No new taxes!

The common refrain in Juneau this session is “We need a fiscal plan”.

Unfortunately, to many, that translates into a much longer lyric that asks, “How do we impose more than $1 billion in new taxes on residents and Alaskan businesses to turn a marginally sustainable $1,300 dividend into an attempt to fund an unsustainable $2,700 dividend. All this, on the heels of the Permanent Funds losses of nearly $3 billion in the market over the past year?” Wouldn’t it be great if our legislators thought about a sustainable long-term fiscal plan for Alaska, rather than just thinking about their next re-election?

Alaska does not have a “fiscal crisis.” Thanks to the Permanent Fund earnings and general fund receipts from oil production, we have enough revenue to pay for reasonable state services, a good capital budget and still have enough left over for a fair and sustainable dividend for all Alaskans.

The only “crisis” is that we are currently unable to afford dividends twice that large without raiding the Permanent Fund or drawing our savings to a dangerously low level.

Proposals are now pending in the Legislature for a state sales tax, state income tax and a higher oil tax. Any or all of them would be a major blow to the state’s economy—not a stimulus as some want you to believe.

None of those proposals are necessary at present to pay for essential state services or even additional desirable state services like better education, roads, airports, health care, day care and public safety.

If in the future, if a national recession and/or sustained low oil prices were to occur and we need new taxes to pay for essential services, then I am sure most Alaskans will agree that those taxes are needed and will only argue about which combination to implement.

But in the meantime, implementing new taxes to pay for a higher dividend that is already taxable? I don’t believe that is what most Alaskans really want.

Carl Marrs is CEO of Old Harbor Native Corporation. He previously worked at CIRI from 1973 to 2004, serving as their president and CEO from 1994 to 2004.