I’m guessing you underestimate the angst of your legislators right now. They are engaged in complex and frustrating annual budget manipulations and their options are awful. Believe it or not, very few legislators simply ignore voter demands to reduce spending — rather, they are forced to “balance” them against even stronger demands to spend! The perceived job description and power of an Alaska legislator are warped compared to what we learned in ‘Civics 101’. The “warp” results from living in an intentionally created “administrative” state where executive and judicial branches are on “steroids” at the expense of an anemic legislature! This becomes obvious when you consider the “legitimate” fiscal influence of the Courts, the Department of Law, Administrative “law” (regulations), lobbying power, and “legal opinions”, all sourced in the Administrative and Judicial branches. The power to appropriate money has actually been legally perverted in Alaska.
Another complication: Alaskan voters almost never vote for a legislator based on what tax he or she may impose! Rather, selection is primarily based on what they will fund! The painful realization that budget revenue must be taken from us (as taxes) is suppressed unlike any other State! Media “heats up” when interest groups line up in opposition to compete for funding with armies of advocates. None of us like to admit we NEED the dynamics of legislators defending tax legislation! But without it, we cannot realistically define what we “need” to spend public money on. What one “needs” to eat, for example, changes depending on whether hunger must be dealt with for a dollar or with hundred-dollar bill. For example, our compassionate expenditures for children’s education or senior’s retirement programs, have stubbornly continued to grow in spite of good intentions to be frugal. It has not been very convincing for a legislator to say “no, we cannot afford it” when Alaska’s government was constitutionally funded copiously by the one novel granddaddy constitutional “tax” we all seem to have forgotten! 80% of all revenue generated from our natural resources is directly routed into the State checkbook balance. The traditional legislative power to tax is still in the Constitution, probably because it was ratified before the influx of billions and billions from oil sales! We have spent freely for over 40 years! Legislative “duty” simply has not included the burdensome job of levying taxes on citizens to pay for what government spends. Campaign promises to “not support new taxes” are hollow indeed! Now, impossibly high tax loads cannot be imposed to sustain services.
Even more hollow is the tragic belief our savings will get us through! It will instead make our problem worse because it will further obscure where it comes from. It is a terrible option because it expands the “granddaddy” tax by taking the earnings from the restricted 20%, the Permanent Fund — ironically— money set aside to prevent it from being similarly consumed by budget spending. Budget politics has already permitted the “boring of a drain hole” in the Permanent Fund earnings account. Laws, traditions, and policies all combine to prevent legislators from cutting spending to avoid bankruptcy! Every penny transformed directly into budget revenue reduces our chances of getting through this. If the 16+ Billion goes up for grabs, Alaska’s prosperity from government spending will only get a temporary, comparatively short, extension until it too is gone. If you doubt me, tune in to the weight of the demands of credible doctors, teachers, social workers, state employees, government contractors… all ‘mining’ for state dollars because it is the thing to do — it pays off! Each identity group cannot avoid/resist fighting selfishly for its own cause.
A solution is obvious even if it is a “long shot” politically: Immediate passage of a statute or constitutional amendment to clarify ownership of the PF would properly re-define the fight once and for all: The 20% Permanent Fund, and ALL of the earnings from investment of the PF, must be banned from becoming mere budget revenue. It must be clearly destined to become real property for Alaskans (PFDs). At the same time, we need a “tax” law enabling the legislature to “claw back” (keep) what they dare (a tax) to get us past the crisis and find a proper level of limited government spending determined by the real values of the voters (PFD “owners”). Once the budget is balanced and debts are paid, the offensive “clawback” (tax) would be appropriately moderated politically. PFDs could continue to be generated at a sustainable rate according to the trust model that inspired it. Any professional financial manager can confirm we now have the potential for continuing, much larger, PFDs applying current standards for investment. PFD “check stubs” would confirm who “owns” money in question, and, how much the government keeps for the budget… keeping everyone honest. This is not magic or impossible. If it seems that way, it is only because of the false “normal” we have settled into!
This was also submitted as an article to The People’s Paper.