A Call for Stability and Sustainability

by Speaker of the House Bryce Edgmon

On any given day in the Speaker’s office I might meet with as many as 10 different business associations, local governments, organizations, or individuals—people involved in fisheries or trucking, tourism or tribal councils, oil & gas or education. More and more, these Alaskans are bringing me the same simple message: “We need to return stability and sustainability to our economy, and it has to happen as soon as possible.”

The state’s fiscal crisis has lasted too long, and the longer it remains unsolved, the more it sidelines Alaska’s progress. For too many of our cities, towns, villages, and schools, as well as businesses large and small, planning has become all but impossible. Investments have been put on hold or put Outside. It’s as though the future has been put on the back burner.

Appropriately, Alaskans are calling for action with increasing urgency. Last Thursday I received the following statement from the Alaska Federation of Natives:

At its quarterly board meeting yesterday, the board of directors of the Alaska Federation of Natives, the state’s largest statewide Native organization, fortified its position on the state’s fiscal crisis. AFN strongly urges the Alaska State Legislature to pass a comprehensive solution to the state fiscal crisis in the 30th Legislative Session. As part of a comprehensive solution AFN supports the creation of an income tax, but adamantly opposes any regressive taxes, such as a sales tax, that would unfairly burden rural Alaska.

“The Walker administration, along with many Alaskan economists, has repeatedly stressed the urgency of a fiscal solution this year,” said Julie Kitka, AFN President. “We join the governor in demanding that our legislators get the job done now and not push it down the line where the crisis will cripple our state’s economy.”

AFN recognizes that a fair solution spreads the burden among all Alaskans while maintaining the state’s constitutional obligations and responsibilities to its citizens. No single fix on its own will eliminate the huge budget deficit, and each impacts the economy and groups of people differently. A sustainable budget going forward should include new revenues such as an income tax, smart restructuring of the Permanent Fund Earnings Reserve while ensuring continued dividends, and precise budget cuts that don’t disproportionately impact our rural Alaska communities.

When it comes to my goals for this legislative session, I could hardly have said it better myself. The cornerstone bills put forward by the House Majority Coalition include:

•HB 115, which restructures the Earnings Reserve Account in a way that helps pay for essential services while protecting PFDs, growing the Permanent Fund, and raising new revenues through a modest income tax that still leaves us among the lowest-taxed states in the Union.

•The Operating Budget that the House Finance Committee will finalize next week reduces spending as carefully as possible to safeguard the education of our kids, the security of our communities, and development of our economies.

•HB 111, the Oil & Gas tax credit bill, that further cuts state spending by scaling back unsustainable tax credit payments to oil companies on the North Slope. By making the program sustainable, this gives certainty to industry while continuing to incentivize exploration and development.

The point of all these measures is to close the $3 billion fiscal gap once and for all and restore strength and resiliency to our state. Transitioning Alaska to more diversified and stable sources of revenue promises enormous long-term benefits. After decades on “the boom and bust rollercoaster,” Alaska communities and businesses will finally enjoy the kind of stability and sustainability that leads to lasting prosperity.