March 22, 2017
Wednesday PM

I think most are starting to come to grasp with the state budget deficit and what it means; Ketchikan is a smart town.

I have lived in every region of the state, spent part of my school years in the YK delta, worked in Bethel as a young Alaskan and served as a State trooper; making seven moves over nearly 26 years. I’ve watched this state change dramatically over the years; we used to be so much more, rugged, independent. I remember as a kid driving with my dad down 4th Avenue in Anchorage seeing a sign on a building that said something about a “Chechacko”; ask an old timer what that means.

I never used to be so conservative, but the things I witnessed as a trooper over the years changed me. A turning point in my life occurred in the early 90’s when I was stationed at Talkeetna post. Trooper posts encompass vast regions and at the time Talkeetna post stretched from the MatSu valley, half way to Fairbanks and equally as wide; larger than many states. I remember being told once by a supervisor that if you run “code” to a call at the other end of your patrol zone, make sure to leave your car running after you get there, or the engine heat could cause a car fire (used to happen with the old cruisers). Driving for more than an hour at speeds of exceeding 100 mph was common.

In those days a Trooper stationed in a remote area was essentially the local Sheriff and after a few years one could easily meet and come to know most of the citizens. This level of familiarity made it easier to solve crimes and identify who was causing problems. Back in those days Troopers generally worked alone and assistance could be an hour or more away. On more than a few occasions locals were my backup. One time while on the Parks highway near Caswell Lake a local stopped to help after he saw me fighting an individual I was trying to arrest on multiple warrants; he kept me from getting hurt that day.

Starting in the mid 90’s, I started seeing a large influx of new comers in this region. At first I really didn’t understand why all these people were moving to a remote area with so few jobs. As I got to know the new arrivals, many had a similar story. Most were from the lower 48 and wanted to “live off the land”. Locals called them “Mother Earthers” a reference to the magazine. They would buy the cheap land in the region that could be obtained for as little as $500 per acre and many would set up crude cabins that in many cases were simply built from the logs they obtained from their land. These people quickly became completely dependent on the state. I can’t begin to tell you the scores of problems and expenses this started to cause for Alaska.

The first issue was that most of these people were the poorest of the poor. They were the hard core unemployed pushed out of their communities in the lower 48 due to welfare reform and their states cracking down on welfare abuse. In the mid 90’s Alaska received an exemption from the national welfare reform law which allowed citizens in over ½ of Alaskan communities to collect welfare for life with little or no work or job training requirements. This, plus the allure of the PFD, free medical, tax free and cheap land, subsidized heating/energy, food stamps, etc. made remote Alaska a magnet to the hard core unemployed from all across the country. I know this because I knew the people in my area and watched the problem increase, year after year. I even lived next to a family that had been on welfare for 17 years at one of my assignments.

Anyway, as more of the nation’s poor migrated to Alaska our problems and social spending costs skyrocketed. One such problem was assuring that children living in these crude conditions, in marginal structures, were adequately cared for. A constant struggle for Troopers is…at what point is a rustic cabin with a dirt floor, no electricity, no running water/sewer a danger for the young, the old? The answer was always… it depends. At this time in our state history you will see the beginning of large increases in state social workers who would accompany the troopers to frequently address these concerns.

Other problems increased as well. Large populations of people who were unemployed (we all know the parable about idle hands) caused dramatic increases in crimes of all types, with sexual assaults, domestic violence, substance abuse and suicide all started spiraling out of control. The first time I watched someone die in my arms was in this region. I received a late night call requesting a welfare check on a lady living in a remote cabin. Even though I ran code the entire way, it still took me nearly an hour to get there. As I walked in the cabin I saw a middle aged lady laying in a bed, covered in blood with a large portion of her right abdomen obliterated; she was still alive. A shotgun was on the floor and I asked her “who shot you?”… she replied “I shot me”. There was nothing I could do for her; medics were still a long ways away. I simply held her hand and stayed with her and she died about a minute later.

I could also tell you about the story about “mayonnaise man”. I was working the Parks Hwy one summer day when I was dispatched to the Trapper Creek area. A cab driver from Anchorage drove a man three hours north to this region where he was asked by his fare to drop him off in the middle of, well…nowhere. No houses, businesses around… nothing. The cab driver felt uneasy about just dropping this guy off in the middle of the woods, so he called the troopers. After I arrived on scene I was taken back with what I saw. The trunk of the cab was overflowing with plywood pieces cut into small pentagon shapes. Inside the cab was filled with gallon size containers of mayonnaise and commercial sized containers of lemon juice.

