Home Forums Hunting & Shooting Alaska Richest state to ever go broke

The Alaska Permanent Fund is about to make history again.

The international investment market is strong, the Fund’s portfolio is robust. On Monday, barring a weekend catastrophe, Alaska’s piggy bank will very likely top $60 billion.

For perspective, Bill Gates’ net worth is about $89 billion. We Alaskans have about 67 percent of the Gates fortune. We’ve never been richer.

Or broker, according to Gov. Bill Walker and the Democrats, who want to implement a tax up to $700 million on residents.

The Permanent Fund is making nearly 9 percent gains this year. Not bad for a little sovereign wealth fund that started with merely $734,000 in 1977.

The Earnings Reserve Account portion of the Permanent Fund is now about $11.7 billion. That’s the money that can be used to pay for state government. In addition to that fund, the government has nearly $5 billion in the Constitutional Budget Reserve, the CBR, as legislative types know it.

There are a few other accounts around state government, but those are the big chunks. Together, the State has well over $65 billion in its piggy bank, and $16 billion of it is more or less available for appropriation.

And yet, the Democrats in control of the House won’t pass a budget unless they get an income tax that would take $700 million from Alaskan families. HB 115 is their vehicle, which was designed by Governor Bill Walker’s Department of Revenue.

In his latest compromise package, the governor asked the Senate to accept a “head tax” (aka still an income tax) that would bring in $100 million.

But with the House Democrats quickly rejecting his proposed compromise, the governor is likely to ratchet up his request for taxes to something closer to what the Democrats want.

Over in the Senate, controlled by Republicans, lawmakers say no tax is needed. All that’s needed are some modest cuts and a restructuring of the Permanent Fund, per Senate Bill 26, which is the governor’s bill.

The House agrees in principle with the framework of SB26, but are holding it hostage in order to force through their taxes. The upshot is that pink slips have gone out to state workers in advance of a government shutdown on July 2.

[Read: Walker’s plan: Camel’s nose under the tent tax]

Stay tuned for Monday, when the Senate should hear back from the governor with his responses to a list of questions asked by Senate leadership that pertain to the compromise Gov. Walker is trying to reach.

Very likely, some of those answers will be unpalatable because they will involve even higher taxes than his first compromise offer of $100 million.

Senate leadership sent a letter to Gov. Walker last week asking for answers for why the governor:

Offers no spending cuts, but actually agrees to the Democrats’ $200 million increase in state spending.
Cuts down his tax request, while providing no documentation to the public as to why he needed $700 million two months ago, but only $100 million now.
Accepts a shortfall of $300 million that could be paid for with savings, even though just weeks ago he said he would not accept anything but a fully funded plan.
Shrinks the Permanent Fund dividend.
Accepts the Senate’s version of SB 26, a restructuring of the Permanent Fund.
Establishes a compromise on oil taxes, but only if he gets his “head tax” and only so long as there are no cuts to the budget.
Insiders at the Capitol say it is no secret that the governor’s head tax is a gateway tax, to get something on the books, and come back later for more. His team has told several people in the Capitol this week that the tax is just to get the infrastructure in place

Senate Majority Leader Peter Micciche, a Republican from Soldotna, says the struggle is over the philosophies about the role of government. Democrats see government as the economy and have little concern for the private sector, he said.

“This Permanent Fund milestone proves the percent-of-market-value numbers in our SB 26 model is conservative, and doesn’t even reflect the gains made by the fund this year,” he said.

Sen. Mike Dunleavy of Mat-Su, has been an opponent of an income tax. He’s a Republican who no longer aligns with the Senate Republican majority because of his budget hawk approach that is stridently anti-tax.

“This has nothing to do with the budget. They don’t need a tax. They want a tax,” Dunleavy said.

“This is like begging your relatives for money and telling them you’re broke when everyone knows you aren’t broke. The public isn’t buying it. They know you can live on your savings for at least 13 years. Meanwhile, you get your other investments going, like Armstrong and Caelus (and other oil companies) and you put more oil in the pipeline.”


http://mustreadalaska.com/alaska-richest-state-broke/

Gov Walker is a douche! Sean Parnell isn't looking so bad now..

Can Walker be recalled? If he can, it sounds like it's about time.

There was a recall petition floating around but have heard no more of it.

I hope Dunleavy runs!

The AK Senate plan will continue gobble up the CBR at almost a billion a year. (at that rate the CBR is gone in 4-5 years) Even with the POMV draw and dividend reduction, the Senate plan could kill the dividend program. Other than the corpus of the fund, the ERA, from which PFDs are paid, will be the only savings account the state has left after the CBR is gone. Thus, the "pass SB 26 alone plan" will put a great deal of pressure on the corpus of the permanent fund as well. I'm concerned that under the Sen. Maj. plan the PFD will end and conservatives will be hung with the blame. The blame for the dividend's death combined with the in-migration of a lot of lefties recently could result in a sizable shift to the left in our state's politics...

