A couple of days ago the Anchorage Daily News ran a letter to the editor with the title "Tax cuts are hurting education." The writer began the letter with "Unless repealed, the tax breaks given to Big Oil by our governor and Legislature will create further direct hits to Alaska education." Senator French, campaigning for Governor, subsequently tweeted the article with the comment "Oil Giveaway will lead to further damaging cuts to AK education:."
The problem? "Tax cuts" aren't hurting education -- past and continued state overspending, the type that Senator French himself has voted for -- is.
How do I know that? Because the ISER report I referred to in yesterday's piece says the following about the fiscal trajectory the state is on, using revenue projections based on the continuation of ACES:
Right now, the state is on a path it can’t sustain. Growing spending and falling revenues are creating a widening fiscal gap. In its 10-year fiscal plan, the state Office of Management and Budget (OMB) projects that spending the cash reserves might fill this gap until 2023, as the adjacent figure shows. But what happens after 2023?
Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.Doing the numbers substituting the revenue levels from SB 21 produces the same result.
It isn't the level of taxes that is causing the state harm, it is the level of spending that the state has -- and continues to -- engage in. State-funded indoor tennis courts in Anchorage, state-funded paving of private parking lots, building a new sports arena at UAA entirely with state funds, rather than requiring that a significant portion be paid for by donors as occurs in every other state, new football fields at a number of Anchorage high schools, when Anchorage Football Stadium exists for just that purpose -- those and countless other state-funded activities are the problem. Which tax structure the state uses to raise revenue is, at best, a second order problem.
Yet, the biased reporting in the Alaska Dispatch and others leads the ADN letter writer and vast numbers of other Alaska citizens to focus on tax structure as the problem, missing the point.
The Alaska public should be concerned about reduced funding. They should really be concerned about the level of reduced funding the state is headed for in the next (now just seven short years away) and following decades. If they were there is a good chance they would do something about it, by demanding of their leaders to address the subject.
But they aren't, because the Dispatch and other news outlets in the state are allowing those leaders -- including Senator French -- to escape consequences for their actions, by instead focusing attention on a less consequential subject.
The ADN letter writer should have begun her letter "Unless repealed, gross overspending by our governor and Legislature will create further direct hits to Alaska education." The reason she didn't is because the Dispatch and others are failing in their mission to inform their readers of the true problems facing the state. As a result, the state continues down the road it is on, which inevitably will lead to the "fiscal crisis" and "economic crisis" forecast in the ISER report.
That is the consequence of biased reporting. The state's citizens are missing the most important economic issue facing the state today.
To paraphrase the letter's author, "unless reversed" I will remember who caused it as we start to hit the wall later this decade. By then others will realize it as well. The consequences won't be pretty.