FOR IMMEDIATE RELEASE
December 9, 2015
Senate Democrats Concerned Governor’s Fiscal Plan
Unfairly Targets Working Families
ANCHORAGE — While the Senate Democratic Caucus, agrees with the governor’s sense of urgency, and the wisdom and necessity of charting a new and sustainable fiscal plan for the state, it is disappointed with the specifics of the plan the Governor announced today.
“Any budget is a balancing act between keeping spending in check, and maintaining needed government services. Budgets also reflect values, and the governor’s plan falls far short of the values embraced by Alaskans,” said Senate Minority Leader Berta Gardner (D-Anchorage). “Further cuts to education especially those impacting pre-K programs that we know improve educational outcomes for kids, and cuts to the already beleaguered university system rob Alaskans of our ability to maximize the potential of future generations. Education is not a disposable value.”
Alaska’s working families will also be hit hard if this plan moves forward. The governor’s intent to slash the dividend will deal a harsh blow to the average Alaskan’s pocketbook. With the addition of a proposed state income tax, a working family of four making $50,000 can expect to lose a full 10% of their income, whereas a family of four making $10 million dollars loses only 2%.
“The oil companies, and the wealthiest Alaskans will be thrilled with this proposal because ¾ of what the government takes will come from hard-working Alaskans, many of whom rely on their permanent fund checks to cover the basics,” said Sen. Bill Wielechowski (D-Anchorage). “The whole plan is skewed to have the least impact on the rich and powerful, while dumping the burden on those who can least afford it. This is a reverse-Robin Hood plan that robs from those who need, and spares the rich.”
Right now the State of Alaska is one of the largest investors on the North Slope, footing the bill for 60-80% of exploration costs, and 50% of development costs, while getting very little for our efforts. Alaska’s oil tax floor of 4% is among the lowest in the world, and we lack the progressivity that would help us share in the profitability we’ve helped create.
A permanent fund cut in half, and based upon the amount of royalty payment for oil and gas, in a structure that makes clear we are not likely to see increases in the development of our resources is a recipe for disaster.
We can’t ask Alaskans to write checks and bear this financial burden until we are confident that the tax system for our resources is working for the maximum benefit of the people.
“I think we all agree with the governor that something needs to be done, and done quickly,” said Sen. Donald Olson (D-Golovin). “I’m happy he took the lead on this, but frankly I am concerned with the specifics of this plan. I’m hopeful that we can come together as a legislature to shift the burden from the working folks to those who can afford it, because I just don’t see how we can institute this plan without causing unacceptable hardship to the majority of Alaskans.”
For more information contact Jeanne Devon, Senate Democratic Caucus Press Secretary 907-269-0173.