ALL 20 ALASKA STATE SENATORS

ALL 40 ALASKA STATE REPRESENTATIVES

- Testimony of : Josef Princiotta - Before The Anchorage Legislative Caucus - 2/23/02 - Ladies and Gentlemen Good Morning My Name is Josef Princiotta, I am an artist, as you may already know. I represent myself. I will make a brief statement for the record. The balance of my testimony is in printed form. I request that it be incorporated into the records of these proceedings. I have been a resident of Alaska since June of 1964. I came here to assist in the reconstruction efforts following the great earthquake of that year. I came to Alaska to find a way to fit in and be of help to this Anchorage community and hopefully to find a place where I might fit into the fabric of this enormously bountiful and most beautiful state. I found both, and I stayed. Current circumstances are leading this state toward another earth shattering event, of far greater proportions than the quake of '64 . The shock wave of the coming trauma, I call it "the quake of 2004" will ripple throughout every community. It will shake the economic foundation of the entire state. It will impact all Alaskans. It will leave its scar on each and every one of us. Alaska is like a ship, sinking in a sea of red ink. We the residents of Alaska are the passengers on this metaphorical ship. We are in fact the owners of the state of Alaska. This state is currently maintaining the appearance of solvency by raping our savings accounts and by liquidating our assets while you simultaneously distribute massive dividends. Your present fiscal policy is doomed to a catastrophic collapse. We have seen this day coming for a long time. You and your associates have failed to take necessary action. We the people know what the problem is. We can do the math. Per capita spending in this state is completely out of scale. The problem is you are spending money we don't have, to provide services that are not critical to the operation of this state. Promising every thing to every body is like a cancer. Totally unregulated growth. You are the regulators. We elected you to be stewards of our resources, to use good judgment and to act responsibly. Prioritize now, address the problem of ballooning entitlements and reduce spending now. With the possible exception of an additional tax on alcohol, I oppose any additional taxing of the public, residents or tourists, to maintain the spending frenzy that is the budget of the state of Alaska. The very idea is an insult. Before any tax is levied on the people, the Governor and Lieutenant Governor should immediately take a voluntary reduction in pay and benefits of at least 25%. That goes for the Legislature as well. All Directors of state agencies 20% Middle managers 15% and all staff across the board an immediate reduction of at least 10% in pay and benefits. When the weather in Juneau is really bad, the snow and wind are really blowing, the streets are really icy- the call goes out "All non-essential personnel stay home." You have the list of non-essential personnel. You know who they are. The financial weather has turned really bad. Now is the time to put out the word. All non essential personnel stay home and seek employment elsewhere. Ladies and Gentlemen your job has easy parts and your job has hard parts. You do the easy parts real well. >>>>>>>> End of oral testimony - 2/23/02 <<<<<<<< Back To The Top Additional Thoughts. I am opposed to any income (wage) tax, especially a progressive tax of any kind. A sales tax taxes rural residents at a disproportionate rate as they pay more for what they buy to begin with. Before any taxes strong budget cuts need to be made. Budget cuts may be unpopular, but they must be made, and someone needs to step up to the line and get this done. There is an immediate need to control spending, and a need to motivate at the agency and employee level, to actively question how state functions can be prioritized and to seek the availability of other funding sources. I wish to challenge the legislature to address the wisdom as well as the moral and economic propriety of continuing the PFD giveaway. The Permanent Fund was created to provide a savings account which would accumulate and grow as the earnings could be tapped to cover necessary budget components for which declining oil revenues proved insufficient. I am NOT proposing an invasion of the Permanent Fund or any depletion of its principal. Contributions to the Permanent Fund, and inflation proofing it must continue unabated. What I find unconscionable is the perceived need to pay everyone for moving to, or remaining here in Alaska. I have NEVER taken the PFD in any year. Welfare is for charities, and service organizations. That is why I belong to Rotary International. I contribute to its programs, and I serve in several capacities. It's unfortunate that so many Alaskans seem to evaluate right and wrong, fair and unfair, largely in relation to the impact on their personal wallet. It is equally unfortunate when they elect representatives who are unwilling to