Posted on 02/19/2016 7:45:56 AM PST by Kaslin
They say California gives us a glimpse of the future for the entire country, but the future of budget battles - state and federal - might be taking place in Alaska.
Alaska has no sales tax or income tax. Nearly all permanent residents receive a check every year from the state - it was about $2,000 in 2015 - and its percentage of residents on public assistance is the highest in the nation.
And now the state has a nearly $4 billion deficit, and lawmakers are meeting in Juneau to determine what to do about it.
Gov. Bill Walker, an independent and former Republican who came to office in 2014 by joining with Democratic nominee and now Lt. Gov. Byron Mallott to defeat Republican Sean Parnell, has proposed $100 million in budget cuts. He also has proposed a statewide income tax, which Alaska never has had, increased taxes on energy and other industries and later budget cuts that would, in theory, close the shortfall by 2019.
Lawmakers have proposed selling bonds, changing how energy is taxed, making changes to how payments are made to the state's public employee pension fund and even what would be the first statewide sales tax.
They have resisted, so far, questioning whether a state of 550,000 needs 25,000 employees or halting spending on AKLNG, a massive infrastructure project that ought to be funded privately if at all.
But one idea that seems to be gaining steam is a proposal to use the state's permanent rainy day fund to cover the loss. The state already draws about $3.2 billion from the fund each year, which it uses to write those checks to all Alaskans every February.
But that money comes from the Earnings Reserve Account - interest generated by the now $51.3 billion in the Permanent Fund. What's being suggested now is to dig into the principle of a fund established to take care of the state if the oil industry collapses.
And why is this budget crisis so different from those that have confronted Alaska on and off for decades? Because one of its biggest businesses wants it that way.
GCI - a conglomerate of broadband, programming and cable interests - is the dominant telecommunications company in Alaska. It is one of Alaska's largest private employers, with 2,250 workers and $910 million in revenue in 2014.
It makes tens of millions of dollars per year off state contracts in Alaska, and it rakes in $170 million of the $230 million the federal government sends every year from the Universal Service Fund—created by Congress to ensure broadband access to all Americans.
And although everything is more expensive in Alaska, the service GCI provides is way more expensive. As in, the government spends about $26 per customer to bring broadband to remote areas in the lower 48 but $234 per capita in Alaska - a fact that somehow seems to bother Sen. Roger Wicker, R-Miss., far more than either of Alaska's senators, Lisa Murkowski or Dan Sullivan.
The state ends up with about 1/50th of the money in the program, which sounds fair until one considers it has less than 1/600th the population.
And the company that provides most of its cable service probably would not be profitable without its annual allowances from Washington and Juneau.
GCI has established a non-profit - called OneAlaska - and has been traveling the state recruiting allies. It has focused on unions, especially public sector unions, whose ranks would be thinned if the state truly started looking at program needs.
It plans to "educate Alaskans," according to a statement, and, according to State Sen. Bill Wielechowski, D-Anchorage, to force lawmakers to "get in line" or "face the wrath of having a lot of money spent against you."
The CEO of GCI, Ron Duncan, makes no secret of his motivation. "I have a responsibility to GCI's customers, employees, and their families to make sure that our company provides continued opportunities for growth and innovation for years to come," he said in a statement announcing formation of OneAlaska.
In other words, continue excessive state spending, or your cable and broadband service gets it in the neck. That's a level of crony capitalism not even California has reached.
Now, Alaska is in a unique situation in some ways. It has the same give and take on spending as any other state, but it also has this $51.3 billion piggybank. It wisely siphons off some of the interest but lets the principle continue to grow. If and win the oil industry peters out in Alaska, the leaders who preserved this will look pretty smart.
But government is not a big Rube Goldberg machine. It cannot be kept at a larger level simply so there will be enough customers for the local cable company for it to remain profitable.
If the cable company, with its monopoly protection, can't turn a profit, the answer is not to raid a state's rainy day fund or refuse to address state spending in a responsible way. The answer is to find a new cable company.
Palin’s “good ol’ boys” are back. Whatever else she was or is, she was always a mature, clear-thinking, and dedicated public servant. Rare that.
People tend to think of Alaskans as rugged individualists, living off grid and completely self sufficient. While this may be true for some, it’s not for most. Alaska, on a per capita basis, has the most welfare dependent population in the country.
Man.
