Knowles, Palin & Halcro: History Says A Lot About Leadership

Andrew, I'm an undecided - certainly not Palin, it is now down to you or Tony. I had forgotten that Tony could have signed the fiscal plan instead of taking it to a vote. I campaigned hard to get that thing passed. As a school board member I was and am still very concerned at our lack of a fiscal plan. But as you ding Tony for not getting things done during his 8 years, I recall great idea after great idea shot down in flames by the republican majority. Didn't want him to look good regardless of the cost to the people of Alaska. Remember the A+ plan. Granted some were dusted off later, renamed and brought out as majority ideas. I'm sick of partisan politics and you are a tempting choice. But I don't want to vote for you if the polls show you can't win. I know - vote for what you believe in. Been there and done that for too many years. I guess I'll just keep listening and watch the polls. Next Monday will be key, me thinks.

I voted no in that election because it seemed a little unfair to folks in a lower tax bracket. What about a progressive income tax to go along with it. The sales tax seemed a impossibility due to so many communities already having one.

Andrew's Response:

I'm not in favor of a progressive income tax. In Alaska we have a very transient population, many of whom will never pay to support the cost of state government. The average income from a non-resident worker is less than $15,000 per year which means a majority of the tax burden will fall predominantly on those who live and work in Alaska.

Since we'll send out almost $700,000,000 a year in dividends this fall to qualified Alaskans regardless of their income, we likewise shouldn't discriminate based on income when collecting revenue to pay for the services. In addition, Alaska has one of the most generous state governments in the country. From rural heating subsidies to very strong social safety nets, Alaska does a very good job providing for low income Alaskans.

In fact, I would argue we need to begin to wean ourselves away from the serious entitlement mentality we have cultivated in this state over the last two decades. With declining oil production and reduced federal revenue into the state, Alaska will need to become more independent in providing services for our residents.

Generous programs in addition to a yearly dividend have shown to be a magnet in attracting families to Alaska which will continue to drive up the cost of local and state governments.

A sales tax is also problematic. Almost 100 communities in Alaska currently have a sales tax. Many of these are rural communities where an additional 2 or 3% would cripple local economies already struggling with a much higher cost of living.   

With higher oil taxes and strong fiscal management Alaska should be able to continue without a broad based tax for the near term. A fiscal safety net similiar to the POMV would protect critical state investments in time of low oil revenue.

Allof these factors again make the case for pushing ahead on an equitable natural gas pipeline contract.

I'm not sure I understand the link between a fiscal plan and the drop in the PFD. Wouldn't the PFD have declined anyway because of the market drop? Jesse Zink http://nomeak.blogspot.com

Andrew's Response:

The fiscal plan as proposed would have changed the calculation of the yearly dividend away from the five year average that has historically determined the payout amount.

The reason the dividend has dropped so dramatically over the last few years has been directly related to the fall in stock market earnings and the subsequent impact on the five year payout mechanism. Last year at $845, you saw the dividend finally hit the base line curve of the five year averaging.

The fiscal plan would have stabilized the dividend before the market drop by getting away from the five year averaging, which would have provided Alaskans thousands more in dividends over the last few years.