COMMENTARY: Stable tax policies, balanced fiscal plan required for a stronger Alaska
Alaska is at a tipping point and Alaskans have a choice to make: Either keep Alaska competitive and fix our fiscal crisis or continue down a path that ends in a failed economy.
We are co-chairs of the KEEP Alaska Competitive Coalition, a broad-based group of Native corporations, unions, businesses and individual Alaskans who understand that fair and consistent tax policies for our resource industries are essential for Alaska’s economic future.
We are 5,000 members strong. We are not the oil industry and we take no funding from the oil companies.
We are also longtime Alaskans who remember an Alaska before oil. We understand that Alaska is better with oil than without.
The oil industry has paid for up to 90 percent of state general fund spending the past 40 years. Even in these days of low oil prices and low production rates, oil provides 67 percent of the state’s unrestricted revenues and supports one-third of our economy.
Our heavy dependence on oil has given us a great ride, but it’s not sustainable. It’s not economic reality. You can’t take in revenues of about $1.5 billion, spend approximately $4.5 billion per year and continue to do nothing about it.
And, if most of our revenue, and most of our jobs, come from the resource industries, you can’t tax away their incentive to invest and still expect to have a sustainable economy.
The solution to our fiscal crisis is not that hard. We can develop a durable and sustainable fiscal plan by following these methods:
• Continue to cut the cost of state government;
• Reduce the PFD;
• Use a sustainable percentage of value of our Permanent Fund earnings to fund state services;
• If necessary, increase revenue through some combination of taxes, and do it now to maintain stable and competitive taxes for our resource industries.
Alaska has much to be thankful for and on which to build an economic future.
Alaska’s abundant natural resources are the envy of the world.
At today’s production rate, we have more than 40 years of proven oil reserves remaining on the North Slope, and we have much more to discover and develop with the necessary infrastructure on the Slope, the Trans-Alaska Pipeline System and the Valdez Marine Terminal and a road to the oil fields.
The mineral reserves in Alaska are among the biggest in the world. We have the largest wild salmon and pollock stocks on Earth.
Alaska is not only rich in opportunity; it has one of the best labor forces in the country. And most Alaskans want to remain here.
The United States is the most politically secure, economically strong and safest nation in the world.
Why not market these attributes, be competitive and make Alaska the economically vibrant state it can be?
Here’s what we can do:
• Support a solution to Alaska’s fiscal crisis that includes cuts, restructures the Permanent Fund and require new taxes if necessary.
• Urge our legislators not to kill our resource industries with unstable tax policies and overtaxation.
• Tell our legislators to be responsible and find a solution to our fiscal crisis in the current session.
• Talk to our employees, friends, neighbors and others so they understand the urgent need to fix our deficit on a sustainable basis.
Our goal is to support a solution that includes stable tax policies and a balanced fiscal plan.
Jim Jansen is chairman of Lynden. Marc Langland co-founded Northrim Bank and served as its chairman until he retired at the end of 2015.