By Allison Sayer for Seward City News –
Governor Walker delivered the State of the State Address on Wednesday, January 18. The main topic of the address was the state’s fiscal status.
The Governor started by acknowledging his wife and Alaska’s state employees. He also took a moment to thank the public for their support during his recovery from cancer. Then, he dove into his main message: Alaska’s fiscal problems will not go away without both cuts and revenue increases. Governor Walker warned Alaskans that “Denial won’t make the problem go away,” and “Hope doesn’t pay the bills.”
Without mincing words, the Governor reviewed “hard truths” facing the State. State revenues are down over 80%. The deficit is around 3 billion dollars. Walker emphasized Alaska will not reach solvency based on oil exploration alone. Oil prices would have to reach $100 per barrel or the flow of oil would have to triple to bring Alaska into the black. The governor described these scenarios as “unlikely.” As a refreshing change from national politics, Governor Walker did not spend time assigning blame for these problems to any parties or individuals.
Governor Walker reviewed some of the cuts comprising the 44% state budget cut. The cuts included reductions in government spending on property, travel, and salaries. The Governor acknowledged some of these cuts were painful. 2,000 families lost state heating assistance. The Department of Social Services was cut by 13%. Health centers, DOT stations, and State Trooper posts closed. The state court system now has a half day on Fridays. The state sold off assets. 3,000 state employees have lost their jobs. Remaining employees have taken unpaid furloughs and paid more for health insurance. The governor noted he reduced his own salary by 1/3.
Governor Walker continued to outline proposals he acknowledged would be unpopular. These included the dreaded “t” word. According to Governor Walker, “We are the lowest taxed people in America.” The Governor proposed an increase in fuel production taxes and a “modest” state income tax. He also proposed additional Permanent Fund Dividend reductions.
Governor Walker discussed economic diversification in Alaska. He briefly mentioned the timber, mining and fishing industries, federal projects, and tourism. He encouraged Alaskans to visit farmers’ markets, stating millions of dollars would circulate if every Alaskan spent $5 per week. The Governor cited the Alaska natural gas pipeline as the best chance to revitalize the economy.
Alaska’s economy remains heavily dependent on oil. Governor Walker did not mention Donald Trump by name, but he did state the “new administration” could lead to increased oil drilling. He stated he “reached out” to the new administration encouraging them to support drilling ANWR. He also encouraged increasing exploratory wells and creating “toll roads” for the oil industry.
After delivering the “unpopular” portion of his speech, Governor Walker took some time to review legislative highlights from the past year. These included work to have tribal courts administer justice to their own citizens for certain crimes, and legislative work to keep Native children in crisis within their communities. A trans-boundary working group was created to address Canadian projects that could impact Alaskan waters. He did not specifically mention these projects by name, but it is likely this group was created in response to several large scale mines proposed in British Columbia. Several Southeast Alaska advocacy groups have voiced strong opposition to these projects.
The Governor reiterated his commitment to the Medicaid expansion in his address. “All Alaskans deserve access to healthcare,” he said, adding that “behind each number is a person whose life has been improved or spared.” The Governor added a personal stories of constituents who had told him they would not be alive today without access to medical care. He also stated Medicaid expansion brought 316 million federal dollars into the state.
The Governor encouraged the legislature to pass a variety of legislation. He endorsed enacting the Alaska Opioid Task Force recommendations, especially recommendations aimed to reduce the flow of opioids. These included limiting prescription quantities, educating healthcare providers, and monitoring prescriptions statewide to prevent one user from obtaining multiple prescriptions. He also encouraged the legislature to support a road from King Cove to Cold Bay, stating it would provide “lifesaving” access to medical care for residents during emergencies.
Governor Walker reviewed some of the other challenges facing Alaska. These include sexual violence, climate change, and an under-performing education system. On climate change, the Governor returned to his fiscal message. He called the Arctic “ground zero” for climate change, and stated it would be important to have fiscal reserves to deal with future challenges climate change creates. The Governor did not recommend specific changes to the education system, but he did state that a task force was working on reforms.
The Governor took credit for accessing Federal funding to process backlogged evidence kits collected from sexual assault victims. He described this as a way to apprehend criminals and prevent future violence. This was part of a national program allowing states, counties, and municipalities to apply for funding to process these kits. Evidence had been languishing in state police facilities for years prior to the release of these grants. The federal grant program was essentially free money for police departments that could only be used for this one specific purpose.
Governor Walker’s speech did not include any name calling. The Democratic and Republican responses to the address were also fairly neutral. The Democrats disagreed with the Governor about the Permanent Fund Dividend. The Republicans disagreed with the Governor’s description of our economy as “in crisis,” and were concerned that increased taxes on the oil industry might limit production. The Republicans advocated a statutory spending limit, and reiterated their commitment to oil production. None of the speakers made any deprecating remarks about the other party.
To wrap up his address, Governor Walker made a plea for the legislature and the state’s citizens to work together during this difficult time for the state.