If you want to guarantee a sunny evening in Juneau, schedule a town hall meeting!
Last Tuesday night, Representative Justin Parish (a Democrat serving House District 34 in the Juneau valley) hosted a town hall meeting with guest speaker Randy Hoffbeck, the Commissioner of the Alaska Department of Revenue, to talk about Alaska’s fiscal situation.
The standing-room-only crowd was definitely a great showing for a sunny Juneau evening. Here’s my take-away from this town hall meeting.
Smoothing out the boom and bust
Representative Parish opened the evening with attendees introducing themselves and why they attended the event, their questions and/or concerns. It was clear many Juneau residents are really concerned about Alaska getting its fiscal house in order and how Governor Walker and our lawmakers plan to do it.
Commissioner Hoffbeck then took the floor. He spoke about “how we got here” – why we’re in the fiscal crisis we’re in, and about Alaska’s fiscal extremes. Over the years, Alaska has seen up to a 68% swing between the high and low revenue years. Most states average a 10% revenue swing; some are as low as 5%. Alaska cannot possibly have efficient, long-term budgeting with such great revenue swings.
Why an income tax?
In order to create a more stable revenue base for Alaska’s treasury, Governor Walker has proposed a State income tax. From what I heard Commissioner Hoffbeck say, there are two major reasons the Governor chose a State income tax over some other revenue source: it’s a broad-based tax that will be paid by a majority of Alaskans as well as non-residents who work in Alaska, and it’s progressive, meaning lower-income people pay no or less tax than higher income people. The Alaska House Majority Coalition, of which Representative Parish is a member, also supports a state income tax.
By re-instituting* a state income tax, reformulating the Permanent Fund, and changing Alaska’s oil tax structure – the three main pillars of Governor Walker and the Alaska House Majority’s budget proposal – Alaska can gradually get out of the fiscal hole we are in. This three-pillar plan will also enable us to better budget for future years rather than on a year-to-year basis, which is what we’ve been doing for the past 20 years!
Cuts won’t balance the budget
Commissioner Hoffbeck and Representative Parish then took questions from the audience. Some were very specific, others more overarching. The most direct questions were from those who oppose a State income tax. Other less direct questions seemed to be from those who support a long-term fiscal plan and who understand that increased revenues are necessary to do that.
Commissioner Hoffbeck made it very clear that the State’s budget has been cut nearly as low as it can go, and the minimal amount of sensible cuts that may be able to be made will not get the State out of its fiscal hole.
Alaskans have to start paying our own way
Here’s my perspective: None of us wants to pay more taxes than we need to – why would we if we don’t have to?
But since 1977, Alaska has been living off of oil revenue and has done very well by it. Alaskans have been spoiled and had things pretty easy these past 50 years. We have the lowest tax rate of any state in the nation, plus residents get an annual dividend to boot!
But now that oil revenue as dried up, it’s time for Alaska residents (and non-residents who work seasonally in our State) to pay our share for the necessary services our State provides: education, public safety, health care, transportation infrastructure – the list goes on.
At the end of the evening, I was pleasantly surprised to hear Commissioner Hoffbeck repeatedly say he thinks the Legislature is close – very close – to working out a long-term budget plan.
Your part isn’t over yet
Let’s all continue to pay attention, contact our legislators with our questions, concerns, and opinions, and do our part to ensure that the 30th Alaska Legislature will come together to do what’s right for Alaska and come up with a long-term fiscal plan for a fiscally stable Alaska future.
Unlike past years, lawmakers cannot continue to kick the can down the road. For the sake of Alaska’s children and grandchildren – our State’s future – we cannot continue to think we can close our fiscal gap with additional cuts to education, health care, transportation infrastructure, and other necessary public services. A new revenue source is needed, and I and a lot of other Alaskans believe that a broad-based, progressive State income tax is the best way to do it.
Let’s make sure our legislators get the message!
Finally, thank you to Representative Parish and Commissioner Hoffbeck for a very informative, useful town hall meeting. It’s not fun to be inside on a sunny Juneau evening, but this town hall was definitely well worth it.
Until next week….
Chair, Tongass Democrats
* Alaska had a state income tax until 1980.