PFD earning, taxes highlight governor’s fiscal discussion

Governor Bill Walker gathered Alaska leaders from around the state in Fairbanks over the weekend to talk about state services and how to pay for them.

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The event called: “Building a Sustainable Future: Conversations With Alaskans” resulted in some clear and predictable messages, but it’s uncertain when or if they will result in legislative action.

Speaking for one of the many working groups who shared feedback at the end of the gathering, Joe Geldhof of Juneau summed up the consensus of many participants charged with solving the state’s revenue shortfall.

“It’s gonna require going into the Permanent Fund earnings; there’s no way around that,” Geldhof said. “It’s gonna require, probably, some sort of income tax.”

In closing remarks at the conference Governor Bill Walker also referred to the “T” word.

“There’s actually two ‘T’ words,” Walker said. “One’s the truth, we’re gonna tell the truth, and the other is taxes, there’s gonna be taxes; we’re gonna have to do something.”

There was an abundant praise for Governor Walker taking on the budget issue in such a bold public way. Independent oil industry analysts Richard Fineberg of Fairbanks says he appreciates the governor’s effort, but contends there was one key piece missing from the conversation.

“North Slope profitability and our failure to audit and get that data in a timely manner and get it at all sometimes,” Fineberg said.

Democratic State Representative David Guttenberg of Fairbanks agrees that oil tax issues were underplayed, adding there continues to be legislative resistance to all new revenue solutions.

“A lot of people think they were foregone conclusions,” Guttenberg said. “Some people just don’t want to talk about oil taxes, or income tax, or revenue in any forum, in any context, whether it’s good or bad. “

“The political question is, ‘Will you participate?’” Republican State Senator John Coghill, of North Pole, says.

He agrees new revenue isn’t a hot topic among legislators, who remain focused on spending, and credits Governor Walker for taking on political taboo like taxes and Permanent Fund earnings use.

“It’s easier for the main leader of Alaska to go out and do that than it is for an individual legislator who paints a big target on themselves and can’t sustain it,” Coghill said. “The governor said he’s gonna do it; he is doing it; you know, good on him.”

Coghill, Guttenberg and others at the conference spoke well of a new state online model that allows users to tweak various aspects of state spending and revenue, and view the result, a tool they hope will make the budget situation more real to the public and spur action.

Governor Walker plans to continue the budget conversation at other locations around the state in coming months.