Alaska Republicans? Reality Calling on Line 3.


You can summarize the Alaska State Senate Republicans’ fiscal strategy for Alaska in a simple paragraph:

Slash the budget, but make to Governor decide where to cut, thereby aggravating the deepening recession, wrecking the present. Fund the budget deficit by spending irreplaceable principal balances in the reserve and permanent funds, wrecking the future. Hope the funds aren’t exhausted before crude oil prices go back up.

Never mind that crude oil prices just fell to $45.62 per barrel, the lowest since last November, and half of what is needed for SB 21 to generate meaningful revenue.

Never mind that a fossil fuel-based economy is suicidal for Alaska; anthropogenic climate change caused by CO2 emissions is going to hit Alaska hard. Planning on producing more crude oil, which will be burnt to create still more CO2, is pretty damned stupid.

Never mind that increasing use of renewable energy by the more sensible parts of the world will reduce demand for crude oil, and reduced demand means flat or declining prices.

And never mind that commodity prices are largely unpredictable on a short- and middle-term basis, and that the best predictor is the Drunkard’s Walk, a random number algorithm. The State Senate is literally planning the state’s economy on a craps game. If you prefer a poker analogy, they are betting on a busted flush.

But worst of all, this “plan,” this ridiculous strategy, is the Republicans’ basis for playing chicken with a state government shutdown. On June 30, the money runs out. All but a few crucial state functions will cease. The impact on Alaska’s economy will be fearsome: fisheries and tourism will be seriously impacted. Even – taste the irony – permitting for oil exploration will be jeopardized.

And the reason for this insane, pointless game of chicken?

The Republicans don’t want a state income tax. The other 49 states have some form of statewide taxation; 46 of them have a state income tax. Alaska had a state income tax until the oil boom. It’s not like a statewide income tax is some kind of radical act. It’s not like a state income tax is some kind of extraordinary hardship. It’s the norm, not the exception.

But this is the excuse the Senate Republicans are using for blackmailing Alaskans. “Do what we want or the state’s economy gets ruined.” And not only is the fight silly – 90% of states have an income tax – but the alternative they offer, their “strategy,” is even sillier and ruinous.

It would be amusing if it wasn’t going to wreck a lot of Alaskan’s lives. If it wasn’t going to wreck Alaska’s hard-earned credit rating. Alaska’s unemployment rate continues to rise, and is now the second highest, after New Mexico.

But don’t worry. The Republicans have a plan.

NOTE: This is WC’s 3,000th blog post on Wickersham’s Conscience. WC is as surprised as anyone else.

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