present the facts to their constituents and to make the tough decisions. This year the state will mail out roughly $1 billion to every resident, irrespective of any need-based considerations. Roughly $200-300 million of those state revenues will be needlessly siphoned off to the U.S. Treasury in the form of income taxes. The "budget gap" could be closed in a heartbeat if the state would close down the PFD bribe system The budget gap could be reduced to a modest problem if we capped PFD's at, $500. If the shock is too much to bear, cap it at a tolerable level with step down decreases over 3-5 years to wean the people from the trough. If the Cremo Plan had been put in place when first presented, today the state of Alaska would have more than enough real income to fully function forever. I oppose any and all new taxes. Expense reduction is the answer. The budget can't be balanced with tourism unless you tax each tourist thousands of dollars to come to Alaska! Is there a valid economic reason to impose an income tax and keep paying $1 billion out in PFD's each year? There is no "budget gap". The state takes in enough revenue to fund the expense side. Where we get into red ink is only after sending $700-1,000 million of state revenue to every person who meets minimum residency requirements, $200-300 million of that is sent (indirectly) to the U.S. Treasury. If our deficit is $1Billion Cut spending. Why is it that so many elected representatives, whether state or federal, refuse to understand this when they are spending someone else's money? If it's your personal finances, what do you do when your income drops? You cut your spending. Why is this so hard to understand, when it relates to government? Back To The Top A Plan That Would Work: Cut state spending to balance the budget this year and every year, regardless of the impact on state services. That is what balance is. Whatever the amount, cut an adequate amount from spending to balance the budget, without pulling it from reserves. If we don't have the money-we don't have the money. Solving this problem will not be easy or pleasant. But you weren't elected to get paid and NOT do what is right. We want and need spending reductions and we need them now. Tell the people the truth and do it now. The state must do as all citizens and businesses do when in financial straits. Cut back. I have heard very little from the legislature about cutting payroll, cutting non-essential services and cutting travel expenditures. I am sure that there is much Governmental waste. Start with trimming the Government fat first. The state has the largest number of employment ads, when I look in the Anchorage Daily News classifieds. Not only does the state have the most ads, but the wages offered are higher than their private sector counterpart. Why? What is the annual payroll expenditure is for the state of Alaska? How much money would a 10% reduction be equal to? Maybe not enough to fill the so-called gap, but, it's a start. Or reduce each department budget by 10%, or at least by 5%. You should assemble a panel of 13 state residents, give them each red pens and let them have a look at the budget. I am available for the job. I am not the only Alaskan that views our budget (overspending) gap this way. The answer is not to take more money from the residents, but to live within your/our means. ALASKANS NEED RESPONSIBLE GOVERNMENT NOW. ALASKANS NEED LEGISLATORS TO BE RESPONSIBLE NOW. Back To The Top "A Debt To Society"? Dear Legislator: Perhaps there is a way to save money within the Department of Corrections and assist inmates in returning to society in better shape than they were in, when they entered the system. If a person has been judged guilty of a state crime that requires them to repay their "Debt To Society" by being imprisoned, is not the expense of that imprisonment, namely being housed and fed by the state, a further "Debt To Society"? I seems that a system of assessing a daily charge to the account of the inmate, for the food, laundry service, and other facilities and services consumed by the inmate, should be considered a part of their debt as well. The inmate, upon entering a correctional facility could be given the choice of "level of comfort" they will have during the period of their incarceration, and informed of the charges attached thereto. For Example: There would be a price for having a color TV and a lower one for black and white, a softer bed costs more than some other, a cell with one cell mate more expensive than a cell with 19 cell mates. There would be a menu ranging from peanut butter and jelly to burgers and fries, with the price scaled accordingly. During incarceration there would be ways for the inmate to "Earn" credits toward the payment of the accruing bill. Credit could be earned by working in service to the facility or by studying and then obtaining a GED or gaining any other academic degree. Perhaps this would be done by correspondence or within the facility's "School" At the end of the period of incarceration, the balance of