December 15, 2015
716 W 4th Suite 409
Anchorage, AK 99501
State Capitol, Rm 419
Juneau, AK 99801
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Dear Friends and Neighbors,
Governor’s Fiscal Plan
First off, we clearly need to do something about our deficit. After seeing that our new oil tax structure is not leading to increased oil production, and in fact, with oil production plummeting to 311,000 by 2025, I have been proposing changes for several years. And last year Rep. Les Gara and I proposed emergency legislation to fix our broken oil tax credit system that has the state paying out $642 million more in oil tax credits than we get in production taxes. When the Republican majority failed to hear our bill, we ran numerous amendments to cut an additional $750 million from the budget. Unfortunately, the majority voted against every single one of these amendments.
Senator Wielechowski volunteers at the Salvation Army Food, Toy, and Clothing Drive at Sullivan Arena
While I applaud Gov. Walker for starting the conversation on a fiscal plan, the plan being proposed puts the overwhelming burden of balancing the budget on the middle class and lower income families. For example, a family of four making $50,000, about the average for an Alaskan family, will lose approximately $4,500, or 9% of their income while a millionaire will lose approximately 1.8% of theirs.
As for the oil industry majors, as oil prices go up just a bit, they will have very little or no increased taxes, despite broken promises of increased oil production. As a legislator who represents a working class district, I can't support balancing the budget in large part on the backs of the poor and working class, especially when others aren't paying their fair share.
Furthermore, the Governor is cutting numerous essential services that are important to many of my constituents, like all pre-K and early education, all state heating assistance, $15 million from University funding and more. So we end up paying a whole lot more and getting a lot less.
What's my solution? I believe we can significantly cut our deficit by simply eliminating much of the corporate welfare and tax breaks we provide industry. During the SB 21 referendum the oil industry spent tens of millions to convince Alaskans we need an oil tax structure like North Dakota's. Now our royalty and tax structure are bringing in $2 billion LESS than if we had North Dakota's structure. By eliminating most oil tax credits - without even touching the tax rate - we gain $1-2 billion per year. By eliminating unnecessary refinery tax credits, we gain up to $30 million per year. There are numerous wasteful Divisions that could be cut - the Commercial Fisheries Entry Commission has 5 attorneys and 30 staff, yet processed only about 3-5 permits in each of the last few years. An audit shows we could cut nearly $1 million per year there. There are public corporations that are paying numerous middle-level staff over $250,000 per year. There is millions of savings there. The Anchorage LIO is a waste of $4 million per year, the Bragaw Extension is $20 million. Billions for nice, yet unnecessary megaprojects. The list goes on.
Fortunately, we have billions in savings still, so we have some cushion. But the time to act is now.
Senator Wielechowski and Rep. LeDoux talk about the Muldoon Channelization Project with Northeast Community Council Members
See You Wednesday!
I hope you can find some time in your busy holiday schedule to join me, Governor Walker, and Reps. Gruenberg and LeDoux for a town hall meeting this Wednesday, December 16th at Creekside Park Elementary School from 6:30pm to 8pm. We’ll be discussing the state’s fiscal situation, the gasline and local East Anchorage concerns, like the Muldoon Rd. changes.
When: Wednesday, December 16th, 2015
6:30pm to 8pm
Where: Creekside Park Elementary School
7500 E 6th Avenue, Anchorage
What: Town Hall Meeting
With Senator Wielechowski, Governor
Walker, Reps. LeDoux & Gruenberg, and
Department of Transportation
Commissioner Mark Luiken
Hope to see you there!
UMED Northern Access Road
As you may have heard last week, Mayor Berkowitz announced that he would be cancelling the UMED Northern Access Road that would have extended Bragaw through the University to Tudor.
Senator Wielechowski and Rep. Gruenberg with Anchorage Assembly members Pete Petersen and Paul Honeman at the Riviera Terrace Neighborhood Meeting
This plan has been rejected for decades by the Russian Jack and University Area Community Councils because of traffic concerns. At over $20 million for six tenths of a mile, it also would have likely been the most expensive road in Alaska.
You are always welcome to contact me directly with thoughts, ideas and concerns. I am here to represent you!
Alaska State Senator
District H - Anchorage