I took the cab driver to the side and he told me the following story. He said that he picked up the man at the Anchorage airport, who requested to be taken to a lumber yard where the man paid to have plywood cut into the odd shapes. From there, he took the man to Costco where he bought numerous jars of mayonnaise and lemon juice. They filled every available space in the cab and the man then told him to “drive north”. Several hours later, the man asked to stop the cab in a remote area and let him out. At that point the cab driver called the troopers because he was worried the man had mental issues.

I talked to the man and quickly learned that he had a contentious relationship with his family (I forget where in the lower 48 he was from), but that they (his family) “got tired of him” gave him $5000 and a plane ticket to Alaska. The man wanted to “live off the land” in the wilds of Alaska, and told me that he intended to use the plywood to build a sod shelter and that the mayonnaise and lemon juice was to cleanse his body.

As you can imagine, at this point I started to suspect this person may have some mental health issues. A tool law enforcement (LE) can use to get a person mental health treatment is called a “Title 47”. Basically, LE can offer a free, state paid mental health screening to any person, at any time. If they voluntarily accept they will be taken to a medical professional that will conduct a screening and if necessary get the person the help they need. If they refuse, the only other option for LE is to prove one of two elements in order to deprive to person of their liberty and forcibly take them in for a mental health examination. Those criteria are, gravely disabled, or likely to cause harm to themselves or others. It’s a high hurdle because back then the courts would tell LE, people have a right to be weird.

Anyway, the man refused to voluntary allow me to transport him in for a mental health screening and I had insufficient evidence to deprive him of his liberty. I tried many other things to help, but ultimately he was, at his request, dropped off on the side of the road. I spent the next few days checking on him, until one day I could not find him. I went to the nearest community and discovered he used his remaining cash to have a local pilot fly him out to a remote lake (no road access). I asked the local pilots to keep an eye on him, the best they could, and a few months later was told that they were no longer seeing smoke from his makeshift hut. This was enough to justify expending state funds for a welfare check.

What we learned was this man had dug a hole in the ground, near this remote lake, used the wood to build a very crude shelter and had been living off of mayonnaise and lemon juice. When we found him he was emaciated, black with soot and covered in waste. This provided enough evidence to forcibly take him in for a mental health examination.

Now if I can digress for a moment to talk about mental health treatment in Alaska; in many cases it’s a revolving door. LE will make an initial assessment. From there a person is delivered to a local hospital where a “health professional” will conduct a secondary evaluation. If the medical facility feels that the Title 47 criteria are met, they can do an involuntary hold for 72 hours and/or transfer to an advanced mental health facility such as Alaska Psychiatric Institute (API). In most cases, people transferred to API stay a week or two, generally until they have been stabilized with medication and are then released. For those with severe mental health issues this becomes a “revolving door” every time they go off their meds, and they are returned again, and again. In Ketchikan, people needing advanced mental health treatment are flown to Anchorage, sometimes in a private charted jet (think about how much that costs).

Anyway, here is the rest of the story of mayonnaise man (what the locals called him). Every time we had sufficient cause to do a forced mental health examination we would take him in. Weeks later he would be released (they wouldn’t tell us when) then at some later point we would discover he was back out at his home sight. This cycle repeated over and over. I even asked the local pilots to stop flying him out, but he would just find someone else in another community to take him back. We tried everything allowed by law, until he eventually traveled to another remote area where I was told he had died.

In the late 90’s to early 2000’s I was stationed at Glennallen Post. This area is a few hours drive north of Anchorage and encompasses a vast region also larger than many states. The numerous communities in this area are all tax free. Every service is provided by the state and federal government free of charge. Public safety, education, road maintenance, health facilities, community buildings etc. all free. No one cares about how much public services costs because it simply doesn’t matter. The State/Feds pick up the entire costs and the increases year after year. After I arrived at this post I bought a house in Glenallen in a subdivision the locals called “Snob Hill”. This area consisted of numerous high end homes built during the days of pipeline construction; I was told it was housing for “oil executives” at one time. My home was worth about $300k (would be worth ½ mill in Ktown) and I never paid a penny of tax on it. I knew several Alaskans who built expensive retirement homes in this region, including many waterfront homes on the Copper River. All the mines, lodges, stores, tourism businesses (Wrangell St Elis National Park) everything… tax free and still is.

As you can imagine, the free services plus lifetime welfare attracts the poor from all over the country. I could tell you another story of Papa Pilgrim and his 16 family members who moved to a tax free area near McCarthy, in the early 2000’s. From what I know about this family they moved from Texas to McCarthy because “Papa” had run-ins with law enforcement and was getting pressured by Texas to do something productive and get off of their social services. Anyway he moved to McCarthy, obtained land near the national park, lived for free and probably easily cost the state millions before Troopers arrested him for serious crimes. He later died in prison.

