Fiscal Letter to House Ways and Means Committee

April 26, 2021 

The Honorable Ivy Spohnholz, Chair
House Ways and Means Committee
Alaska State Legislature

Submitted via House.Way[email protected]

Re: RDC’s support for a long-term fiscal plan

Dear Chair Spohnholz and members of the committee:

The Resource Development Council for Alaska, Inc. (RDC) is writing to share our top legislative priorities with you and members of the committee, including our long-time support of a long-term fiscal plan for Alaska. 

RDC is a statewide trade association comprised of individuals and companies from Alaska’s fishing, forestry, mining, oil and gas, and tourism industries. RDC’s membership includes Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.

The RDC board of directors, which consists of 78 statewide members, meets each year to develop our top legislative priorities, a copy of which is attached to this letter. Our board and our membership are companies in all sectors across Alaska that employ tens of thousands of employees.

 

For more than 25 years, RDC has advocated for a long-term fiscal plan, including efforts to limit unrestricted General Fund spending to a sustainable level, support some use of the Permanent Fund earnings as part of a fiscal plan, and tax policy and incentives that encourage future investment in Alaska’s resource industries. 

Legislative Priority: Stable, long-term fiscal plan

  • Advocate to limit unrestricted general fund (UGF)* spending to a sustainable level and implement a meaningful limit to spending.
  • Encourage the legislature to allocate a percentage of the Permanent Fund earnings to the UGF to support essential services first.
  • Advocate to diversify and expand the economy in Alaska, by reducing the budget deficit to encourage long-term investment in the private sector. 
    *UGF includes: Operating budget, capital budget, statewide obligations, but does not include deferral of liabilities. 

Permanent Fund earnings should be part of a long-term, sustainable solution to Alaska’s fiscal situation. State law allows these earnings to be used to support essential services. Governor Jay Hammond’s vision for the Permanent Fund included the eventual use of the fund’s earnings to help pay for essential government services. 

The private sector is the foundation of Alaska’s economy, and its underlying health is the key to sustaining jobs, state government and the overall economy. This takes massive amounts of capital and the trust of investors that the government will not simply change the rules after the investment is made. To sustain our economy, Alaska needs to encourage new investment, jobs and private sector growth, and that can benefit from the State developing a stable, long-term fiscal plan. A stable, long-term fiscal plan allows the private sector to know what their long-term risks will be, and without a fiscal plan, the business community will not invest to their fullest potential.

Alaska’s natural resource industries depend on stability, which includes a state fiscal policy that encourages investment in our state and keeps Alaska open for business. Alaska’s oil and gas, mining, tourism, fishing and forest industries already have skin in the game, paying significant taxes to state and local governments, and providing jobs to Alaskan families. A stable, long-term fiscal plan would help to provide certainty and would improve the opportunity for jobs and future investment, incentivizing economic growth, which in turn would grow the revenue pie for both the private and public sector.

Thank you,
Resource Development Council for Alaska, Inc. 

Enclosures:     Top Legislative Priorities
                        RDC Board of Directors List