The state has lost 80% of revenue, cut 44% from its budget and burned through $10B in savings already in the last 3 years. If that's my business or household, I would be rather concerned.

To act like there's no real problem and kick the can down the road is a dangerous game who's end could result in power shifting to Democrats who are more that happy to give handouts to those feeling so entitled. The entitlement ideology doesn't care really about political philosophy or personal responsibility. I fear that those who believe that they are entitled simply by their mere existence will find new patrons who do not share our cultural values.

Is walker a democrat for hillary.

The senate doesn't want to gobble up the CBR. They don't want a state tax either. But since Walker refuses to make cuts, his democrats can pay for it along with the rest of us, rather than just the working class.

I'm happy to see Walker voters getting this broke off in their ass.



http://davideastman.org/articles/2017/6/9/house-goes-off-the-rails-in-morning-floor-session

Going broke and what do the democrats in the house want?

Well, beside keeping their private chef on the payroll?

A penny-per-barrel tax for a climate change commission.

It's as if they are unaware or unconcerned that after nearly 100 days into a 90 day session, there still is no budget nor fiscal plan - beyond more taxes.

The state has cut 44% from the budget, which budget?

If the state could stop threatening to raise oil taxes, and work with the oil industry to come up with some reasonable incentives to bring recent finds into production, we can be back to 1million bbl/day and state revenue will be back where it needs to be.

A radio talk show host put it most succinctly, the state needs to stop subsidizing people to live in places they can't afford to live.

Cutting proposed budget increases is not a budget cut!

Parnell was there when the problem really started and shares much blame. Look at the progression of the budget under his watch.

Don't forget the lovely sister Sarah in regards to being at the helm of massive government growth.

Agreed, but Captain Zero put the ship in overdrive...

Talk about the proverbial slippery slope. Fight as hard as you can to keep those out. I can't seem to figure out their problem with cutting the budget. That's what everyone else has to do when their income goes down.

I love to cringe when I listen to some of the radio talk show hosts and their 'snapshot' views of their world. One could carry such comments forward and ask, "Can Anchorage afford to sustain a population of 400-500,000 people?" or perhaps a 'commentator from a more remote part of the state might say, "If these developers and regulators would leave us alone, we would still be alright where we are." Of course, no bell can be unrung, so we need to figure out how to live with the sounds we have created with adding to it by ringing more.

That is what Walker claims. He's delusional.

If you Google on "state spending per capita"......you'll get an eye opener.

I expect it to be higher but $18K+ is a about three times other states.

The thing with that per capita spending is that the majority of it goes to less than 10% of the states population. I have no doubt that there are individuals that between handouts, law enforcement, courts, social workers, child protective services, medical, etc, etc, etc cost the state $100k a head.

I'm sure you are correct.

And while I am supportive of lending a helping hand when people need it, assistance is not subsistence. To that point, I wish the State would administer the SNAP program similar to WIC. Give people vouchers for specific items: 10 pounds of milled, unprocessed, white rice; 5 pounds dry beans, unprocessed; 2 pounds natural colby or cheddar cheese, 2 dozen eggs...etc. I know some people use their 'assistance' well, but I have seen so many grocery carts full of soda pop, Doritos, candy, Minute Rice, Sirloin, Banquet
chicken, Breyer's ice cream etc, while we get by on store brands of cereal, vegetables, on-sale meats sometimes, near-expiration milk and breads, etc. It ain't rocket science, but it's amazing how well some dignity can motivate a person, while stealing that dignity robs all of us of a whole lot more. I realize that businesses would lobby against the easy money to be made in the higher dollar stuff, but they can work a bit harder too.

but wait a minute, Bill Walker sez we're down to getting rid of road maintenance and teachers? If they've cut 44% (there's lies and damn statistics) then they should have cut about 80% (roll eyes here)

god no wonder folks hate politicians.

Fully understand the budgets were out of control under him but I still take him over walker anyday

A big part of our problem now is that when things are flush, everyone gladly has their hand out, when we should all be somewhat more frugal even in good times. Need a new school? Great, let's get it build, but let's plan it in such a way that we won't go broke with upkeep and maintenance over the long haul. And there are plenty of ways to cut a few corners without giving up every pleasing aspect of the design too.

We're now stuck with fixed costs on a number of investments around the state which could have been better planned for - and it was quite obvious when it was happening. Nobody should be directly involved in planning these things (capital projects) if they haven't lived to see the ebb and flow of state revenue.

Soon enough Alaska will tax people out of the state and Alaska will be changrala like it was in the 60's..