I literally saw thousands of people in my career who moved to Alaska and became dependent on our social services and more are arriving daily. I could write a book with all the stories of those that abuse our social safety nets. I could tell you how many states will not extradite their criminals who flee to Alaska. For them its “good riddance” for us, it’s an expense and in many cases additional problems.

Let me give you an idea of what the state would spend today for just one family like Papa:

1. A family living in one of the 162 regions of the state, all rural, immediately qualifies for lifetime welfare. Yearly cost, for Papa and his family, approximately $28,212.
2. Medicaid costs $194,242 (State Medicaid costs $11,426 per person this is just the state costs).
3. Food stamps (state pays ½ the cost of administering this federally funded program) family of 17 in a Rural II location is entitled to $4693 a month / $56,316 yr. (not a typo). Plus of course free meals for the kids if they are attending a local school.
4. Education costs for 16 children in a rural location are approximately $294,656 yr. (+ or -) and under state law, locations with more than 10 children would be entitled to a free state built, maintained and operated school, meaning the cost could be far higher.
5. PFD x 17 = $17,000 or more.
6. Various other state and federal programs, thousands more (hard to quantify).

Total cost for just this one family in today’s dollars… $590,426 (year), not including #6.

For comparison, this is nearly double the amount the State gives to Ketchikan each year for revenue sharing and is more than most Alaskan communities get in total State aid. This is just one family and this actually happened. This was the largest family I saw in my career, but I witnessed many large families come to the state every year.

Here are some numbers I received from the State of Alaska, legislative research services on March 17th, 2017, exactly as written:

“Excluding Medicaid, in fiscal year 2016, a total of 216,781 Alaskans received approximately $285 million from public assistance programs that provide cash or cash equivalency benefits to eligible recipients through the Alaska Department of Health and Social Services (DHSS)”.

• Medicaid: 176,118 recipients/mo.
  
• Food Stamps (SNAP) 85,353 recipients /mo.
• Adult public assistance, Senior Benefits, Alaska Temporary Assistance Program and General Relief assistance 39,310 recipients /mo.

What this means is that if everyone collecting Alaska Medicaid lived in the same location they would be Alaska’s 2nd largest city, and if everyone collecting monthly cash assistance (welfare) lived in the same location it would be Alaska’s 3rd largest city (FBKS 32,324 JUN 32,660).

I would welcome a debate with Rep. Ortiz on the sustainability of these numbers and the $2.5 billion dollar STATE budget that funds them (just talking state funds spent). At current projections social service spending will increase by billions more in the years to come.

During Rep. Ortiz’s first election and reelection, I didn’t say a negative word about the man. I hoped, like many others that he would truly be independent. I worked with his office to obtain the welfare information (at great difficulty, the state doesn’t advertise this) and in conversations with him implored him to pursue welfare reform. A good starting point for welfare reform could be as simple as treating all Alaskans the same and reverting to the federal 5-year lifetime limit for welfare. I can tell you that I never saw a single case in my career where a person on welfare for more than five years suddenly became a productive member of society. I can tell you however; the longer a person is on welfare the greater likelihood of criminal behavior and other social problems.

I also expressed my concern for the need to impose a State “unincorporated area service tax” so that areas of the state currently getting everything for free could help contribute to our massive deficit. Rep. Ortiz asked me my thoughts on the how high that tax should be and I suggested a good starting point would be the average combined taxes (sales/property) a household in an incorporated area pays in one month… approximately $250. I further suggested that the taxes could be assessed to every PFD given to a citizen in an unincorporated area… just $250 per year. This would mean that a family of four in a current tax free area would pay $1,000 a year; approximately 1/6th the average tax liability of a family of four in an urban area. Additionally, that this tax of $250 be indexed to state spending, meaning that if state taxes were raised by “x” percent in the urban areas the unincorporated area service tax would increase by a like amount. Finally, that this tax would be eliminated if/when the area incorporated as a borough. This would eliminate the need for an income tax and would prevent the need to hire an additional 60-120 new state employees to administer it.

To date Rep. Ortiz has done nothing to address welfare reform or to assure any real measure of parity between Ketchikan and the more than ½ of Alaskan communities that pay no property taxes and have their services provided for free. In truth he increased the budget deficit this year and INCREASED spending in these tax free areas by voting to increase the Gov’s budget by $17 million for REAA (regional educational attendance area).

So here is why you should care if you live in Ketchikan…

Our State budget deficit is currently about 3 billion dollars. If there were a million Alaskans, and every one gave $3000 that would equal $3 billion. This is just the deficit… not total state spending.

