Thursday, July 27, 2017

Today's vote will demonstrate whether Alaska legislators believe in the rule of law

Sometime today the Alaska legislature will vote on the FY 2018 capital budget.  The vote will demonstrate whether legislators believe in the rule of law.  The rule of law is sometimes spoken of this way:
"The rule of law is the legal principle that law should govern a nation, as opposed to being governed by decisions of individual government officials. ... Rule of law implies that every citizen is subject to the law, including lawmakers themselves. In this sense, it stands in contrast to an autocracy, dictatorship, or oligarchy where the rulers are held above the law."
There will be two tests in today's vote about whether legislators believe in the rule of law.  One relates to AS 43, the portion of the Alaska Statutes relating to revenue; the second relates to AS 37, the portion of Alaska Statutes relating to public finance.

The test under AS 43 involves cashable oil tax credits.  AS 43.55.028 provides the manner in which funds are deposited in the "oil and gas tax credit fund," from which cashable oil tax credits are paid.  AS 43.55.028(b) provides that the amount deposited annually shall include "the percentage provided under (c) of this section of all revenue from taxes levied by AS 43.55.011 that is not required to be deposited in the constitutional budget reserve fund established in art. IX, sec. 17(a), Constitution of the State of Alaska."

Earlier this year the Administration estimated that the amount required to be deposited this year under that provision is $77 million.  https://goo.gl/G4rVSA at 6. The legislature included $57 million in the FY 2018 Operating Budget. https://goo.gl/pvKS1Y  The question for today will be whether the legislature appropriates the additional $20 million necessary to fully fund the statutory requirements of AS 43.55.028.

The test under AS 37 involves the PFD.  AS 37.13.145(b) provides that "[a]t the end of each fiscal year, the corporation shall transfer from the earnings reserve account to the dividend fund established under AS 43.23.045, 50 percent of the income available for distribution under AS 37.13.140."  Other statutes provide the manner in which that amount shall be paid out as the PFD.

The Permanent Fund Corporation currently estimates the amount required to be transferred under that provision during FY 2018 is $1.54 billion. https://goo.gl/Qjbyps  The legislature included $760 million in the FY 2018 Operating Budget. https://goo.gl/bpLvQi  The question for today will be whether the legislature appropriates the additional $780 million necessary to fully fund the statutory requirements of AS 37.13.145(b).

There is nothing that distinguishes the two statutes (or others, such as the K-12 BSA funding mechanism) from the other.  Each provides clear rules regarding the use of state funds enacted by past legislatures, signed by past Governors and included in Alaska statutes. Each creates programs on which various sectors of the Alaska economy have come to rely.  Each creates economic benefits important to the overall Alaska economy.
 
Each establishes a rule of law.

We will find out today which Alaska legislators believe in following the rule of law -- and which believe they are above it and are entitled to pick and choose which they apply.  And if they do, we also will find out which parts of the Alaska economy -- and Alaska families -- they favor over others.