Sen. Pete Kelly

GUEST COMMENTARY: Treating the dignity deficit

Here’s the question: should Alaskans who receive Medicaid be required to work or volunteer as a condition of their benefits? I believe so, and two weeks ago I introduced SB 193 which would require Medicaid recipients to engage with their community through employment, volunteerism or subsistence activities. First, the facts: SB193 does not require new mothers, the elderly or the disabled to seek employment. We reviewed proposed Medicaid work requirements from other states and crafted our exemptions to ensure that the Medicaid safety net continues to work for those who need it most. In pursuing a work requirement, Alaska would join 10 other states already moving forward with similar efforts. SB193 carefully carves out exceptions for our most vulnerable and provides exemptions for job training, serious students, caregivers and more. With Alaska’s uniqueness in mind, we included a work credit for subsistence activities as well. Many of the 196,000 Alaskans on Medicaid already work, and some of those who do not are covered by one of the bill’s exemptions for education or caregiver activities. Senate Bill 193 is crafted to apply to a narrow band of Medicaid users: those who could work, but choose not to. Like all of us, Alaskans on Medicaid have dreams for a better life. When plans don’t work out and setbacks occur, it’s easy to lose heart and stay where it is most comfortable – receiving government benefits. But a life of government dependency can be isolating and unfulfilling. People grow when they plug into a larger community – they need to belong. Beyond the dignity of productivity, work opens doors to a larger community of friends and associates. Work provides us with a reason to step out the door in the morning and stand side by side with our fellow Alaskans making our state a better place. Detractors say the idea that work has inherent dignity is old-fashioned and has no place in modern public policy debate. I disagree. American public discourse has always held certain truths to be self-evident. The value and dignity of work as one of these truths is foundational to our nation’s success. Engaging in the workplace or volunteering for a non-profit allows everyone the opportunity to earn a reputation for reliability, gain new skills and develop valuable networks. Some observers will assume that a work requirement for Medicaid is about saving money. While savings would be welcome, they are not the primary motivation nor are they likely to materialize in a meaningful way. In fact, I anticipate modest costs to implement and enforce the work requirement. That’s right, I am willing to spend some money if that’s what it takes to help Alaskans move away from the debilitating effects of dependency and forward towards self-sufficiency. We’ve spent billions on dependency – I’m willing to spend a small fraction of that to encourage Alaskans on a path toward independence. It is rare in politics to find a win-win policy. So often it seems new proposals just take from one hand to give to the other. By contrast, a Medicaid work requirement benefits everyone. It increases the pool of volunteers Alaska non-profits need to serve our most vulnerable and it encourages able Alaskans to move towards education and job experience — the surest way off a treadmill of dependency and onto the road towards independence. Pete Kelly, R-Fairbanks, is the President of the Alaska Senate.

GUEST COMMENTARY: End cash payments without raising oil taxes

For six months, politicians of all parties in Juneau have sung a similar song: the state can no longer afford to offer cash payments to oil and gas companies for work we’ve incentivized these companies to undertake. These cash payments are costing the state an estimated $1 million per day through the end of 2017. That’s a lot of money — $1 million could fund seven state troopers for a year. The $200 million we’ll owe in cash payments by the end of the year could fund the entire Department of Law and Department of Public Safety — for a whole year. Make no mistake: the incentives of cash payments and credits have worked. They spurred a renaissance in Cook Inlet oil and gas work, ending the rolling brownouts of six years ago. They’ve brought a new slate of fresh companies to the North Slope, who are exploring for the oil we’ll need to keep TAPS flowing strong. Yet, the state can no longer afford these incentives. Despite this year’s budget reductions, Alaska remains in a deficit. Oil prices are $6 to $10 lower going into the fiscal year starting July 1 than the state is forecasting. We all know that when you’re in a hole, the first thing you have to do is stop digging. And we can. There’s a simple way to end these cash payments. Let’s return to Juneau and finish the work before us. Let’s end cash payments for oil and gas companies. The Republican-led Senate Majority extended a new offer to the Democrat-led House Majority to resolve this issue — to stop the cash bleed. We’re willing to take up a compromise bill that addresses these cash payments and tax credits. Our offer was met with an immediate, outright rejection by the two House members negotiating this issue. The House likewise issued a flat refusal to a different proposal by Gov. Walker weeks ago. Ending cash payments isn’t enough for them — they’re willing to walk away unless they can force a significant tax increase on oil production. But the clock is ticking, and costs are accumulating. We remain optimistic that after their full caucus thinks over the $1 million per day implications of inaction, they will reconsider our offer to act on what we agree is in the best interests of Alaska. The Senate is standing by. Both the House and the Senate this session passed versions of a bill that would end cash payments to oil and gas companies. But, we’ve been unable to reach a final compromise. The House Majority is holding out, refusing to end cash payments unless we in the Senate agree to increase taxes on oil production, taking even more than the 77 percent of the profit we get now. That’s right, for every barrel of oil coming out of the ground, the State of Alaska reaps 77 percent of the profit at today’s prices. With the energy sector already losing jobs and struggling to weather global price pressures, now is precisely the wrong time to squeeze the industry that has funded our roads, schools and prisons for decades. The Senate believes, as many Alaskans do, that the current oil tax system is working for the state’s advantage. We’re taking in more revenue under our current tax system than we would have under ACES. More small, agile companies are working in our oil patch, which means more opportunities than ever for Alaska workers, support companies, and service sectors. While we disagree on broader changes to our oil tax regime, the House, Senate and governor do agree that we must end cash payments to oil companies. We can, and should, end this program without delay. The House Majority says they want to end these payments — we ask them to act with us to accomplish this work for the good of Alaska. We ask the House Majority to reconsider. Politics remains the art of the possible, which requires compromise. We can only advance those issues on which we all agree — and we’ve all agreed the cash payments must end. Sen. Pete Kelly, R-Fairbanks, is the president of the Alaska Senate.