Problem is there are only about 736,732 Alaskans, so each would need to give $4072 to equal $3 billion.

There are two PFD restructure bills being considered, one in the Senate and one in the House. Those bills would provide for a reduced dividend and use a percentage of PFD earnings to close the deficit. Here are the basic differences:

• Senate PFD bill SB26 (Gov. Walkers bill) caps dividends at $1000 for three years, after which they will increase as the fund grows. This bill comes with a spending cap adjusted for inflation and has a slightly higher draw from PFD earnings.
• House PFD bill HB115 (Rep. Ortiz supports) caps dividends at $1150. The cost to increase the dividend by $150 over the Senate version costs $98 million. To pay for that cost and generate additional revenue, the bill also imposes an income tax of 15% of federal tax liability and a 10% capital gains tax. This bill imposes a $25 household yearly fee (only one charge per family) for the estimated 47-55% of Alaskans who do not earn enough to pay federal taxes and would not pay any state income taxes.

I realize we all hate the idea of the PFD being touched, but if you work for a living the Senate bill is much better for a number of reasons. First, expert testimony was that SB26 is better for the PFD because of the spending cap which allows the fund will grow at a faster rate.

The next reason the Senate bill is preferred is because it does not tax income. The moment an income tax is passed, the PFD becomes another welfare program. At some point, Alaskans who work and make a livable wage will never see their PFD again. HB115 comes with a provision to allow working Alaskans to request that the state retain their PFD and use it to apply to their income taxes, which we all know will only go up in the future. This makes our welfare problem worse. People who don’t work will continue to get all services for free, get a PFD check, while Alaskans who work will never see another PFD check again, and most will get an income tax bill on top. HB115 is a tax grab and will grow government, here’s why:

Republicans in the house minority presented an amendment to HB115 that would have reduced the draw on the PFD if/when oil prices increased. When this was debated, one of Rep. Ortiz’s fellow house members indicated that if state revenue increased and returned to what it was, he wanted the extra money to increase social program spending. Rep. Ortiz agreed and voted against a spending cap and against reducing the PFD draw when oil prices increase (ask him about amendment #13).
Both bills still leave a 1-1.8 billion dollar deficit depending upon who you listen to. The Senate plan to address this remaining deficit is a series of cuts phased in over the next three years. The House is not saying how they intend to address the remaining deficit, however if they refuse to cut and refuse to ask anything of the tax free areas, then the only place left to gain additional revenue is the municipalities like Ketchikan.

Next problem, as of Jan/2017, Alaska has only 337,300 people employed, and a significant percentage of that number are considered marginally employed (low wage jobs, part time or people working more than one job). If 300,000 Alaskans make a living wage that allows them to live in Alaska without government assistance, they would each need to give $3333 extra (on top of PFD/income taxes) to close the remaining deficit. This of course assumes that spending does not increase and so far this session Rep. Ortiz’s and his caucus have added $127 million in new spending. Yes, I realize he is claiming all kinds of cuts… sorry, but simply not accurate. Read the following article to learn how they are playing the numbers game and then re-read Rep. Ortiz’s first letter with particular attention to how he uses the FY15 comparison. http://juneauempire.com/opinion/2017-01-27/rep-reinbold-simple-truth-state-budget

Slice the numbers anyway you want, but there is no way the public can afford thousands in new taxes per citizen, especially when you consider that children, the old, those incarcerated and the very poor are essentially untaxable. We must reduce spending and all areas of the State must contribute. The truth is that we have a massive problem that is getting worse when legislators like Rep. Ortiz oppose virtually every cut and actually INCREASE the budget. We are in deficit and every dollar in added spending is a dollar that must eventually be paid with new taxes.

This is about much more than a PFD draw and an income tax. I expect a PFD restructure bill to pass this session and be signed into law. If the budget is cut at all, it will only be because the Senate forces the House Majority to reduce spending. The remaining deficit and new spending will hit Ketchikan and the other urban areas over the next few years resulting in massive local tax increases. Unless something is changed the urban/rural divide will get worse, with one ½ of Alaska paying increasing amounts for their services and paying increasing taxes to cover the services of the other half.

We must have social spending reform and some measure of tax parity or this state will get too expensive for many citizens, likely resulting in Alaska becoming the poorest state in the nation. Please ask Rep. Ortiz to support welfare reform and reduce the state budget to a sustainable level.

Rodney Dial
Ketchikan, Alaska

Received March 21, 2017 - Published March 22, 2017

About: The opinions expressed in this letter are my personal comments and I am not speaking on behalf of the Ketchikan Borough Assembly of which I am a member.

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