AJOC EDITORIAL: The deadbeat, do-nothing Legislature

  • The Alaska Legislature accomplished virtually nothing despite spending more than 180 days on the clock in 2017. (Photo/Becky Bohrer/AP)

Alaska has less oil production than California and a credit rating just better than Illinois and New Jersey, yet 51 incumbents will run for reelection next year with at least one of them seeking a promotion.

A day after this column goes to press, the Legislature will meet for a day in Juneau to pass the capital budget that — like everything else its members did or didn’t do this session — should have been finished three months ago.

The self-congratulatory back-patting is nauseating.

Instead of passing a bill both sides agreed upon to use Permanent Fund earnings in a sustainable fashion to cover part of the budget, the Legislature burned through another $2.5 billion from the Constitutional Budget Reserve.

Instead of passing an increase in the motor fuels tax to fund transportation projects and address a growing backlog of deferred maintenance — again, that both sides agreed to — they did nothing and pulled the money from the general fund.

Instead of beginning to settle the hundreds of millions in unpaid liabilities owed to small oil companies that already spent the money in good faith, the Legislature ended the program and will stiff those companies for a third straight year after Gov. Bill Walker vetoed $630 million in payments in 2015 and 2016.

Deadbeat and do-nothing barely begins to cover it.

While much of the blame lies with the Democrat-led House Majority for dragging out the process for months in their insistence to institute a $700 million income tax on an economy in recession and double or triple oil production taxes as the industry sheds thousands of jobs, the Senate Majority and Walker can shoulder some responsibility for hanging the state’s breadwinning business out to dry.

Sure, the Senate tried to pay off about half the outstanding credit bills in its version of the capital budget but its negotiators folded like linen and are taking less than a tenth of what they proposed in the “compromise” budget set to pass July 27.

The biggest crock coming from everyone in Juneau is that the state can’t afford to pay off the tax credits. Between the Permanent Fund Earnings Reserve and what’s left in the Constitutional and Statutory budget reserves, the state has about $15 billion.

For less than 5 percent of that balance the state could pay what it owes, put this debacle behind us and restore some semblance of credibility to its self-proclaimed “partner” status with the oil business.

Some partners.

If the state and the oil business were partners, there would be one who does all the work and generates the company revenue while the other lazes around the office spending the money, giving itself annual raises, letting invoices pile up and demanding an ever-increasing share of the profits.

The Senate Majority can talk a good game about wanting to pay the bills, but every one of its members were fine with skipping out on the Downtown Anchorage office building they commissioned and leaving its owners on the hook for a $28 million loan and losing their $9 million cash position.

There is no squaring the circle of arguing the damage caused to small companies by holding out on tax credits owed while ignoring the financial ruin put on a pair of Anchorage real estate developers who made the mistake of relying on the signed commitments of the Legislature.

Some have and will counter that both the oil companies and the developers knew what they were getting into and should have no recourse, which is akin to the parable of the woman and the snake.

After nursing the injured snake back to health, the snake eventually bites the woman and as she’s dying of the poison she asks, “Why? I was your friend.”

“Lady, you knew I was a snake when you picked me up.”

That won’t be anyone’s campaign slogan next year, but at least it would be an honest one.

Andrew Jensen can be reached at andrew.jensen@alaskajournal.com.

Updated: 
07/26/2017 - 12:35pm

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