Commissioner Hoffbeck in 2015, screenshot from 360north.org
BUT COULD THEY?
It was Wednesday, and Alaska Commissioner of Revenue Randy Hoffbeck was once again explaining to legislators how any further budget reductions — any at all — would hurt communities in Alaska.
That’s because cuts would require local communities to pick up the costs of services the State would be forced to abandon. And not all communities are created equal, he inferred. Some just cannot support themselves.
Cuts roll down hill, Hoffbeck said to the House Finance Committee, and the further they roll, the fewer the resources there are to pay for services.
The Walker Administration is all done cutting, he reiterated to the Democrat-dominated committee. “The price has been paid. We need to start talking about revenues.”
Gov. Bill Walker was also all done cutting last year — before he cut Permanent Fund dividends in half and axed cash owed to oil explorers — but we’ll leave that for another day.
Hoffbeck’s proof that “draconian” cuts were ahead was found in a handout that showed all the monies the state sends to communities, including the food stamp program (SNAP) and the WIC program, which is a food subsidy program specifically for pregnant women, new mothers, infants, and children.
These programs for needy Alaskans could be cut next, he said.
For example, according to Hoffbeck’s handout, Bethel residents receive $20.5 million worth of SNAP — also known as food stamps — assistance each year, and $4.3 million in WIC funds, for a total of $24.8 million in food assistance for a community of not quite 6,500 people. That’s a substantial flow of cash into the regional hub.
IMAGINARY MONSTER
The real problem with Hoffbeck’s presentation is not so much that it shows how food subsidies in Alaska prop up rural communities, but that he neglected to note the food subsidy is all federal tax dollars passing through the state on the way to individuals and families. The state is merely a middle man that processes applications.
Alaska does pay for half of the cost of administering the program, a cost that could be reduced by, for instance, streamlining what is now a 21-page application that must be submitted by mail.
FOOD STAMPS, DATA POINTS, CREDIBILITY
In Hoffbeck’s presentation, nearly half of the $45 million in funds shown in the slide on Bethel are food stamp or WIC benefits.
Since he used Bethel as an example, it’s worth taking a look at the numbers he provided.
If Hoffbeck is accurate, between food stamps and WIC payments, Bethel residents receive an average of $3,815 per person, per year, or $73 each week in federally funded food assistance. This doesn’t include the free breakfast and lunch program provided through the schools or other forms of food assistance through tribes and nonprofits.
It’s notable that in Fairbanks, with its population 10 times the size of Bethel, food stamp and WIC receipts are just $18.6 million. Bethel is making bank on SNAP.
Anchorage, to compare, brings in $56.4 million in food stamps and WIC, double the receipts to Bethel, which has 2 percent of the population of Anchorage.
According to the state’s own reporting, food stamp enrollment has increased by more than 60 percent in recent years, and it is a stated goal of the Department of Health and Social Services to increase those numbers. After all, it’s free money from federal taxpayers.
HOLDING FOOD STAMPS HOSTAGE FOR TAXES
When Gov. Bill Walker, through his commissioner, tries to game legislators and the public by pretending food stamps will be cut and families will starve, he risks his already-fragile credibility.
Hoffbeck started his presentation as a preacher would, by telling a story about time he spent with a professor from the University of Potsdam, Germany, discussing how decision makers face tough choices and the wrath of a public that may not understand the depth of an impending crisis. Countering misinformation is key, he said.
“One of the things he [the professor] has found that is critical in helping this decision-making process going forward is having the best information possible out there so as decision makers make the decision, the public is aware as much as possible as to the reason behind the particular decisions being made.”
In other words, give the public the best information.
“One thing we need to deal with is this idea is we need to cut first before we need to [make] any other decision. The assumption is that cuts haven’t been made,” Hoffbeck said. “That’s far from the reality of what we’re facing now.”
After going through the top-level cuts, Hoffbeck asked: “Where do you go next? The next category is these direct payments to recipients.”
Then he queued up the food stamps and WIC payments as at risk.
“Those are the kind of things that are on the table next and it really gets to the question of what do we want the state to look like going forward. Just because the state stops funding a program doesn’t mean the need goes away. The need for services remains, or may even be greater. One indisputable fact is that cuts roll downhill…every time you step down further there are less resources available,” he said, unaware that he was arguing mainly for greater income redistribution.
Hoffbeck acknowledged that Alaskans have said repeatedly they wanted more cuts before the administration comes to them for money.
“The price has been paid. Those cuts have been made and its time to start talking about other sources of revenue to close the fiscal gap entirely,” he said. “The governor has said in his State of the State address…it is time to move beyond the visionless exercise of budget cutting to achieve predetermined cost savings without consideration of the impact and cost that the cuts make on society as a whole. We need to start thinking about how to start building Alaska instead of pitting groups against each other, essentially tearing the state apart cut by cut. We need to do better than that.”
No one on the committee asked Hoffbeck to explain how federally funded food stamps could be cut, but Rep. Les Gara, D-Anchorage, said to the committee that he had been speaking to a Republican lawmaker and, without naming the colleague said, “The two of us are just done with — in our view — the sound bite that you can cut a lot more from the budget.”
Gara, who has also pushed for higher taxes on oil, went on to argue that cutting more of the budget would eliminate state jobs, and that would have a negative impact on the economy, possibly sinking the state into a recession that would last for years to come.
“Massively cutting State services, we have heard, every $100 million in cuts from now on is another 1,000 to 1,500 jobs we lose. That’s a ten-year recession,” he said. Actually, it is not, Rep. Gara. It is only 10-15% of the mostly private sector jobs that have already been lost in the past two years.
The state currently employs 245 full-time workers for every 10,000 Alaskans, according to Governing Magazine, which is among the highest in the nation.
That’s one State worker for every 40 Alaskans, for a total of 18,000 State workers, a number that varies somewhat depending on whether you count university employees.
Commissioner Hoffbeck’s testimony is an Alaskan version of what the feds call “The Washington Monument Game”. This term harkens back to the days when the U.S. Park Service, in response to any budget cuts, would claim that it could no longer afford to keep the lights on in the Washington Monument in WA DC. With the Monument shuttered for a time, pressure would build on Congress to reverse the budget cuts.
The Washington Monument game is actually rather tame compared to Commissioner Hoffbeck’s thoroughly false claims about the need to eliminate federally funded food assistance programs in the event of further state budget cuts.