Alaska Revenue Commissioner Mahoney serves baloney
In a hearing in March, Revenue Commissioner Lucinda Mahoney admitted that the timeline proposed by Gov. Mike Dunleavy to create a fiscal plan was unworkable. The governor wants constitutional amendments on the ballot in 2022, when he hopes to be reelected. After that election, he promises he will do something.
“I recognize that the timeline doesn’t work. However, the governor is not supportive of any new tax without the vote of the people, so I guess what that means is that we would just be spending into the ERA (earnings reserve account) to fund any any deficit balances in the future,” Mahoney told the House Finance Committee two months ago.
Back then, Rep. Bryce Edgmon asked if drawing more money out of savings was Mahoney’s recommendation to Dunleavy to meet the deficit.
“That would not be my recommendation. However, that may be our only choice,” she said.
As I wrote at the time, it is not the only choice. But now that is Mahoney’s and Dunleavy’s recommendation.
Take $3 billion extra out of savings and the future looks great, the state claims, with no need for taxes. The new plan is the latest chapter of the Dunleavy fiscal fantasy.
It would be a “bridge appropriation,” Mahoney claims, that would fund state government until a miracle happens and hundreds of millions of new dollars in state revenue show up, along with hundreds of millions in budget cuts that no one can identify.
In lobbying legislators for the Permanent Fund constitutional amendment, Dunleavy and Mahoney want to decide on the size of future dividends before dealing with the rest of the budget. This is backwards.
It’s in keeping with the Dunleavy idea that he wants to win the gubernatorial popularity contest by promoting big dividends, ignoring the rest of the job. Mahoney and her deputy, Mike Barnhill, are complicit in the new edition of the fiscal fantasy that says difficult decisions should be postponed.
“Then to establish a consensus, really on what is the deficit size, what are our required spending and revenue targets. And then once we establish that, then we can really identify what the new revenue measures are or additional reductions that we need to our budget to enable a sustained, balanced budget,” she said this week.
“And that is the governor’s request for the topic for the second special session,” she said. “So we view these now as working together to establish a structured fiscal disciplined plan.”
The Legislature must demand a rigorous analysis of the Dunleavy plan, not the baloney served by Mahoney and Barnhill.
Responsible revenue department leaders would tell the truth—that a disciplined plan requires full details on the potential size of the deficit, potential taxes and potential budget cuts before a lasting constitutional decision is made on the Permanent Fund.
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