While the media barely brushed on the subject. Parnell proved himself to be a bold faced liar, when he appointed a cocaine/evidence stealing judge Pozonsky(from PA) to head the Workmans Comp division. Then, when it was made public, immediately fired him, and claimed no knowledge, and that the crooked judge was appointed by staffers. Trouble is, Pozonsky's wife, and Parnell, and Sen Fred Dysons family members were in cahoots in a church group of some sort in Kenai. Wouldn't trust Parnell(or any politician) as far as I could throw them. Even sadder, Alaska doesn't have a journalist with an investigative bone in their body. Makes life easy for our crooked legislators.

Jeff

Its all just theater , soon they (all of them) will swoop in with "solutions" to problems that they created. This is like you bringing your car to a mechanic who drains your oil out on the lift, then runs the motor until it blows up then charges you a ridiculous amount to fix it.It has become cultural , and that's a hard thing to change.

Problem is you could probably toss them quite far...

The real question is who is going to come after Walker. He's done. Parnell, we had to get rid of him. Lets get somebody good in there.

Okay, whom would you choose?

First hats tossed:

http://mustreadalaska.com/race-governor-starts-living-room/

The House Democrat-led majority tonight passed an one of the largest budgets in Alaska history — and one that would shut down government for at least 70 days starting July 1.

The only thing standing between Alaskans and a government shutdown is the Senate, which stands in adjournment until 11 am on Friday. If the Senate agrees with the House, government will shut down July 1.

There are two reasons the House’s $12.1 billion budget requires a shutdown:

1. The House Democrat-led majority failed to pass an effective date clause, which means the budget cannot go into effect until 90 days after the governor signs it.

2. The Democrat majority adjourned “sine die,” which means the House Democrats are heading for the airport, while House Republicans remained stunned at what just happened.

Republicans were dismayed at recklessness of the move. Observers in the Capitol said the process was unheard of, and was also disrespectful to the institution.

Members in the Republican minority were only allowed to speak for two minutes apiece about the hastily put together dual budget, with Speaker Bryce Edgmon abruptly shutting them off and rushing to the vote.

By 9:10 pm Thursday it was all over.

LAST SUPPER

The evening started with a surprise floor session, which was hastily called while the minority was having supper.

After days of cancelled sessions and conference committees, and with just 15 minutes notice, Speaker Edgmon called an evening floor session, and when Republicans arrived, House Majority Leader Chris Tuck quickly moved to rescind the capital budget, SB 23. The majority Democrats agreed and the capital budget was rescinded.

Then papers were quickly passed out to members, and it became apparent that the amendment that was about to be made would stuff the entire operating budget into the capital budget and the majority would pass the two budgets as one.

No one in the House minority had ever read it this new version of the operating budget.

The Democrats’ plan worked to get out of town, and the votes went quickly 22-18, with Democrats and their Muskox Republicans voting for the shutdown.

BUDGET TAKES NEARLY HALF OF EARNINGS RESERVE ACCOUNT

The Republican minority objected repeatedly to being ambushed with an 89-page bill they had not read. But it was to no avail. But here are the large pieces: The House Democrats’ budget is one of the largest in Alaska history at over $12 billion, and removes $5.2 billion from the Earnings Reserve Account — the account from which the Permanent Fund dividend is paid. It would leave just $6.5 billion in the ERA.

It seemed like a surprise move, but it had been in the works, at least for 24 hours. While today Speaker Edgmon was negotiating in what seemed to be good faith with Sen. Lyman Hoffman, the senator from his own district and from his own party, all the while, the representative from Dillingham knew he had a 89-page bombshell amendment in his back pocket. That amendment was dated Wednesday.

Rep. Mike Chenault, R-Kenai, shook his head. “I’ve been here 17 years and this is the worst I’ve seen. I’ve never seen a process that was this disrespectful to the institution and to the decorum of the body,” he said.

Rep. Lance Pruitt, R-Anchorage, said that thumbing through the amendment, it was impossible to tell what was in it, as the budget is a highly technical document. He compared the process to tyranny.

But Rep. Chris Birch, R-Anchorage said it just reminded him of Nancy Pelosi standing with Barack Obama as he signed the Affordable Care Act into law. Pelosi said, Birch reminded the members, “We have to pass the bill so that you can find out what is in it.” That was what happened tonight, he said.

None of the Democrats spoke during the floor session, except Rep. Paul Seaton and Rep. Neal Foster, who were introducing the amendment that would result in a shutdown.

The Senate is left with few choices. It can disallow the bill to be read across, or it can accept in and debate it. But without an effective date clause, the Senate is unlikely to sign on.

What’s left is the governor having to call the entire Legislature back into a second special session.

Gov. Bill Walker expressed disappointment with the House. “They did not get the job done for Alaska. A compromise is required to protect Alaskans and put the state on a stable fiscal path,” he said on Twitter.

http://mustreadalaska.com/house-democrats-pass-bill-shut-government/

What a mess...

