By THAD POULSON
Sentinel Staff Writer
“In order for us to do our job we have to know what you folks are thinking,” Rep. Dan Ortiz said Sunday, addressing a gathering of some 200 Sitkans at Harrigan Centennial Hall.
And the audience obliged, with more than 60 speakers coming forward in the next two and a half hour to comment on the problems they could see from the major spending cuts in Gov. Mike Dunleavv’s budget and to give their ideas for fixing the state’s fiscal problems.
No one had a good word to say about Dunleavy’s plan to stop draws from the Permanent Fund earnings reserve or his campaign promise to increase payouts to the $3,000 statutory limit.
Speaker after speaker made impassioned and sometimes emotional appeals for the Legislature to overrule Dunleavy’s planned cuts to schools, the Sheldon Jackson Museum, the ferry system, medical assistance and the Pioneers Home, as well as his plan to stop sharing the million dollars a year in fish landing taxes with the city.
Ortiz, an independent from Ketchikan, is a member of the majority coalition in the House and chairman of the Finance Committee. Sitka’s Rep. Jonathan Kreiss-Tomkins, also a member of the House coalition, and Sen. Tom Begich, a leader of the Democratic minority in the Senate, sat at the table with Ortiz but did not take part in the proceedings.
Over the weekend individual members of the Finance Committee were holding town hall-type meetings across the state to gather opinions on the Dunleavy plan for balancing the state’s books.
Ortiz started the meeting by stating the House majority’s position that the budget could be flat funded at last year’s level without dipping into the state’s rapidly diminishing savings by reducing the PFD this year to $630 instead of the $1,600 last year. On the other hand, the governor’s plan is to make the PFD $3,000, and cover the resulting $1.5 billion budget deficit by cutting services and shifting costs to local governments.
The view expressed almost without exception by speakers at Sunday’s event was that the PFD should be reduced as much as needed to prevent the Dunleavy cuts from going into effect.
As for making up the loss from low oil prices, and the reduction of oil flow through the pipeline from the 1990s high of 2 million barrels a day to the present 500,000, speaker after speaker suggested a state income tax.
Speaking to the Sentinel after the meeting Kreiss-Tomkins reviewed the recent history of that prospect. In the 2017-18 legislative session the House, which had a bi-partisan majority coalition, passed an income tax bill – “and Gov. Walker would have signed it,” Kreiss-Tomkins said – but the bill didn’t survive in the state Senate. The Senate, then as now, had a Republican majority and turned it down by a two-thirds margin.
That was what the people who elected them wanted them to do: “Elections matter,” Kreisss-Tomkins said.
No one spoke in favor of the Dunleavy budget Sunday, and every speaker’s comments was followed by enthusiastic applause.
Some comments:
Sam Skaggs, who said his career for 35 years has been in finance, warned the Dunleavy budget would cause “the largest deceleration of our economy” around the whole state, and would “hollow out” Southeast. He suggested a compromise on the PFD, saying high dividends could never make up for the damage caused by the proposed state budget cuts.
Sue Litman said the budget cuts would make people leave town and hurt local business. She called for a reduced PFD and a “fair and graduated income tax.”
Beth Short-Rhodes said the state did not have a fiscal crisis, but a priority crisis. “Will we allow Gov. Dunleavy and his partnership with multinational corporations to devastate our schools, public infrastructure and economy?” she asked. “We have the right and the power to say no, but we will have to say it loudly and strongly in the weeks and months to come.” She called for smaller PFDs, an income tax and repeal of oil tax credits.
Cathy Bagley and Rosemary Carleton stressed the importance of the Sheldon Jackson Museum, which Dunleavy’s budget proposed selling.
Richard Wein, one of two Sitka Assembly member who spoke, called for a state economic policy, saying he found it “problematic that Permanent Fund revenue outruns oil revenue, and that puts the state in an even more precarious position than we are when we are subject to market forces.”
Kevin Mosher, the other Assembly member who spoke, said he did not favor a full PFD dividend, and while the state should consider an income tax there should be a freeze on government expansion.
Larry Calvin, who came to Sitka in 1941, said the state must have an income tax, and to fund government before it takes effect the state could borrow from the Permanent Fund.
Among the teachers who spoke against the education cuts were Joe Montegna, Rebecca Himschoot, Kari Sagel, Steven Courtright, Sarah Ferrency, Susan Brandt-Ferguson, and Phil Burdick.
Sitka High Principal Laura Rogers, along with School Board member Elias Erickson and board president Jennifer McNichol, also stressed the damage that would result from education cuts of the size proposd by the governor.
Pat Alexander called for incremental budget cuts instead of the drastic cuts the governor wants. “It took us years to get to this place and it will take years to balance the budget,” she said.
Kristen Homer, a nurse practitioner at Mt. Edgecumbe High School, said she does not believe PFDs “could make up for the devastation caused by Denleavy’s cuts to education, the ferries, Medicaid and other social services,” and would make the state’s vulnerable people even more vulnerable. She called for reviving the state income tax, repealing oil tax credits, and having a modest PFD.
Eric Jordan said the state should recognize priorities. “We’re bleeding out because of the state’s oil tax credits – $1.25 billion a year,” he said to a round of applause. “That is the first thing we need to address before we start cutting people’s PFDs, and education and Medicaid.”
Ortiz said the public comments made at the Sunday meeting would be recorded, transcribed and distributed to the whole Finance Committee, but that they were not “testimony” in the official use of the term. The entire committee will conduct a hearing 7:30-8:30 Tuesday to take testimony from Sitka and Ketchikan on the Dunleavy budget. It will be held by teleconference, with testimony submitted at the Legislative Information Office here.
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