In 1985, a reporter from the Christian Science Monitor flew out to see Jay Hammond.<\/p>\n
The former governor obliged her, showing her around his 160-acre homestead in a section of wilderness named this year in his honor.<\/p>\n
Hammond eventually sat down for an interview and made a prediction: The pinch is coming.<\/p>\n
There would come a day, Hammond said, when oil revenue would slip and the state would be confronted with the bill for the service it provides its residents.<\/p>\n
Hammond was right, and the pinch is today.<\/p>\n
On Wednesday, Gov. Bill Walker proposed the biggest change in the state\u2019s system of taxes and revenue since Hammond was in office. Walker\u2019s plan includes tax hikes for alcohol, tobacco and gasoline. It erases the state\u2019s oil tax credit program for drillers and raises the floor on production taxes. It would effectively halve the amount of the Permanent Fund Dividend and turn the Permanent Fund into a money factory producing $3.2 billion annually for state services.<\/p>\n
Beyond all that, it would impose an income tax on Alaskans.<\/p>\n
In his last book, \u201cDiapering the Devil,\u201d Hammond wrote: \u201cIn 1980, the legislature abolished Alaska\u2019s income tax in what I, at the time, asserted was the most stupid thing we could do. Reduce or suspend, but don\u2019t take it off the books completely, for it will prove almost impossible to resurrect, no matter how desperately needed.\u201d<\/p>\n
Hammond was right.<\/p>\n
Walker\u2019s proposal is all but certain to change when the Alaska Legislature convenes on Jan. 19. For the state\u2019s sake, we hope those changes are improvements rather than an outright rejection of the governor\u2019s ideas.<\/p>\n
Alaska has run out of time. If we do not act in this year, we will have neither the money nor the time to change the way our state government operates. Without action, the consequences are catastrophic: <\/p>\n
\u2022 No dividends after 2020;<\/p>\n
\u2022 Massive budget cuts;<\/p>\n
\u2022 Surging tax increases;<\/p>\n
\u2022 Business flight;<\/p>\n
\u2022 Population loss;<\/p>\n
\u2022 Economic recession or depression.<\/p>\n
Walker has proposed an income tax that, if implemented, would be the lowest among all states that collect such a tax. For every $100 in tax you pay to the IRS, you would pay another $6 to the state.<\/p>\n
Without Walker\u2019s plan, your dividend would be more than $2,000 next year \u2014 but it would disappear after 2020. With Walker\u2019s plan, your dividend will be $1,000 next year, and you\u2019ll keep getting dividends \u2014 and so will your children and grandchildren.<\/p>\n
Walker\u2019s plan also includes cuts, including millions from the Alaska Marine Highway that will lead to the layup of the state\u2019s fast ferries. <\/p>\n
Other state departments, including the state\u2019s tourism and seafood marketing divisions, will face steep cuts as well. Juneau \u2014 whether you agree with the situation or not \u2014 depends upon state employment. More than 10 percent of the borough\u2019s population is employed by the state of Alaska. <\/p>\n
As Walker said Wednesday: \u201cI guarantee that everyone in Alaska will find something in this plan they don\u2019t particularly care for.\u201d<\/p>\n
The Alaska Legislature has one month until it meets and begins considering Walker\u2019s plan. It is our conclusion that Walker\u2019s notion is unpleasant but ultimately necessary. While we are open to other ideas, we have not heard a plan as comprehensive as the one unveiled by Walker on Wednesday.<\/p>\n
Empty calls to \u201ccut the budget\u201d are not a plan. \u201cDon\u2019t take my PFD\u201d is not a plan.<\/p>\n
The worst plan of all, however, is the plan that involves doing nothing.<\/p>\n","protected":false},"excerpt":{"rendered":"
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