the account would be payable on a sliding scale not to exceed 10% of the earnings of the convicted felon after they have re-entered society. Full payment may not be possible under this plan and it is not to be expected in all cases. The requirement to repay would keep the convicted "in touch" with the system and keep the system "in touch" with the convicted. Thereby providing a vehicle for encouragement and guidance. Perhaps there could be a method of " full forgiveness of the debt" in return for service, scholastic achievement , and an exemplary attitude, displayed by the felon during his or her incarceration. This plan would apply the Halfway Houses as well. Obviously this plan is not new, and it needs the input of trained professionals. However is seems to me that this system would be of benefit to all concerned. This concept is offered in support of the continuing effort to bring Alaska's expenses into line with its income, without further taxing an already heavily burdened public.: Back To The Top Trick or treat! - Alaska's "Long-Range" fiscal plan. Reprinted from: The Anchorage Daily News Point Counter Point I came to Alaska in 1964, to help, after the Earthquake. I stayed because I found Alaska. I'm happy to say I got here before the oil companies found oil under the North Slope. I hope to be here long after that oil is gone. The oil is still coming out of the ground in large quantities. There may be the occasional new discovery. There may be ANWR. However the oil will not flow forever. Most of this state's operating expenses are currently paid for by the liquidation of its assets. This liquidation is not enough to close the present Fiscal Gap. Selling our non-renewable natural resources is a one-time thing. Treating the proceeds of the sale as income, rather than capital, is as sound a business plan as selling a kidney for a ticket to Disneyland. It is through investment that capital generates income. If all the proceeds from the sale of Alaska's natural resources were invested, the state could realize a stable income, long into the future. During the 70's I was part of a team dedicated to improving the educational services available to communities along the Yukon and Kuskoquim rivers. That work took me to Juneau on several occasions. There I had the pleasure and privilege to enjoy the company and good conversation of then Governor Jay Hammond . The Permanent Fund and the proposed "dividend check" were often the topics of conversation. Now I'm not known for my shyness . I was direct in my criticism of the plan to just give money, the people. If you start something, you are well advised to consider its ending. I asked Governor Hammond, at that time, "What will the state do when the financial circumstances no longer support this annual hand-out of state funds?" I asked him directly "How will you stop feeding peanuts to the gorilla?" Much like the Halloween costumed children, we care little for how the treats got into the big bowl. Where does the candy come from? Few of us stop to consider. "How much candy do you expect to get tonight?" asks one child. "How much candy is there?" comes the answer from another. This is not a scary Halloween story. This is a state fiscal policy originally ill-conceived, presently unsound, and doomed to collapse. And that's why I've never taken a "dividend check". Back To The Top We Remember! My Dear Legislator: When you say: "We (the Legislators) can't cut our expenses (services and handouts) to match our revenue (income)." I hear: "We (the Legislators) refuse to face the truth of the mathematics, namely that we are short 1 billion dollars (approx.) every year, to pay for services provided to the residents of Alaska. While we handout 1 billion dollars (approx.) every year as a service to the residents of the state of Alaska." Using the earnings of The Permanent Fund was "Sold" to us Alaskans, as a method of protecting all Alaskans from additional taxes, in the event the there ever came a day when: "We (the Legislators) can't cut our expenses (services and handouts) to match our revenue (income)." Do you remember? We remember! Further concerns: Alaskans deserve a dependable Government funding system. Spending the funds derived from the one time sale of non-renewable resources, is a fatally flawed, short sighted, and a tragic waste of the bounty of this state. Every time the price of oil dips, Alaska's Government funding falters. Programs started in one year, enjoy no guarantee that required funding will be present in the following years. There is a basic element missing, FUNDING STABILITY. I have no children, but I fear for the future of Alaska's children and I fear for the future of those who will follow. What will we leave for them? A truly LONG RANGE FISCAL PLAN is a must, the sooner, the better. It is NOT "too late" to put Roger Cremo's plan into effect. This would protect us now, and provide a stable income to cover state projects, services and even handouts, on into the future. Spending cuts are not the answer. What is required is STABILITY.