Argument Proved: State Spending IncreasingBy Rodney Dial
July 11, 2019
The rest is semantics, minimization and a difference of opinion.
Per Rep. Ortiz’s response, the Capital budget has been cut from 2 billon to 100 million and Oil and tax credits owed are $740 million.
The difference between our statements is that I said “about 1 billion” in oil tax credits and Rep. Ortiz said it is closer to $740 million. In the end when they finally pay off this debt it will be close to 1 billion… wait and see, especially if they bond. Regardless, $1.9 billion annual capital reduction plus $740 million (at least) in oil tax credits is a significant amount of what they claim as cuts over the last few years. Since spending for both were just shifted to future years I don’t consider it a cut, however he does.
For the other areas we disagree on, Rep. Ortiz will concede that I have a “valid point” but will minimize by saying it is a “Tiny” percentage of “Total” Government spending. Total includes PFD spending, so yes, while it may be a tiny percentage, it is still a lot of money. Last fall the supplemental request (amount needed above what the legislature approved) was $178 million and exceeds $100 million per year.
Or when he says that the ½ of the land mass that receives services tax free is just a small percentage of the total population. What he fails to mention is that although this may be a small percentage of the population, they consume a vastly disproportional amount of state spending.
In Organized Boroughs like Ketchikan we are currently responsible for 100% of our school construction costs. In just one town of 374, the State recently allocated over $60 million on a school ($425,531 per student). That was not a typo.
Additionally, Rep. Ortiz and I have gone back and forth over the years about the State’s lifetime welfare program for many communities in the unorganized areas, the free services that the state provides and the millions more given to administer the free services.
We need to build schools… I understand that. My point has always been that the areas that can contribute need to. For every dollar they fail to contribute, the state must cut more and the taxes of the incorporated areas increase.
In Rep. Ortiz’s letter he said that this year’s budget, that was passed before the vetoes, was balanced and provides for a $950 dividend. I find this misleading as they did not resolve the Capital budget and that will be about $200 million. Without the Governors cuts, and unless they spend savings, the dividend will be less than 1/3rd what it should be.
This leads to the part of his response which confirmed what I have been saying for a long time. That when you take out the deferrals, the budget under funding, supplemental requests, etc… TOTAL state spending increased by over ½ billion last year. Rep. Ortiz stated that state spending increased by $200 million, plus $300 million in increased PFD spending. Think about it…
1. He admitted that state operating costs increased by $200 million.
If you add the two, it’s slightly over ½ billion… just like I said. However arguing that $300 million of last years increase was “the fault of” a larger PFDs ignores that PFDs were already halved by Governor Walker. In truth, what he calls a PFD increase, was simply a reduction, of the reduction imposed the prior year. And of course, the only reason they let you keep more of your dividend was because it was an election year.
Ultimately, it clearly proves that the budget is unsustainable, in that after already taking ½ of your PFD for three years, they are taking even more this year. What should be a $3000 dividend has now dropped from ½ to 1/3rd that amount just since last year.
Just like Rep. Ortiz admitted in his response, state spending is increasing. If state spending is increasing, and savings are depleted, the only way to maintain the size of government is to decrease the size of the dividend and/or increase taxes.
I stand by my assertion that state spending is unsustainable without cuts. PFD earnings and new taxes on less than 300k workers can never be raised high enough to maintain the current size of government; with ½ of the land mass contributing nothing and getting all basic services for free.
Time will tell.
My thoughts as a private citizen.
Received July 10, 2019 - Published July 11, 2019
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