Tuesday, March 1, 2016

House Finance Testimony 3-1-2016



To:
Alaska State Legislature,
House of Representatives Finance Committee



Good Afternoon Folks…

I want to start my Thanking you all for your public service and for volunteering to do represent the people of Alaska.  As part of that service, the legislature must remain vigilant in protecting Our resources.  Those resources include more than carbon fuels and fish, but also We The People of Alaska and Our Resources.  Since before Statehood “Alaskans” have always had a Spirit of Freedom and Family Values.  This is even written into the State Constitution. 


““the pursuit of happiness” for We The People is not defined as having to pay Taxes that reduce “the enjoyments of the rewards of their own industry” so that Our government continues to grow.”


The growth of government spending on itself has to be decreased… taxes upon the private sector are quite frankly un-constitutional and will harm the private sector.  Costs across Alaska are generally higher than the lower 48 and especially so in rural areas.  Some rural municipalities already have sales and property taxes that can add-up pretty quickly on higher priced consumer goods and services.  The State of Alaska has to look into departmental restructuring and simplifying government roles to adhere to the State Constitution and declining revenues.  Implementing more and more taxes is not the answer to reaching sustainability, if even for a stop-gap band-aid quick-fix to Alaska’s fiscal woes. 


Let’s look at where We stand right now…

Working through the HFIN first Committee Substitute. At first glance it appears to come in within the $4.5 B target spending level the HFIN Co-Chairs previously have identified ... except it doesn't. Let’s look at these 3 things…

First, while funding for the University appears to be cut by another $25 million, that in fact is offset by a $25 million draw from Power Cost Equalization in order to keep actual spending at the same level proposed by the HFIN Subcomm.

Second, while the contribution made to PERS/TRS appears to be cut, that in fact is offset by a $76.7 million draw from the Alaska Higher Education Investment Fund (scholarships) to keep actual spending near the same level proposed by the Governor (and recommended by the state's actuaries).

Third, the budget includes a $145 million generalized credit resulting from a reversal (draw) from a previous fund capitalization (what I have been told is the Public Education Fund).

Such credits previously have been considered below the line adjustments, not spending "cuts."

Shifting money and directing revenue from one area to another isn’t the same as cutting the spending. Please see the chart below.



Once again, Thanks for Your service and God Speed in figuring this mess out!

Sincerely,

Jon Corbett


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