Alaska's fiscal situation offers no easy choices

During the recent legislative session, the difficulty in reaching an agreement on the budget among Gov. Bill Walker, the House and Senate majority caucuses, and the House minority caucus triggered some armchair critics to decry what they saw is a lack of leadership.

 

However, an event that took place during my tenure as Gov. Jay Hammond’s top aide gives me a slightly different perspective on the issue of “leadership.”

Clem Tillion, a senator who hailed from Halibut Cove, was serving as Senate President at the time this leadership issue arose. Clem had a particularly rambunctious and strong-willed group of senators to keep in line — and was often only marginally successful in those efforts.

At the mid-point of the 1980 session, a session that featured a host of major public policy issues that would shape Alaska’s future, Clem met Gov. Jay Hammond for a meeting that focused on Clem’s woes in dealing with his majority caucus and with members of the House’s leadership.

After Clem left Jay’s office, the governor strolled into my office and said: “Clem seems to be suffering from the pangs of leadership.”

Apparently Clem’s caucus was veering from the legislative pathway he wanted to follow and Clem was very unhappy because his caucus was pushing back on his leadership efforts.

Gov. Hammond — who had a great sense of humor — said he believed Clem’s problems didn’t relate to “leadership” as Clem was dealing with 20 “leaders” in the Senate and another 40 “leaders” in the House. So, the governor concluded, Clem’s problem with the Legislature wasn’t due to a lack of leadership — he had 60 leaders on the second floor of the Capitol.

Instead, Clem’s problem was that he lacked followers.

I believe as our elected officials move forward with efforts to shape a fiscal plan, this “leadership/followership” issue will raise its head. No administration or legislature in Alaska’s history has faced such a difficult challenge as that currently facing the Walker-Mallott Administration and the current House and Senate leadership.

I’ve followed the legislative process in Alaska for more than 40 years and believe our top elected officials will exhibit leadership and put workable solutions on the table to solve the budget deficit problem. The real question, I believe, is will Alaskans — who are independent-minded, somewhat suspicious of government at all levels and strong-willed — follow our leaders and support a fiscal plan, even if it means digging into their personal wallets?

One of the ideas that will certainly be on the table is resurrecting the personal income tax. One major problem with the income tax is that nationally only about 50 percent of U.S. citizens pay it. Therefore, an equity issue arises if that revenue enhancer is implemented, but one likely alternative — a flat tax on every Alaskan — probably won’t fly. Degree of difficulty: very high.

Capping the Permanent Fund dividend at $1,200 is another option, but that option may peel off a large group of potential “followers” as this year’s dividend is projected to be in the $2,200 range and remain there for the next several years. Do the math: An immediate hit of $1,000 to roughly 650,000 Alaskans who receive the dividend will be a very tough sell.

And the list goes on. No question, this is a daunting task facing Alaska’s leaders.

My hope is during the upcoming debate we Alaskans will be open to at least listening to the fiscal options that are up for debate as our leaders consider them. In addition I hope the debate will be elevated to the public policy issues linked to budget deficit, and not degenerate into attacking those public officials who have the courage to stand behind fiscal proposals that may be controversial but that need to be aired.

Finally, I hope that we find enough Alaskans who will be “followers” and who are willing to line up behind reasonable fiscal proposals for the betterment of this state.

• Jerry Reinwand was Gov. Jay Hammond’s chief of staff during Hammond’s second term. He has also served in the same position for then-Sen. Frank Murkowski in the senator’s Washington, D.C. office. He currently works as a lobbyist and lives in Juneau.

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