Please Weigh in on the Republican Senate Majority’s Ill-Conceived Fiscal Plan

Last week, the Republican Senate Majority introduced SB 70, a counter proposal to HB 115, the fiscal plan proposed by the Democrat-led House Majority. Unlike House plan, the Senate included an ill-conceived spending cap and failed to include an income tax.
Here’s the good news: The Senate Republicans are finally admitting that cutting our way to a recession, which they HAVE been doing, just won’t solve the deficit. Here’s the BAD NEWS: it won’t work, it is likely UNCONSTITUTIONAL, and it is avoiding the tough job that we all understand must be done to produce a fiscal solution.
Reasons why the Senate Republican plan is bad for Alaska: 

·  Spending caps violate Article II of the Alaska Constitution, the provision that governs the Legislature’s passage of a budget to the Governor each legislative session. There is no mention of the implementation of a spending cap, which signals that the Founders did not intend to include this as a mechanism to control the budget.  Passage of this provision will likely result in expensive challenges before the Alaska State Supreme Court, leading to the state owing exorbitant attorney fees and other inevitable monetary losses during a recession of historic proportions.

·  Article I of the Alaska Constitution, the provision governing legislative appropriations, mandates that current legislatures must not bind the hands of future legislatures.  A spending cap is contrary to this rule, and could also result in expensive legal challenges.

·  Spending caps limit state growth and don’t account for increases in population, family size, or industry.  A healthy state economy is one that grows each year.  Lack of flexibility in state spending inhibits growth and prevents the type of development and expansion that makes Alaska thrive.  According to SOA Department of Labor estimates, Alaska’s population is projected to increase from 737,625 in 2015 to 899,825 in 2045.  Alaska’s population has been growing for decades and we want to encourage this development and evolution, not stifle it with inflexible spending limits that won’t allow to pay for essential state services.

·  History proves that spending caps just don’t work.  We have seen failed attempts many times, from the state of California under the banner of Proposition 15, to Anchorage’s own spending cap, modeled after the California failure.  Spending caps were once favored mechanisms but are now falling into disfavor on the Left and the Right.

·  Finally, the spending cap is just a false flag by Republicans who want to distract our attention from the tough choices they don’t want to make. After all, a spending cap does nothing to close the fiscal gap.

Instead of playing these political games, the Republicans need to do their job, which primarily consists of working with the House to pass a sustainable, comprehensive plan this year.  We cannot afford to waste time on convoluted ideas that do nothing to address the actual problem of a lack of revenue and dwindling state savings.
If you would like to weigh in on this foolish plan, please call members of the Senate Finance Committee to make your voice heard:

Co-Chair Senator Lyman Hoffman  465-4453
Co-Chair Senator Anna MacKinnon  465-3777
Vice Chair Senator Click Bishop  465-2327
Senator Peter Micchiche  465-2828
Senator Mike Dunleavy  465-6600
Senator Natasha Von Imhof  465-2995
Senator Donny Olson  465-3707