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12/2/2017
PoV: Finding sources of revenue in budget crisis

By DAN ORTIZ

A misleading internet video posted around Thanksgiving alleged that I “want” to implement a statewide income tax and that the State of Alaska continues to have a bloated budget. Neither of those statements is accurate.

When I first took office three years ago, the state’s annual revenue was declining by 85 percent or more. I knew that the primary job of the Legislature was to significantly reduce government spending. In 2015, I voted for more than a billion dollars’ worth of cuts in state spending. The operating budgets of the state and the Legislature have been cut almost in half during my time in office, and the capital budget has been reduced to a bare minimum. Of course, those reductions came with a significant cost.

Because we have reduced the combined capital and operating budget by 44 percent, there are significantly fewer state jobs. Today, 2,800 fewer people are working for the state than three years ago, which equates to a 12-percent decrease in the state workforce. Department spending has decreased on average by 23 percent.

Pertinent to our fishing industry, the Alaska Department of Fish and Game Budget was slashed by 35 percent, making it harder for the department to manage our state fisheries to the maximum sustainable yield. In some instances, certain fisheries and gear groups, and the families they provide for, lost fish catch opportunities because the department didn’t have adequate funding to get all the escapement data that they had collected in years of more robust funding.

The Alaska state capital budget has been cut to the bare minimum to meet federal match requirements. A very small capital budget means we have mounting deferred maintenance issues with transportation infrastructure (ferries, roads, airports). There are also fewer jobs available for our private construction companies, resulting in a significant number of workers being laid off in that industry.

The other half of agency spending that my colleagues and I have not taken a knife to are valuable to our communities and economy. Except for specific reductions, there are not significant cuts left to make. The Republican-controlled Senate discussed making a 5-percent cut to education funding and closing two Alaska Pioneer Homes, but were unable to muster a majority of votes in that body to make it happen.

There might still be small, surgical cuts to make in agency spending. If you know of projects or spending practices that aren’t valuable, please email me at rep.dan.ortiz@akleg.gov. I am always looking to shave the fat in our budget.

Despite the significant reductions to state spending, we continue to have a $2.7 billion budget deficit. For the past six years, Alaska’s budget deficit has led the state to burn through at least $13 billion in savings. We only have $2.1 billion remaining in the Constitutional Budget Reserve account, which means we no longer have the option of “balancing” our budget by using savings.

On June 22, 2017, the House sent over a complete and balanced budget to the Senate. It included an end to cashable credits to oil companies, restructuring how we use the Earnings Reserve Account of the Alaska Permanent Fund, and an income tax. No one wants to pay an income tax — myself included — but the estimated $700 million that it would generate in revenue would fix the problem of our budget deficit. An estimated 15 percent of that revenue would have come from nonresident workers.

Like in our household budgets, we can cut spending until our Xtratuffs have holes as big as the potholes on Tongass. Eventually, too much cutting hurts our ability to climb out of a tough fiscal situation. It’s impossible to have a competitive and functional economy without infrastructure or basic community services.

During this upcoming legislative session, a long-term fiscal solution must be found. As your District 36 representative, I will continue to be an independent voice calling for a solution arrived at in the middle ground —– a solution that includes continued budget efficiencies and added revenues, and a solution that requires tough votes. I’m committed to making votes that are in the best common interests of District 36 residents and all Alaska residents.   

Rep. Dan Ortiz, I-Ketchikan, represents House District 36 in the Alaska House of Representatives.