Representative Jonathan Kreiss-Tomkins serves several Southeast island communities including Petersburg and Sitka. In a recent visit to Petersburg he talked about the special session.
“What I would hope to see is a comprehensive fiscal plan that puts Alaska on a sustainable fiscal path into the future,” Kreiss-Tomkins said.
You can hear the tongue in cheek. Kreiss-Tomkins has been working for months on a fiscal plan and just doesn’t think it’s likely that lawmakers will come together in the near future.
“Just given the composition of this Legislature that we have right now it has proven itself resistant to adopting the proposals the Governor’s put forward,” he said.
Those would include vetoes worth $1.29 Billion. It cuts the Alaska Permanent Fund Dividends to a flat $1,000 per person. That would save the state over $666 million this fiscal year.
And the vetoes would delay $430 million in subsidy payments to the oil companies this year.
“I mean that’s the part that makes me want to pull out the hair that I don’t have,” Kreiss-Tomkins said laughing.
He says the state will still have to pay the money in the future.
“The most accurate way to describe it is we’re just delaying the payment of those subsidies,” Kreiss-Tomkins said. “And it’s kind of symbolic, it’s telling the oil industry, this has got to stop. We can’t afford to be writing hundreds of millions of dollars of checks every year.”
But just delaying those payments this year won’t solve the problem, he says. He sees ending the tax breaks to the oil industry as the best way the state could help balance the budget right now. The program was put into place back when the state was flush with money to spur development. But Kreiss-Tomkins says it’s no longer affordable. He gives this Petersburg analogy:
“I saw Jared Bright’s boat, when I came in on the harbor, getting work done and the equivalent to the fishing industry to what’s happening with oil and gas is, right now in the real world, Jared is going to pay 100 percent of whatever work he’s getting done at Piston and Rudder. If the same programs existed for the fishing industry that exists for oil industry upwards of 85 percent of the costs of the work Jared is having done would be directly paid for by the State of Alaska and he would pay 15 percent. I mean, these credits if they stack up in the right way, upwards of 85 percent of capital costs are paid for, which is why we find ourselves writing $775 million in checks,” Kreiss-Tomkins said.
That figure–$775 million–comes from oil and gas credits that the State already owes the industry this fiscal year.
As for any of the recent vetoes by the Governor—like the $58 million dollar cut to education—Kreiss-Tomkins doesn’t think it’s likely they will be overridden by the legislature. It would take a three-quarters vote.
“Of both bodies,” Kreiss-Tomkins said. “I would peg maybe a 15 percent likelihood, pretty low.”
So, what will happen in the special session? What will come of law makers going back to Juneau to come up with a fiscal plan?
Kreiss-Tomkins is not too optimistic.
“I certainly don’t think a fair and equitable version of the plan would be adopted by the legislature so my expectations are low, unfortunately,” he said. “And I, of course, hope for otherwise.”
Despite his somewhat dreary outlook, Kreiss-Tomkins will continue to go after what he calls a “sustainable fiscal path into the future”.