Keller sends open letter to governor about permanent fund debate

Governor Walker,

Thank you for your tenacity in keeping Alaska’s fiscal crisis on center stage. While the crisis is difficult to accept, it is very easy to understand.

It is a ‘zero sum game’ quickly boiling down to reality. We cannot spend what we do not have. One result of your time in office seems to be that more and more Alaskans are becoming aware that the fiscal crisis is real and must be dealt with. There really are only two possible solutions: raise more revenue (TAX), or cut spending.

Spending advocates have again prevailed in our most recent budget process, now you have opportunity to use your veto power to eliminate wasteful spending. Article 2.15 of our constitution is very clear — the governor can simply veto to balance the budget, unless the legislature musters super majority to override, something highly unlikely when many have worked very hard for cuts.

A veto of the appropriation for permanent fund dividends, however, is a terrible idea!

This particular veto would not reduce the budget deficit because the vetoed funds would simply stay in the Earning Reserves account (the source for PFD checks) until the legislature re-appropriates. Veto power does not extend legislative power to the governor to ‘restructure’ the permanent fund. That belongs exclusively to the legislature. Besides, even if the entire PFD appropriation were vetoed, Alaska’s spending per capita would still be the highest in the nation. Alaskans would be deprived of inherent personal property rights and we still have the world-class overspending problem.

Where has the legislature received the money to create our overspending habits?

The Alaskan Legislature, unlike any other state, has never had to cope with passing broad-based tax laws as part of our fiscal equation. As we all know, the Alaska Constitution, Section 9.15, allows a huge 75 percent natural resources money to flow directly into the general fund ($80+ Billion so far).

We are finding the culture of over-spending from this money very difficult to reform.

Those closest to the spending (at the public trough) are tenaciously protecting their source. The geographically isolated budget process is heavily influenced by spending advocates who have the easiest access to Juneau. The healthy tension related to tax legislation (typical in other states) is missing.

The legislative power to spend has not been tempered by the legislative liability to tax politics. The constitutionally established ‘tax’ on the people’s commonly owned natural resources (not typically called a ‘tax’) has become all but invisible until now when it is going away.

Expanding general fund revenue without transparent tax laws will make the overspending problem worse!

Restructuring the Permanent Fund

Protecting the Permanent Fund

Capping the Permanent Fund

These are all code phrases for taking Permanent Fund investment returns and placing them directly into the general fund just like the other 75 percent (the ‘tax on common property’).

The coveted Earning Reserves Account (ER) has been allowed to ‘fatten’ to about 9 billion dollars. This could have been, or could become, bigger PFDs!

Simply ‘taking’ this money before it is personal property is not an option without a vote of the people who own it.

It is not the right time to add ANY tax burden to Alaskans, but especially ‘taxes’ not clearly specified in the constitution or state law. It IS the right time to make the cuts necessary to balance the budget while we have some transition money available in the CBR. The veto power would be helpful— but only vetoes of spending— not an obscure re-assignment of savings!

Rep. Wes Keller (R-Wasilla) represents House District 10.