The Majority Caucus in the State Senate has one priority this year: restoring fiscal stability to Alaska. And Senate President Kevin Meyer, of Anchorage, says Permanent Fund earnings will have to be part of that mix.
But Meyer says the first order of business will be trimming the state budget. And he says there is room to make substantial reductions.
MEYER: Getting to about $800 million — similar to the reduction we had last year is certainly doable… possible. But we don’t think we’ll get there if we go after revenue first. The tendency is not to make reductions because it’s painful, oftentimes. We don’t like to do it. So we want to go there first. Once we make the reductions in right-size government, squeeze out the duplication, then we’ll look for revenue that will give us the physical stability that we’re talking about in that first priority.
TOWNSEND: Do you have concerns that there’s sort of a sweet spot as far as how much you can cut without impacting the economy in the state. As you know, the state drives a lot of the economy with state spending. Is there a number that you feel like, if we go below when you’re making cuts, that the economy could implode even further?
MEYER: We do think we can make some further reductions in state government without being detrimental to the economy. What we do worry about and we do fear is that if we were to implement all the different taxes that the governor has proposed, that would be too much of a hit and it would be detrimental to the economy. For example, (with) an income tax now people would all of a sudden have less money in their paychecks. A fuel tax — all of a sudden people are paying more at the pump for gas. And if you’re a drinker or a smoker, all of a sudden you’re paying more for that. All of these things add up. And pretty soon you as an individual — and also the governor’s plan on dealing with the Permanent Fund dividend, cutting that essentially in half — all those things added up leaves the individual Alaskan with less money to spend in the economy. And that, combined with a reduction in state government, would be detrimental to our economy — yes.
TOWNSEND: Are all taxes anathema to what you want to do or are there some you can support? Otherwise, how will you solve the budget problem without any taxes?
MEYER: We don’t feel like we need to resolve all of it this year in the sense that, to do too much in one year would be devastating and have a negative impact to your economy. However if we can get that gap to about $500 million or $1 billion… that’s a good thing. And I would see this session as successful if we were able to do that. And the reason that I say that is because we still have $9 billion in savings, so if you’re only drawing, let’s say, $1 billion in savings, that leaves you another eight years to use your savings. And that buys you time to see if oil prices will go back up… or if the gas pipeline is viable. And then let people run for re-election, and during the election process you can have the discussions on, ‘Should it be an income tax?’ or ‘Should it be a sales tax?’ or some other tax. I think that would be a very good topic to have out there as you run for re-election, or election, to office.
TOWNSEND: It’s going to be a big, difficult task. Democrats and Republicans have said they will have to work together more this session than in the past. You’ve been talking about lobbyists trying to cause debate for a single issue. How do you plan to accomplish that — getting Democrats and Republicans to really work together?
MEYER: Well, I think Alaskans are going to insist on it. On this side again, the Senate — and frankly I can only speak on the Senate — Sen. Gardner and I work very well together. We have weekly meetings. We met today. We plan on meeting every week going forward. Certainly her team and my team know we have this challenge that has to be resolved, and we know it’s going to require a give and take on both sides in order to get there. I just hope that we’re able to — and again, in the Senate I think we will do this — to keep the rhetoric down. Certainly there are differences in opinion and philosophy on both sides, but in this case we need to set that aside and do what’s best for Alaska.
Senate President Kevin Meyer is a Republican from Anchorage. Tomorrow we’ll hear from Senate minority leader Berta Gardner.