- Associated Press - Monday, June 12, 2017

Here is a sampling of Alaska editorials:

June 10, 2017

Ketchikan Daily News: Time to act

Alaska has $59.8 billion in its permanent fund and yet the state is in a financial predicament.

It also has a $2.5 billion operating budget deficit.

In other words, it’s spending more than is budgeted.

That’s like an Alaskan with $59,000 in a savings account spending $2,000 more than comes in paychecks during the year.

This is a very simplified view, and the state has rules on the disbursement of the Alaska Permanent Fund and its other revenue that complicate the situation.

But most Alaskans in such a financial situation would reduce other spending by $2,000, increase income or draw down on savings if they wanted to continue to afford the goods and services paid for by that two grand.

Gov. Bill Walker’s administration announced late this week it had begun preparing for a state government shutdown because, despite almost six months in sessions, the Legislature hasn’t passed a 2018 budget.

About a dozen state departments this week sent out information regarding what services would continue under an emergency situation prompted by a shutdown and which would cease.

Services related to public safety would continue, but Alaskans can look at the list of services in jeopardy during a shutdown. While most of the services are necessary for one Alaskan or another, or the well-being of Alaska, possible cutting opportunities might become apparent under review.

If further cuts are to be made, the Legislature should cut quickly out of respect for the state workforce, allowing the remaining employees to provide the services most valued by Alaskans. Departing employees should be given as much notice as possible in order to take advantage of other employment opportunities.

The Legislature, at this juncture, also might pass at least a pared-down budget in order to allow the least disruption to state operations. The Legislature set a precedent for this in 2015 when another shutdown loomed.

Walker hopes the Democrat-controlled House and Republican-dominated Senate will come up with a budget before a shutdown at the start of the next fiscal year July 1.

Legislative leadership contends it continues to work toward a budget.

This is lawmakers’ best chance to agree on a path going forward in regard to the deficit. Next year will be an election year; typically those aren’t the most productive when it comes to financial decisions affecting constituents’ pocketbooks, for example, implementing a state income tax as proposed by the House, or even reducing the permanent fund payouts as both bodies have suggested.

Three weeks is plenty of time to prevent a full-blown shutdown.

___

June 7, 2017

Alaska Journal of Commerce: House Majority has lost. They just don’t know it yet.

Here’s hoping House Speaker Bryce Edgmon hasn’t gotten too attached to his gavel.

The once high-riding Democrat-led Majority in the House had a stake driven through its heart on June 5 when it was abandoned by Gov. Bill Walker, its one-time ally on raising oil taxes and bringing back a state income tax.

By immediately rejecting Walker’s compromise package that did not include an income tax, increased oil taxes or their preferred amount for the Permanent Fund Dividend, the rookie leaders of the House have set themselves up as the fall guys if the government shuts down with no budget by July 1.

It may be just posturing, as Senate President Pete Kelly mused while his caucus took a more measured and conciliatory attitude toward Walker’s proposed compromise that came down heavily in favor of its position.

Are the House Democrats really so wedded to their demand for an income tax that they are willing to push the state to the brink of a shutdown?

So far, they sound like it.

Not that it was ever a great idea to hitch their policy wagon to raising taxes on an economy in recession, but House Democrats are quickly becoming Ahab to the white whale of taxes.

With the governor now essentially aligned with the Senate on the greatest issues facing the Legislature - including its plan to pay off nearly $300 million in old oil tax credits using the Statutory Budget Reserve - the House has set itself up as the odd man out.

No doubt it must be a bitter pill to swallow considering it was just seven months ago the new Majority held a celebratory press conference following the November election as Democrats took the reins of power in the House for the first time in more than a decade.

However, the Democrats have no one to blame but themselves for their current predicament.

They overreached by ratcheting up their usual attacks on the oil industry with a bill to double and triple effective tax rates between $50 and $75 per barrel, refused to cut the budget by any measure, set up an overly generous PFD and attempted to pay for it by extracting $700 million per year from Alaskans’ paychecks.

