Paul Seaton at his Kachemak City home.

Paul Seaton at his Kachemak City home.

Point of View: Focusing on revenue

  • By Paul Seaton
  • Thursday, October 5, 2017 11:27am
  • News

On Oct. 5 I will be holding town hall meetings in Ninilchik (Senior Center noon to 2 p.m.) and Homer (Islands and Ocean Center 7-9 p.m.) to meet with you, and to gather constituent input on the state budget. Director Pat Pitney of the Governor’s Office of Management and Budget will be joining me at both meetings to answer questions and listen to your comments. The budget has been the primary focus of the Legislature this past session as we no longer have sufficient Constitutional Budget Reserve savings to get us past the next fiscal year. We are out of time. Policy decisions need to be agreed upon now so the administration has time to implement new revenue structures prior to our savings running out.

The Governor has called the legislature back into a 4th special session this fall to consider a broad-based tax as one component to an overall strategy of shoring up our finances. This is necessary since Alaska still has no sustainable fiscal plan in place. This past session the Legislature addressed oil and gas tax credits, but other revenue generating bills such as HB 115 (2.5 percent to 7 percent State Income Tax), SB 26 (Permanent Fund Restructuring Act), and HB 60 (Motor Fuels Tax) did not make it through both bodies. There is no silver bullet solution; any plan that addresses the deficit will need to include several different components. In order to have a long term sustainable fiscal plan, we will need to restructure the permanent fund to ensure an annual dividend while using a sustainable amount of the reserves for annual state operations. We will need new revenue from a broad based tax – such as an income, employment, or a sales tax. We will need to continue to identify smart budget cuts, and continue with oil production tax reform so that the state receives its fair share from its resources.

With the drop in oil price and production, our state petroleum revenue has dropped from $9.9 billion in Fiscal Year 2012 to $1.6 billion in Fiscal Year 2017. With an overall Unrestricted General Fund (UGF) operating budget of $4.3 billion (not including PFDs), clearly budget cuts alone will not fix the problem. Oil still needs to be part of any solution, but it can no longer be the only solution. We need new and diversified revenues to grow our economy and lessen our reliance on the volatility of oil.

In these upcoming town halls we will focus on how we can generate the necessary revenue to continue providing priority services like public safety and education. Unfortunately by delaying action during the past several years, we have limited our options for moving forward. No single revenue stream can close the budget gap in a sustainable manner — it is going to take a combined effort. I would like your input. What kind of revenue sources would you like the state to explore? What are your questions or concerns about the proposed options? What choice do you feel would have the least impact on individual Alaskans and families like you?

During the upcoming 2018 legislative session each department will be reviewed by the finance budget subcommittees. If you have detailed questions or suggestions about the budget for a particular department, please contact my staff at 235-2921. They will help connect you to the chair of the proper budget subcommittee.

If you haven’t already, visit my home page at for information on revenue options passed by the Alaska House Majority Coalition this past year.

Thank you for helping us work towards a sustainable future. This is not an easy conversation but it is a necessary one. Our future and our children’s future will be impacted by the decisions we make today. Please stay engaged as the process moves forward. Through discussion and cooperation I am hopeful we will find the solution that best fits Alaska. I look forward to meeting with you on October 5th.

Meetings: Oct. 5, Ninilchik Senior Center noon t0 2 p.m., and Homer Islands and Ocean Visitor Center 7-9 p.m. More information call: 235-2921; toll free 800-665-2689 or email


Representative Paul Seaton

District 31 Alaska State Legislature

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