AJOC EDITORIAL: A Christmas wish list for 2017

The next year could be even wilder than 2016, if that’s possible.

In less than a month, Donald Trump will be sworn in as the 45th president of the United States and the Alaska Legislature will convene in Juneau for its last serious crack at addressing the state’s burgeoning budget deficits.

It’s almost appropriate that one of Gov. Bill Walker’s last acts of the year was to kill the Juneau Access Project, because the Legislature has run out of road to kick the can.

The state’s savings won’t last more than another year and we’ll have to wait and see whether the dynamic of a three-way power struggle between the Republican Senate, Democrat House and independent governor forces a solution or only produces gridlock worse than what we’ve witnessed in the last two years.

Still, the ringing in of a new year is supposed to bring optimism and in that spirit here is a wildly optimistic wish list for 2017:

Stop pandering and fix the problem

This goes for both the budget hawks and the tax credit hawks heading to Juneau. To the budget hawks: Stop pretending there are hundreds of millions of dollars still to be cut out of the budget.

No doubt there are cuts that can be still made, and efficiencies to still be found, but none of it will add up to enough to avoid using Permanent Fund earnings, and thus reducing the dividend, or raising additional tax revenue.

There was bipartisan squealing when Walker cut the PFD appropriation by $666 million, but nobody on the right or the left side of the aisle ever put forward a plan to reduce the budget by that much.

Any tax increases, however, should go to the right places in the budget. Raising the fuel tax makes sense if it helps the Department of Transportation budget. The same goes for fish taxes.

To the tax credit hawks (and Walker): Pay the state’s bills. It doesn’t matter where you come down on the credit issue; this money is owed and it has to be paid sooner rather than later.

Democrats, and the Republicans who switched sides, are doing great damage to the state by demagoguing this issue as credits versus PFDs.

By all means, find a way to replace the credit program with something else that will still encourage development such as royalty modification (if they want to forgo future revenue to avoid the up-front development costs), but the state must get right with the companies it owes.

Democrats howl about “Big Oil” benefitting from the credits but in fact it’s “Small Oil” that is getting screwed and being forced to sell off credits to the majors to raise cash, and therefore reducing future state revenue.

The best thing the majority leadership has done is put Reps. Andy Josephson and Geran Tarr as co-chairs of the Resources Committee. They both seem to get that the state has become an unreliable partner to industry, and that whatever changes take place must first do no harm. Paying the bills would be a good place to start rebuilding the state’s reputation.

Tax and regulatory reform

On the federal side of things, we’ll see if noted budget guru House Speaker Paul Ryan has the stuff to finally fix our bloated and onerous tax code.

Corporate tax reform should be a must. Ours is the highest in the world and yet accounts for less than 10 percent of tax receipts.

That’s because corporations do everything they can to minimize their bills, often paying effective rates far less than 35 percent through deductions and exemptions, keeping their overseas profits offshore, or up and moving completely out of the U.S.

For those who complain about the influence of lobbying in D.C., you could probably wipe out half the lobbyists, lawyers and accounts there if you cut the corporate rate to 15 percent and removed all the incentives to game the system.

The same goes for regulatory reform. The bigger the government gets, the more big business gets to take advantage. Dodd-Frank is a prime example of how a regulatory reform kills small players and benefits the big hitters.

A smaller government is less influenced by big money.

Obamacare

The word is the Republicans have a plan in place to repeal it. Whether they have a plan to replace it is less certain.

One easy fix should be on the table, as should one fundamental one.

The easy fix is knocking down the state line barriers to buying coverage. Nobody understands this better than Alaska, where we’re left with just one provider in the individual market because our small population is almost impossible to manage as a risk pool.

Put us in a pool with 300 million other Americans and premiums would drop instantly.

The fundamental fix should be transferring to a system where all individuals own their policy and don’t depend on an employer to provide it.

Nobody loses their car insurance or life insurance or home insurance if they lose or leave a job. A system where you own your health policy and can shop for it in a national marketplace like every other insurance product would go a long way toward finally putting the “Affordable” in the Affordable Care Act.

If the legislators in Juneau and the new Congress and president could pull off this wish list it’s going to be Merry Christmas indeed in 2017.

Updated: 
12/22/2016 - 10:52am

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