GUEST COMMENTARY: Senate will stonewall tax hikes

Today I’d like to share with you the Senate’s vision for Alaska’s next steps forward into the 21st century. We now face a harsh economic reality where world energy sources are cheaper and more diverse than ever before. Oil prices are low, and may stay that way. Thanks to the statesmen of the 1970s, Alaska remains rich in a more universal commodity, cash. With over $60 billion, Alaska’s capital resources can earn more than all our oil wells combined. And I suspect that cash, unlike crude, won’t ever fall out of favor with the cultural elite. On March 15, the Senate passed Senate Bill 26, a modified version of the Governor’s Permanent Fund restructuring plan. On April 12, the House of Representatives passed the bill with some changes to the details. Dividends under our version would be about $1,000 and, under the House version, about $1,250. But on top of these variations, the House included completely new requirements. In order to transition our capital resources onto a modern sustainable Percent of Market Value foundation, they’re demanding that we in the Senate institute new taxes. Apparently, it’s not enough to use a portion of dividends to keep the lights on. You, the working public, need to be hit where you will feel it even more: your paycheck. There may come a day when maintaining effective government requires invasive taxation. War, fire, floods and earthquakes litter Alaska’s past and may strike again at any time. Thankfully, that’s not today. By leveraging our reserve accounts wisely, Senate Bill 26, without any new taxes, will fund our government beyond the horizon of reasonable predictions. Here’s how: First, our Senate Bill 26 covers about 88 percent of the present fiscal gap, intentionally leaving a small budget deficit of about 12 percent, easily covered by our reserves for a decade. This small deficit ensures that there is continued accountability on government to seek new efficiencies and streamline operations. It is my position that if you are paying half your dividend to government, it had better be kept away from the all-you-can-eat buffet of public money. Second, our version of Senate Bill 26 actually begins growing the Constitutional Budget Reserve after 2022, according to the nonpartisan Legislative Finance Division. A growing CBR equals sustainable government: keeping schools open and roads cleared, indefinitely and without new taxes. The Alaska IRS can remain where it belongs: a progressive dream and a collective nightmare. So, if the Senate’s plan leads to a replenished CBR and fully-funded government operations, why would we want to hire 65 new Alaska IRS bureaucrats to come after you? I have no idea. When progressives want to reduce smoking or super-sized sodas, what do they do? They raise taxes on them with the stated intention of stamping out consumption. But when those same groups advocate for taxes on the income from jobs, they insist that employment will not go down and that jobs will not be lost. How are both possible? We believe just as taxes on tobacco reduce smoking, taxes on labor must inevitable hurt workers, reduce job creation and trip up our stumbling economy. With Alaska jobs under pressure, this is precisely the worst time to enact a needless tax on employment. Yet, in a press conference this Tuesday, the House Rules Chair stated, “If the Senate think we are going to get out of here (Juneau) with just Permanent Fund changes (no income tax) they have another thing coming.” I expect the rhetoric will get worse before it gets better. You will read in the papers that the Senate is stonewalling, that we are obstructionist. The TV will say we eat puppies and squash ladybugs. The bureaucrats will grumble that our plan is “incomplete”, that our Senate Bill 26 wouldn’t actually work the way Legislative Finance says it does. You will hear many things about us, and most of them won’t be pleasant. But we aren’t working for popularity with the beautiful television people, the cynical press, or the bureaucratic institutions who will never be satiated by more public spending. The members of the Alaska Senate majority are fighting for you, for your paycheck and for your job. The only thing standing between you and an income tax is the Senate. Sen. Pete Kelly is the president of the Alaska Senate and represents Fairbanks.
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