Really interesting discussion in House Finance Committee right now about the state's financial future when governor is not offering any real direction other than to dip into savings and put things up to a vote of the people.
Revenue Commissioner-appointee Mahoney acknowledges that the governor's long-range fiscal plan doesn't exactly pencil out when it requires new revenue but he opposes new revenue without a vote of the people. She says it'll require additional, continued spending out of savings.
House reps ask her if that's her recommendation, to keep spending the Alaska Permanent Fund without a solution.
Mahoney: That would not be my recommendation, but there would not be any other choice.
There's more questions about taxes. Several reps are incredulous that the state's plan is really this thin.
Mahoney reiterates that as long as there's a recession and as long there's not a vote of the people, the governor "is not comfortable implementing a new tax now."
Rep. Carpenter brings the conservative take, asking what the state's doing to increase its non-oil industries and therefore revenue: "I don’t see any recommendations or asks for growing or providing the opportunity for growth in that area. We see gambling but that’s it."
Mahoney says well how about mining? Dunleavy likes resource development.
Carpenter asks what the Legislature can do about it.
Mahoney says it's about federal overreach.
Edgmon comments to say it sure looks like there's no plan before the Legislature and, in his estimation, looks like there's no plan in the administration, either.
He says gambling obviously isn't going to cut it, nor are cuts alone going to... cut it.
Edgmon says Alaska's been a one-trick pony (oil) for a long time but is finally a two-trick pony (oil and investment revenue from the Alaska Permanent Fund) and it seems to be intent on undermining its newfound trick.
Edgmon, exasperated: Have there been at least any conceptual conversations about new revenue?
Mahoney says they've looked at some internally but he's not at the point to implement them because we're in a recession.
Edgmon: So we have to wait until the elections in 2022 for the Dunleavy administration to take any action on this vexing issue?
Mahoney: Yep.
Edgmon: "We’re just not doing our job without looking at the entire picture at this point." He asks if the Department of Revenue would at least help evaluate some of the #akleg ideas on new revenue. Would you at least participate?
Mahoney: Absolutely.
Rep. Rasmussen says that, actually, gaming has been extremely profitable across the country with about ~$40B in local tax revenue. "There's definitely a major impact."
Which I think factors in casinos...
Rep. LeBon asks if the short-term benefits of a mega PFD outweighs the long-term health of the fund.
Mahoney says there's always tension between investors and the beneficiaries.
LeBon says in this case the beneficiaries and investors are essentially the same.
Thompson calls the whole thing a recipe for disaster: "Nobody would want to vote to tax themselves but at the same time those folks would want to have the largest dividend possible. … Now we’re in real trouble."
Asked about the disaster situation, Mahoney: It’s a situation where we all need to educate Alaskans about our fiscal condition so they understand that large dividends with deficit spending puts us long term in a difficult situation.
Ortiz asks what'd happen if Congress passes additional stimulus. Would that change his mind on the size of the PFD?
Mahoney: If checks are in the neighborhood of $1,400 that’s something that could help minimize the draw.
Wool: "What are we going to do to get out of the recession other than handing out checks of $2,000 to $3,000?"
Mahoney talks about the cruise ships and also how people are opting to save instead of spend. "We need to open up!"
(Alaska is already pretty much completely open, by the way)
Wool also notes that some Alaskans are doing just fine despite the pandemic. What's $2,000 going to do for people who're making loads already?
He says it's unbelievable that they want to wait for nearly two years.
Wool says he doesn't really appreciate Dunleavy's suggestion that everything has to wait until a vote of the people to decide what to do about the deficit. The Legislature is the policy makers, sent there by the people, and they shouldn't be waiting around for another 2 years.
That's it for the confirmation hearing (this has been a confirmation hearing, by the way)
The House Finance Committee is not playing around. They held an a.m. meeting, this afternoon meeting (Mahoney confirmation and bonding/credit/debt presentation) and will be holding a presentation on the state's cashflow to 7 p.m. tonight.
"Fun" fact: Alaska's credit rating has been downgraded 10 times already. State official says that they should expect an 11th (and more) if it doesn't take substantial steps to closing its structural deficit this session.
In the House and Health and Social Services Committee, Phil Hofstetter of Petersburg Medical Center says they had more covid-19 cases following the expiration of the disaster declaration than they DURING THE REST OF THE PANDEMIC.
He says that travelers started to ignore travel requirements and individuals started to ignore masking mandates, etc. Behavior was changing, he said, because there was no more public health emergency.
He says the hospital is at capacity for covid-19 treatment. #akleg
They've had to close schools after getting through the pandemic without having any significant closures.
The Senate Transportation Committee is currently meeting on the proposed closures of several DMV offices. Sen. Kiehl notes a lot of stuff--driver's tests, senior tests--need to be done in person.
Admin Commissioner Tshibaka suggests they just change the laws.
Sen. Lora Reinbold responds to Gov. Dunleavy's letter calling her a liar and spreader of disinformation about covid-19 and the state's response. So far a lot of hollering about "illegal" this and "illegally" that.
She pats herself on the back for waiting a week to hold her response because Dunleavy got covid. She wishes him a speedy recovery.
She credits herself with the #akleg failing to pass the disaster declaration. (It'd be the House's disorganization, but whatev, since when has she been about facts?)
If you tune into today's House Health and Social Services Committee, you'll find Americans for Prosperity Alaska testifying in support of more government in the form the Department of Health and Social Services split.
Rep. Spohnholz calls 'em out. Notes the reorganization really only calling for additional execs without any actual plan for improvement. Asks if they really support additional bureaucracy without a plan for improvement.
Rep. Fields notes that AFP has historically opposed public employment. Says their support for additional public employees - even if there's not really a plan for them - sounds like a sea change in AFP's policy.
McKee says that AFP has always respected public employees.
The House Finance Committee has been hearing the budget overview the Senate had several weeks ago, but it warrants repeating that a lot of what's in the governor's budget is short-sighted (either one-time money, one-time cuts).
Legislative Finance Division Director Painter reminds them that overdraws on the era comes at the cost of increased future deficits. "Every time we overdraw, it increases future deficits ... which means we have to reduce services even more or raise taxes even more."
Aaaaaand we're off with the first Senate Judiciary Committee meeting of the 32nd Legislature with chair Sen. Lora Reinbold, a mask and election denier, rocking the clear face shield.
Reinbold says they'll be posting parts of the U.S. and Alaska constitutions on the wall: "Super important to recognize that it’s the supreme law of the land."