There is always a well-known solution to every human problem — neat, plausible, and wrong.
– H.L. Mencken, “The Divine Afflatus” in New York Evening Mail (16 November 1917)
WC cites to Mencken because the Republican Majority Caucus in the Alaska Legislature can’t seem to grasp that their neat and plausible solution to Alaska’s fiscal crisis – still more cuts to the state budget – is completely wrong. Partly, that’s a reflection of those legislators’ fears that imposing an income tax and directing part of the Alaska Permanent Fund income to the fiscal shortfall will complicate their reelection campaigns. Those legislators fear that their constituents also prefer neat, plausible and wrong solutions.
WC thinks that those constituents are smarter than that. WC thinks Alaskans are smarter than their elected representatives. Although, Lord knows, that wouldn’t take much.1
According to a January 2016 public opinion survey by the Rasmuson Foundation, 65% of Alaskans now recognize new revenue sources are required. Only 17% of Alaskans said they would be less likely to support their legislators if they voted for increased revenue. You’d think that those numbers would encourage the Republican Majority coalition to relax, to take meaningful action by raising taxes. A legislator whose decisions are driven solely by what will get him or her re-elected is a mean, pitiful creature anyway, working for themselves and not Alaskans. But the Republicans in Juneau don’t even have that flimsy excuse.
There still seems to be a segment among the Republican Majority Coalition that thinks we don’t have to increase revenues, we need only wait for the price of oil to recover. That qualifies as delusional thinking. Alaska has enough cash in the Constitutional Budget Reserve to make it just a few more years before exhausting the fund. But crude oil prices are predicted to remain low through at least 2025. Once again, the neat, plausible solution – wait for crude oil prices to recover and prop up Alaska’s economy – is simply wrong.
There is a strong portion of the Republican Majority Caucus who want to slash our way to prosperity. These are the folks who think we can simply cut the state budget enough to balance expenses against revenues, without need to impose taxes on their constituents. Apart from the mathematical impossibility – firing every state employee wouldn’t balance the budget – the result would be a profound state economic recession. The governmental sector is too important a part of Alaska’s economy to decimate without serious consequences. And the slashers would also jeopardize federal funding, which in many cases requires a state match. Highway funding, for example, where a modest state match is the requirement for the very much larger federal match. Slashing the state budget, like waiting for oil prices to recover, is neat, plausible and dead wrong.
It’s hard to find even the $100 million that Governor Walker has proposed in additional cuts without having a bad impact on the state’s economy. The budget deficit is more than 36 times that.
No, it’s time for the grownups in the room to do their job. The Legislature can tinker with Governor Walker’s proposal: increase the income tax and spare more of the Permanent Fund Dividend, or decrease oil drilling incentives at the risk of further postponing the return of oil to Alaska’s revenue stream. But fundamentally Alaska has a revenue problem. The free ride is over. It’s time to pay for what we want and need. A $3.6 billion dollar deficit isn’t going to be solved by wishful thinking. Or pandering to a noisy minority.
- This is probably a classic instance of praising with faint damns: “You are smarter than Sen. Pete Kelly.” Ouch. ↩