By Dave Donaldson
Legislators have become skeptical of some of the justifications and data they’re getting from the Parnell administration about the future of the state’s economy. Where usually there’s a cautious relationship between the legislative and executive branches of government – the “checks and balances” of government — this year that caution is becoming a bi-partisan challenge, reflecting members’ anticipation of the governor’s proposed oil tax cut.
The House Finance Committee last week began an overview of the Department of Revenue’s long-term income projections for the state. The numbers presented by Commissioner Bryan Butcher showed as much as $1.6-Billion in excess money available for state operations even five years from now.
The skepticism surfaced when Butcher presented a projection of future spending that the state would need to meet to get to that point. But the chart he presented, provided by the Office of Management and Budget, showed a three percent growth in the governor’s budget from now until 2020. Lawmakers thought, that’s unrealistic.
North Pole Republican Tammie Wilson began to question the information. Butcher replied.
WILSON: When’s the last time you remember that the budget from one year to the next only grew by three percent?
BUTCHER:Through the chair Representative Wilson I believe there were some years in the late nineties, early 2000’s that that occurred.
Dillingham Democrat Bryce Edgmond – a member of the majority caucus – said budgets in the nineties are not like the budgets lawmakers have seen recently.
That’s yesterday. It’s what, ten percent, eleven percent in the operating budget. It increased. The point I’d emphasize – and everybody around the table – that this is a picture that clearly doesn’t mirror where we’re at now.
Butcher reminded members that the chart came from the Office of Management and Budget. But Anchorage Democrat Mike Doogan wouldn’t leave it alone.
I’m afraid you’re going to have to listen to what we say about this. It is your slide. I do think it’s misleading. I would appreciate it if it never shows up again. Or only shows up again when there is actual support for the information it contains.
Even the committee’s co-chair showed dissatisfaction – not with Butcher himself, but with the information. Haines Republican Bill Thomas says the budget started the session showing a nearly five percent increase in spending – not the estimated three percent. And he reminded members that their own credibility is on the line.
We already have a number beyond the three percent. And then you go home and people say You blew it out of proportion. We didn’t do anything we’re just trying to keep people in jail and the courts moving.
More challenges came up when Butcher gave departmental estimates of the amount of oil expected to be produced. Under comments by Kotzebue Democrat Reggie Joule the commissioner agreed that there have been errors in previous projections.
JOULE: Somebody’s been feeding us a line somewhere.
BUTCHER: I wish I could speak to the prior years. Unfortunately I’m kind of limited to the information I have right now. I wasn’t sitting in front of the committee talking about a certain percent. This is just what we have based on historical and based on the book that came out two or three months ago.
Dillingham’s Edgmond made the connection between the current budget consideration and the reliability of information that will be needed when the committee gets to the governor’s bill cutting oil taxes. He noticed that, while price estimates are not within the state’s control, the administration seems to have a lot to say in predicting future production.
On the production side there is discretion that can be applied administration to administration to serve whatever goals that administration may have.
That tax bill is not yet before the Finance Committee. But members have given a warning to the Parnell administration: they need reliable data to justify cutting revenue.