The House proposals would be disastrous for the economy and it appears clear that the Senate Majority won over the governor when we heard Revenue Commissioner Randall Hoffbeck essentially repeat the Senate talking point that the House income tax proposal could end up overfunding government and therefore remove incentives to spending restraint.

Who knows what ultimately won over the governor on oil taxes and credits, but two events in the prior week may have played a part.

First there was Interior Secretary Ryan Zinke doing more for Arctic oil development with a stroke of a pen than Walker has accomplished halfway through his third year in office.

Then there was the announcement by Caelus Energy that it was postponing its appraisal well at Smith Bay for this winter based partly on low oil prices and partly on the uncertainty about what the rules will be for tax incentives and the hundreds of millions in unpaid credits of which the company is owed at least $100 million.

There has been plenty of fallout from the governor’s veto of $630 million worth of credit appropriations in the past two budgets, but this was a highly visible and hardly encouraging development.

What we learned June 5 is that the governor has been listening, and that the House still has its ideological earplugs in.

___

June 11, 2017

Fairbanks Daily News-Miner: State shutdown not an option

Before last week, Alaskans knew a government shutdown would be bad for the state. Last week, they found out how bad. As the Legislature continued to dicker about a fiscal solution with little sign of progress, leaders of state departments on Thursday released statements explaining the likely consequence of a shutdown. The list of services affected is long and the agencies affected are broad. If legislators don’t have a budget in place before July 1, thousands of state employees - and hundreds of thousands of Alaskans and visitors relying on state services - will suffer for their inaction. It’s time to make a deal.

Gov. Bill Walker tried to get the week started with a conciliatory tone, rolling out a compromise between the Senate and House approaches to closing the state’s multibillion-dollar fiscal gap. The attempt at finding middle ground lasted less than a day, with members of the bipartisan House majority caucus declaring the governor’s approach dead on arrival. It’s true that the governor’s compromise favored the Senate on more items than the House - it adopted the House’s operating budget but took the Senate’s positions on several other items, such as restructuring of the Alaska Permanent Fund’s earnings and the bulk of oil tax issues. Still, dismissing the governor’s proposal out of hand as House leaders did was unhelpful in furthering discussion that could lead to a compromise.

You don’t have to look far to see where a government shutdown is likely to affect you. All payments to state vendors and leaseholders could stop, for instance. Among other things, this would affect and potentially bring to a halt construction projects on roads and buildings across the state. Workers for contractors wouldn’t get paid and the state might have to forfeit millions of dollars in federal matching funds for the projects. The state’s 10 ferries, busy hauling residents and visitors along the state’s coast, would be threatened with shutdown, potentially stranding thousands far from home and creating huge logistical headaches. And the Department of Fish and Game, unable to monitor fisheries, might have to institute emergency closures, threatening one of the state’s biggest industries in coastal communities.

Other state functions would also likely cease for the duration of the shutdown. The Department of Motor Vehicles likely wouldn’t be able to issue driver’s licenses and vehicle registrations. The Bureau of Vital Statistics might not be able to process marriage licenses.

And other consequences would inflict more pain on Alaska’s reeling economy. State law requires that employees cash in all personal leave in the event of a shutdown, meaning an immediate $150 million payout from state savings to highly skilled workers who might be forced to look for jobs elsewhere to feed their families. And a shutdown would almost certainly lead to a downgrade in the state’s bond rating, making it substantially more expensive for Alaska to borrow money and driving up the cost of doing business.

A shutdown is not an option. A compromise and a plan to balance the state budget are absolute necessities before July 1. Holding state employees and other Alaskans hostage as they consider the impacts to themselves and their families is unconscionable. The right time to pass a budget was more than a month ago. The second-best time is today. Legislators need to knuckle down and pass a plan.


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