$51,000,000,000 just sitting there waiting for the Democrats to get their hands on it.
You could make a lot of money selling drool-cups to Democrat politicians in Alaska when they talk about this pile of loot.
The GCI money machine is now allied with ‘Big Union’ - which is funny, given that GCI is the mot virulent **anti-Union** business in AK.
Ron Duncan puts out his pious mewing over ‘protecting the workers’...when in 2005, GCI laid off almost **25% of their workforce** so Duncan and a few top level manager could reap millions in bonus and stock option money.
AK is isn’t a State gov’t - it’s a tax supported make work program to buy votes.
$51,000,000,000?
“Today, President Obama announced that in keeping in line with his ‘Responsibility To Murder And Loot’ I mean ‘Responsibility To Protect’ policy that he developed with George Soros, The United States will begin using its military forces to free the oppressed citizens of Alaska by taking all that $51,000,000,000 of oppression away.”
It's time now for all those on public assistance to grab their fishing rods and guns and head out doors into the snow for all their meals! The smorgasbord is over!
The author is wrong about one thing, at least. The State of Alaska had an income tax before the pipeline. Those of us who have spent more than a few years here remember it well.
WE're probably going to get a temporary state tax that will be rescinded when oil prices go back up; at least that's what Alaskans will feel is fair.
Bottomline is taxes will never run me outta this country; couldn't imagine living in the lower 48.
She endorsed this liberal creep, Bill Walker, who should be impeached.
First of all, thank you for updating us as to how everything is going up there in Alaska. If I may, may I ask you who do you think is responsible for the restrictions on mining, commercial fishing and everything else. Did all the federal restrictions begin with Bill Clinton? Or with Obama?
...low game numbers due to over hunting & wolves
I'm also curious as to why hasn't the legislature immediately enacted laws for all their game wardens and the public -to be allowed to shoot wolves on sight, thereby controlling their resurgence.?
...if I’ve pinged anyone in error, please FR mail me
Large numbers of native peoples probably a big factor there.
What's crazy is there's more moose around Anchorage and Fairbanks than out along the Yukon; main reason is wolves & bear & and thousands of urban hunters that swarm rural areas; the resource just can't with stand the demands. Every wolf consumes 6 moose/year, bear take 85% of moose calf production every June, and come hunting season, the urban hordes arrive. No joke, it's hungry country out along the upper Yukon. Most people get a couple caribou, if they migrate within 100 miles of them, feel quite blessed if they get a moose every other year, and last season the feds shut down the use of fish nets on the river for kings. The Indians complain constantly about having to eat White man's food using food stamps; they wonder what is going so wrong and the future.
You need wolf and bear control or the land will only produce 10% of the moose it's capable of; the feds rather the people starve and wolves eat well. Palin was loved up here because she fought the judges injunctions and funded wolf control programs; but she's gone now and the politicals are in fear of the wolf luvers money at election time.
It's tough getting wolves, awful smart; you see them from time to time in the winter, but got to be lucky. I've hung out the window with my 6.8 stag, flashlite on the barrel shooting at wolves in my garbage cans at 3 am. Last week, I put over a 1000 miles on my truck, road hunting, up to cold foot, down to Tok and up taylor, and through central and circle. We've seen wolves in these areas in the past, but not this time, just tracks; no joke they are tough unless the caribou are moving through.
Sweden harvests 5X the moose Alaska does, reason is they control the wolves. WE have over 25X wolves in Ak. Hard to envision with a lower 48 mindset, but I'm speaking the truth.
Bottomline, someday the price of oil will go back up and Alaska will be awash in cash and no problems again. $40 bucks a barrel is break even for oil in Ak; they are still pumping into storage, but running out of space. Also over 1`/4 the population is Native, vast majority on complete govt assistance, state grants, ect. In itself overloads the state expenses.
Even with the problems, I'll never leave Alaska; something about the place, where I feel peace.
Could cure the wolf pelts and sell them to furriers. That’d be an economic base.
Yes, that would work perfectly. I’ve read that wolf pelts draw big money! And certain colors, like all bright silver, go for top dollar, but are rare.
And PETA would hate it!
I'll risk losing more female readers of what I post by saying this:
#### the miserable, delusional Democrats and get Trump in there!
Like Eska inferred, I’ll bet there have been 2 dozen or more separate federal land grab laws put on the books since Carter.
Is wolf meat tasty?
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