGH? ISN’T IT TIME TO PONY UP TAXES?
BY SEN. SHELLEY HUGHES
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.