Time to revisit Gov. Walker’s Sustainable Alaska Plan

Former Gov. Bill Walker in an official photo. (State of Alaska photo)

By Rich Moniak

A report published last week by the University of Alaska Institute of Social and Economic Research (ISER) gave Sen. Bill Wielechowski (D-Anchorage) new fodder to better frame an old argument. “ISER clearly stated the most regressive form of balancing our budget is to rely on cutting the PFD,” he wrote in his latest newsletter. 

While it’s true that ISER came to that conclusion, the word “rely” is doing too much work in that statement. Cutting the PFD was presented as a stand-alone option. And it’s the legislature’s job to consider how it should be a component of a broader-based solution. 

Their first order of business should be to thank Gov. Mike Dunleavy for finally putting new taxes on the table. That doesn’t mean taking his proposals too seriously. But it can be used as leverage to push back harder against the anti-tax wing of the Republican Party. 

Then they need to reframe the PFD debate. While cutting it would hit the poorest Alaskan households the hardest, the problem is households that aren’t equally dependent on it receive the same amount of money. Some higher up the wealth ladder don’t “need” the PFD at all. That’s what makes it a regressive entitlement. 

The way around the problem is to combine the funds saved by cutting the PFD with new revenue to create new programs targeted to those hurt the most by cutting it.  

This should have been debated 10 years ago when Gov. Bill Walker submitted his New Sustainable Alaska Plan to the Legislature. In regard to new taxes, he said “everyone is being asked to participate, from the oil & gas, mining, fishing, and tourism industries; to everyday Alaskans, as well as the many non-residents who only work here. Yet despite these changes, the tax burden on individual Alaskans will still remain among the lowest in the nation.”

Legislative members of the Independent Democratic Coalition expressed appreciation for Walker’s efforts. Ketchikan Rep. Dan Ortiz gave him credit for “for not ignoring our fiscal situation just because it’s politically risky to do so.” And believed “a solution can be reached if lawmakers and all Alaskans put aside politics and come together as Alaskans.” 

But Wielechowski and others objected to the PFD reductions in the plan. 

In any case, Republicans controlled both chambers. They weren’t interested in raising taxes then. And with tax cuts being one of the few surviving principles from the legacy of President Ronald Reagan, I suspect most of them aren’t now.   

Mitt Romney may not be the leader of their party any longer. But the 2012 presidential nominee who proposed across the board tax cuts has a different message they ought to consider. 

In a December NY Times op/ed, Romney explained that when the Social Security Trust Fund runs dry in 2034, the “federal government will need trillions of dollars to make up the shortfall”. Some of the broad-based solutions he proposed are making Social Security and Medicare benefits “need-based” for future retirees. And eliminating the cap on FICA employment taxes. He also gave examples of some really huge loopholes that should be closed.

“And on the tax front,” he added, “it’s time for rich people like me to pay more.” 

I think it’s fair to say oil company executives and stockholders should be paying more too. 

ExxonMobil, Chevron and Shell all reported record profits in 2022. This week, the president of ConocoPhillips Alaska said the “company had an exceptional year in 2024." They paid 1.5 billion in taxes and royalties to the State of Alaska and the federal government and still had net income of $1.3 billion. 

But the Alaska Oil and Gas Association took one look at Dunleavy’s proposed tax increase and claimed it would “threaten long-term production levels and the viability of the Trans-Alaska Pipeline System, which is essential to Alaska’s economic well being.”

It’s well past time for the legislature to call that bluff.  

And if they’re ready to take that strong stand, those of us who can best afford new taxes and a smaller PDF need to let our representatives know we’re ready to sacrifice a little for the economic future of our state. 

• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector.