Legislators should not run from fire
As governor, I enjoy shaking a lot of hands. But one handshake in particular stuck with me. At the Ted Stevens Anchorage International Airport last winter, as passengers streamed off the flight from Fairbanks, one man turned around and walked toward me.
“I want to shake your hand,” he said. “When there’s a fire, most people run from it. I’m glad we have a governor who runs toward the fire.”
With my announcement to reduce this year’s permanent fund dividend, I put every Alaskan on the frontline to fight the fire that threatens the future of our great state. I did not make a single veto decision lightly. I disliked them all. I especially struggled with the cuts to education spending, which Lt. Gov. Byron Mallott and I prioritized long before taking office.
When lawmakers passed budget bills funded entirely out of savings, I had no choice but to exercise my veto authority. Paying for government with savings is like eating the seed corn for one last meal rather than planting it so it grows and feeds our family for generations.
My team and I introduced in December a balanced plan to fairly distribute the burden across the state. The Senate demonstrated leadership in passing the Permanent Fund Protection Act, the cornerstone for a sustainable future. Aside from that, legislators did not pass a single revenue measure of the fiscal plan.
During the 149 days legislators were in regular, extended and special sessions, they reduced $400 million of a $4 billion problem. Ninety percent of the work was left undone.
The top three excuses:
• Some Republicans told me government needs to be cut more before the Permanent Fund is restructured.
• Some Democrats told me credits to oil companies need to be reduced before the Permanent Fund is restructured.
• Legislators on both sides of the aisle told me they did not want to take the political heat for reducing permanent fund dividends.
I have now done that work — by vetoing oil credits, stopping megaprojects and cutting more from department budgets (most have now taken at least 20 percent cuts). And by setting this year’s PFD at $1,000, the political heat is now all on me.
What most Alaskans don’t understand is the PFD program will go away entirely in less than four years if the Permanent Fund is not restructured. Meanwhile, the state teeters on a fiscal cliff.
Some House members have confessed to me in private meetings they know that voting for the fiscal plan is the right thing to do, but feared not getting re-elected if they voted to reduce PFD amounts.
According to a Rasmuson Foundation poll, 68 percent of Alaskans find a $1,000 PFD acceptable. Many Alaskans have told me what they want more than a dividend is a sustainable future full of opportunities for their children and grandchildren.
Each day that we wait to take action to enact a sustainable plan further extends the cloud of uncertainty as ratings agencies downgrade our credit, home values depreciate and investment dries up.
Each year of delay means the amount needed from potential income taxes doubles. A 1-percent income tax would raise $200 million this year. But if legislators fail to take action this year, the rate doubles to 2 percent to make up for what we lose in investment returns by spending our savings.
Just as the entire early community of Metlakatla would come together to pull on the rope to remove tree stumps that obstructed growth, we as Alaskans must all pull together to remove the obstacles for a sustainable future.
With my veto pen, I made significant budget cuts —beyond what the legislature cut. But cuts alone won’t solve the problem. The legislature must pass the full fiscal plan for a sustainable future — and to avoid even deeper cuts next year.
We cannot grow Alaska if we are not able to balance our checkbook. This year, we must fix Alaska so that next year we can build Alaska.
The collective fate of more than 730,000 Alaskans’ future rests solely in the hands of 60 men and women, who were elected to lead the state in good times and bad.
Legislators, Alaskans are counting on you to find your place on the rope. I urge you not to run from the fire.
Gov. Bill Walker and Lt. Gov. Byron Mallott took office in December of 2014 as the first non-partisan administration in Alaska history.