Irresponsible 21-19 House vote boosts PFD with no plan to finance services
The 21-19 state House vote Monday to boost the Permanent Fund Dividend to $2,700 is an irresponsible amendment, as it does not include a viable plan to both send larger checks to Alaskans and finance state and local government services.
This grandstanding move is not sustainable. It is an election ploy, pure and simple, from politicians with conflicting goals about Alaska's future. Give the people what they want. More money!
The plan may look good to those who don't know anything, but it's an invitation to spend billions more in state savings with no discipline and no controls. This is the surest way to wipe out the Permanent Fund.
If this $2,700 dividend clears the Legislature, which I doubt, the governor should veto it to $1,000. The toughest and most sensible move Gov. Bill Walker has made during his term was to cut the dividend, while seeking a fiscal plan with some taxes.
This move by the House comes from the "Everything will be fine until the money runs out" political party, the strongest of Alaska's parties.
Most of the 21 are smart enough to know that the state can't afford to do this without taking actions that will be unpopular. They are ducking the hard part of the job, choosing to hand out money, which is the easy part.
The 10 members of the Democratic majority and the 11 Republicans are betting that this decision will put them in good shape for the coming election. I hope they are wrong.
The 19 members of the House who voted against this, both Democrats and Republicans, deserve credit for taking a responsible stand. They are the ones who should get credit for leadership.
The divided coalition that supports $2,700 consists of people who have opposing points of view on state finances and conflicting goals. That is the clearest sign that this is not sound.
The 10 members of the Democratic majority backing the unsustainable PFD hope to force the Legislature to raise taxes. That means raising oil taxes and starting an income tax or a state sales tax. I think the state should do both. But until those difficult steps are taken, the Legislature has no business claiming we can afford a $2,700 dividend.
The 11 Republicans backing the unsustainable dividend believe that setting a $2,700 dividend will force the state to cut services. They see themselves as never voting for taxes. They also see themselves as never having to vote to cut education by hundreds of millions or taking other drastic measures.
The Democratic majority is in chaos over this grandstanding ploy, aided by the Republican minority.
A dividend of close to $1,000 is responsible, but it has to be accompanied by new taxes to create a fiscal plan with any chance of preserving the Permanent Fund. For a dividend of $2,700, we would need higher taxes and reduced services.