By Larry Persily
Publisher, Wrangell Sentinel
Alaska is 30 years into state budget deficits, borrowing billions from savings to pay the bills.
Gov. Mike Dunleavy is five years into the job, still pledging mega Permanent Fund dividends even if the money isn’t there.
Three months ago, Dunleavy in his State of the State address couldn’t even manage to acknowledge the need for a long-term fiscal plan, despite the budget math that adds up otherwise.
Then the governor had an epiphany last week. Not a religious one, a fiscal one.
He said the word “taxes.”
Only he didn’t say it in public. That would have been a bridge much too far for Dunleavy, who has long maintained that taxes are bad and that he would never support any such thing without a vote of the people.
He said it during closed-door meetings with legislators, with no mention of putting the question on a statewide ballot, as if he were embarrassed to tell the public the truth about state finances. Or maybe he was sticking his toe into the political waters before sticking out his neck to take questions at a public microphone.
The governor told lawmakers he would introduce legislation for a state sales tax, though he provided no details on the rate, exemptions, how to meld a state tax on top of local sales taxes in 100-plus cities and boroughs, or how much it might raise.
And still no sight of an actual bill as of Monday, six days after he used the T word.
He met with members of the House and Senate as lawmakers are struggling for the umpteenth year to find consensus for an overall fiscal plan to balance state revenues with spending. Even before the governor woke up to the need for taxes, legislators already had put multiple sales tax and income tax proposals on the table, though none appear to be moving anywhere this year.
Even if Dunleavy is serious about seeing the need for taxes to help pay for public services and the beloved dividend, he waited too long to change the batteries in his political calculator — the legislative session started three months ago.
The governor awoke with just a few weeks left before the Legislature’s adjournment deadline of May 17. That’s more than tardy, it’s unrealistic and shows a reluctance to lead. Maybe showing up late is better than not showing up at all, but just barely.
Meanwhile, it’s unconscionable that he continues to support paying out a PFD this fall that would exceed available funds. It’s as if one hand says the state needs money to pay its bills while the other hand says here, take the check.
This is the same governor who last year vetoed a tax of pennies per puff on e-cigarette and vape products, saying “a tax increase on the people of Alaska is not something I can support.” It’s quite the change from opposing a directed tax on vape sticks to supporting a sales tax on everything that moves off the shelf.
The confusing and conflicting positions are not limited to the governor. So-called fiscal conservatives in the House this year support a $2,700 PFD so much that they are willing to run up a $600 million budget deficit. Some who strongly opposed a measly eight-cent-a-gallon increase in the state motor fuel tax last year as an undue burden on consumers — the first increase in more than 50 years — now appear open to a full sales tax, just as long as that fat PFD goes out to their constituents every year.