When the Alaska Legislature convenes for the 2020 session it is going to begin on a bad note. Gov. Dunleavy has unveiled a ridiculous budget that neither the House or Senate majorities are going to pass. His desire to spend down the state’s main savings account to pay for a $3,000 dividend is bad fiscal policy that should not be taken seriously. By doing what he has, Gov. Dunleavy has made it clear that he will not back down on the unrealistic promises he made when he was on the campaign trail. This is tragic because it means he learned nothing from the events of the 2019 session and it also shows that he does not wish to come to the table and compromise with legislative leadership.
What that means is Senate President Cathy Giessel and House Speaker Bryce Edgmon are going to have to be the leaders of the hour to help get the state through the present fiscal crisis. Part of getting the state through the fiscal crisis is going to be getting new revenue on the table so that the legislature has another tool in the box to solving the fiscal crisis. First and foremost, the finance committees of both bodies need to look at implementation of a 3% sales tax that would be seasonal in nature and would capture revenue from tourists visiting our state. The second thing the finance committees need to do is look at oil taxes again and make changes to the tax regime so that the state is getting more revenue from the legacy fields.
If both of those things happen then there will be billions of dollars that will flow into the state treasury and it will help with closing the fiscal gap. It would also help in terms of relieving some of the pain from the budget reductions that have been going on and allow for a capital budget of some significance to pass the legislature. These revenue options are most likely going to happen as there is a strong desire within the Capitol to address the fact that revenue options are not being utilized as part of a long-term fiscal plan. The leadership of the House and Senate Finance Committees have most likely got legislation under draft to address these issues and will be pushing to get them through the legislature. The big question is whether or not the governor will sign them into law or veto them if they land on his desk?
If the governor vetoes any revenue bills then he will have indicated to the leadership of both chambers that he is not going to develop a working relationship to deal with the budget crisis. One other factor in all this is whether the governor’s allies in the legislature are going to come to the table on developing new revenue streams for the state or will they resist? If the House Minority caucus comes to the table to negotiate that would show that House Minority Leader Pruitt wants to repair the relationship with Speaker Edgmon that was burned this session.
On the Senate side, if the governor’s allies within the Senate Majority stop attacking their leadership team and start working with them on revenue options it could help mend the broken relationship that has developed. But either way it is clear that revenue options have to be on the table for the 2020 session and the House and Senate leadership need to move to get bills to the floor to address the fiscal gap. If they are successful they can address a major challenge facing Alaska’s future and they will go down in history texts along with other great men and women of Alaska history.