Art,

You better run for office!

Okay, I'll run from office!

Ohhhh.... guess I misread that!

Drain Juneau!

Make Alaska Great Again!

When Rep. Gabrielle LeDoux said, “If the Senate thinks we are going to get out of here with just the POMV (Permanent Fund restructuring) they have another think coming,” no one in the press conference thought she meant passing the second largest budget in Alaska history.

Or making the largest draw ever on the Permanent Fund Earnings Reserve Account, cutting it nearly in half.

Or passing a budget that actually shuts government down for between 70 and 90 days starting July 1.

Or passing a budget that wasn’t even fully funded.

That’s what happened last night in the Alaska House. The Permanent Fund wasn’t restructured, but the reserve account was raided to pay Alaskans a $2,000 dividend, and to put money into an “education savings account” that earns 2 percent.

Led by hard-line leftists, the House passed a budget that will, if left unchecked by the Senate today, lead to a government shutdown on July 1. That’s because the body did not pass an “effective date clause,” so the budget can’t take effect until 90 days after being signed by the governor, and that’s assuming he would even sign it. The fiscal year starts July 1.

The Alaska Senate this morning will likely gavel out “sine die.” That will allow the governor to call another special session in a last-ditch attempt to head off a shutdown. Neither the Senate nor the governor indicated that the budget bill passed by the House was anything but a recipe for chaos.

Rep. Tammie Wilson, a Republican from North Pole, was poring over the budget this morning that she and the conservative caucus had not been allowed to review before voting on it last night, when House Democrats, in a surprise move, crammed the operating budget into the capital budget, dropped it on the desks of Republicans, passed it without debate, and adjourned sine die, which means there is no ability to return this session to reconsider.

This morning, Wilson said she has already discovered numerous changes to the operating budget from previous versions that legislators had seen, including increased funding to village public safety officers but a $4 million cut to Alaska State Troopers. The state can’t even fill the village public safety officer positions it has, but another $190,000 has been added to the program.

“This budget isn’t even fully funded,” Wilson said. “It took into account some kind of income tax, but no income tax passed, so the governor would have to make cuts just to get it to balance.”

Wilson found other significant changes and increases from previous draft budgets, and she is working on a complete analysis this morning.

EARNINGS RESERVE RAID

The House budget removes more than $5 billion from the Permanent Fund Earning Reserve Account. Some $1.7 billion of that will go from the high-earning Permanent Fund into the low-earning Education Fund, where it would sit earning about 2% interest.

Between fiscal years 2014 and 2015, state government spending in Alaska increased by $2.4 billion — from $11.4 billion in fiscal year 2014 to an estimated $13.8 billion in 2015, a 17.22-percent jump. This year’s budget passed by the House last night, is at least $12.1 billion, although legislators are still trying to understand all the changes.

With the Earnings Reserve Account depleted by House Democrats, a market correction could have a chilling effect on the ability of the fund to pay Permanent Fund Dividends next year or the following years.

Finally, by aggressively depleting state reserve accounts, the House’s reckless budget puts Alaska at grave risk of a financial crisis that, among other things, would require massive cuts in state spending.


http://mustreadalaska.com/comes-special-session-2-0/

Meh.......I like Dunleavy and Leman has a little previous cred, but none stand out.

Dunleavy has some appeal for me but I haven't heard enough about some of the others.

I was stationed in Alaska 4 separate times. The longest time between hitches there was 11 year (86 to 97). It was amazing to see how much had changed in those 11 years.

It was almost as impressive the following 10 years. It went from nothing but outdoor people doing outdoor work/play to the biggest group of liberals I've ever been around in my lifetime.

Sad

In the last 5 years there has been a huge international influx of gimme dats inundating the state. I wouldn't be the least bit surprised to see the states voting record to swing blue in the next 10 years.

That's why the house is trying so hard to keep the gravy train running.

Yep this ain't your dads Alaska

More and more liberal voters and politicians all the time

Love this place with all my heart and the type of men and women that opened it up.

Giant fing welfare state its become saddens me

When there are more coffee shops/stands than bars, there might be a problem.

I was amazed at how many liberals from Oregon/Washington were around. My dislike for the left coast comes honestly.

I remember back in the day the only thing a drunken heathen had to occasionally confront were a few of the pious town folk.

The pious folk are still around, along with folks that love blowing wolves, hairy Bellingham women, and f*cking kayak'ers. All sipping $8 a cup coffee,, wearing REI sheit and discussing how bad corporate America is.

It truly is an amazing transformation going on there. I f*cking hated town at the end.

Not to mention inbred reality TV stars.

All a result of the State have so much money at at once, the legislature got real creative on how to spend it fast enough.

If the State were a pro athlete, it would have been Johnny Football. (in terms of self-destructive behaviors)