Alaska at a crossroads

The march goes on toward the end of this year’s multiple legislative sessions but there is no end in sight to the state’s fiscal adventures.

It seems certain that a sizable draw will be made from the Alaska Permanent Fund this year but the amount of that grab remains unclear.

After those necessary decisions are made, the need for new revenues will certainly be obvious, but the Legislature might or might not be able to hold that question for another day.

The most likely source of new money to fund state operations and pay a dividend to all residents would seem to be a state personal income tax. But, if it comes down to what seems most likely, passing an income tax in part to pay a dividend seems ridiculous if not out of the question.

Of course the Legislature is unlikely to pass an income tax. That question would probably be decided by the voters but before such a measure could pass the voters would have to be sold on the idea. And right now the average voter seems likely to ask: “Are you kidding?”

The coming of age that lies ahead has been on the distant horizon ever since we did away with the Alaska income tax in 1980. That was done because we could, because enough royalty and tax money was coming from the North Slope oil fields that dipping into our own pockets was unnecessary.

In the meantime a sizable draw from our $70 billion in Permanent Fund savings will be made this year and the size of that tranche will be determined by what the fund rules allow.

I’m pretty sure we can forget about a serious effort by our legislators to enact an income tax anytime soon, but it is obvious that new revenues are going to be needed in the future and a personal income tax seems the most likely route when the time comes.

A sizable portion of state money already comes from oil and gas royalties and that is augmented by the corporate income tax. Tapping our personal wallets seems like one of the next most likely ways to go.

Drawing down the Permanent Fund is a complicated business and there are finite limits on how much of a tap can be made. That $70 billion is a marvelous nest egg to have available and we have that because of the foresight of the political leaders — and the voters — who weighed in on the issue back in the day.

Of course we had more billions pouring into the state treasury in those days than our political leaders could spend. But those leaders and the voters of the time deserve credit for making what were certainly some very wise decisions.

The notion of spending big and satisfying some grandiose ambitions were certainly on many minds at the time, especially with those who wanted to be able to enact and take credit for big things. Having our better natures prevail was never a sure thing, but they did.

And for that we can all be grateful. That includes those wretches who would have preferred to blow our nest-egg and leave Alaska with their wallets full.

Fortunately our cooler heads prevailed when they were needed most.

Tom Brennan is an Anchorage columnist and author of six books. He was a reporter/columnist for The Anchorage Times and an editor and columnist at The Voice of The Times.