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Last year (2019), Gov Dunleavy& #39;s initial budget proposed approx $1B in spending cuts. B/w the pushback last year and this session& #39;s supplemental, virtually all of that was rolled back b/c there was still sufficient rev (+savings) to cover it. #akleg 1/n
Some argue the dynamics will change going forward given the $$oil rev drop. But even at $35 oil, there& #39;s still sufficient "state revenue" (including PFD& #39;s as part of that, as many in the #akleg do) to cover roughly 90% of current spending + inflation over the next 10 years. 2/n
Frankly, given the "support" for con& #39;t spending that we saw in the course of last year& #39;s effort, we are extremely skeptical the spending number will come down as long as (most believe) there is sufficient "revenue" to cover it. #akleg 3/n
As a result, to us the key issue going forward is not "whether," but "how" that revenue is raised, in particular, how the additional revenue (in gray) above Trad Revs + POMV 50/50 is raised. #akleg 4/n
Many will push to continue to do so through PFDcuts (or, essentially, PFD elimination). But - and here& #39;s our point - that approach to raising revenue has the "largest adverse impact" on the #AKecon & #AKfams of all of the options. #akleg 5/n
As importantly, it pushes the bulk of the costs off on middle & lower income #AKfams. The Top20% pay a relatively trivial share (compared to other income brackets) and non-rez, none. #akleg 6/n
Especially in these economic times, we believe using a rev approach that has the "largest adverse impact" on #AKfams & #AKecon, as well as a hugely regressive distribution, is not only reckless but indeed, to put it as bluntly as we can, unconscionable fiscal policy. #akleg 7/n
As we have written previously, there are other rev approaches that are much more equitable & have a lower economic impact. If we are headed toward spending these amounts anyway, we should raise the revenues to do so in as balanced & low impact a manner as possible. #akleg 8/n
We don& #39;t oppose those that con& #39;t to argue for spending cuts. But we believe stopping there is hugely shortsighted. #akleg 9/n
Given reality, the likelihood is that spending is likely to continue in any event. Refusing to address how that should happen - avoiding a discussion even of "if" it happens - simply leaves the field open to those who want to do so through continued PFDcuts. #akleg 10/n
