Sen. Donny Olson Outlines Plans For State Budget, REAL ID

Feb 3, 2020

Sen. Donny Olson listens to testimony in a Senate Judiciary Committee meeting, March 5, 2014.
Credit Skip Gray / 360 North

Alaska Sen. Donny Olson represents the state’s largest senate district. It stretches from the lower Yukon River, across the Bering Straits region, into the Interior, and spans the North Slope Borough. His work in the Legislature requires him to support rural communities across this vast landscape. KYUK talked with Olson about his plans for this session.

The looming issue for state government remains the same: money. The pressing question is, how can lawmakers fund state services and balance the state budget with a $1.4 billion deficit? Olson says that the task will require a combination of cutting spending and raising revenue. The first place he would cut is the Alaska Marine Highway system.

“The idea that you have these ferries running around that are half empty all the time, especially during the winter months, I could see that there could be more efficiencies with that,” Olson said.

Olson does not support Gov. Mike Dunleavy’s proposal to mothball the entire Marine Highway system, though. 

As far as increasing revenue, the first place Olson would look is the oil and gas tax credit system. The system greatly reduces the amount of taxes that oil and gas companies pay in Alaska, and Olson wants the legislature to increase that tax rate.

“It’s time for us to have our time to adjust those tax credits to make sure we as the state, which are broke and going broke, don’t go outright bankrupt,” Olson said.

Olson is also willing to discuss a statewide sales tax and a state income tax to raise revenue. He says that both would require careful scrutiny on how they affect rural Alaskans. Olson rejects the governor’s proposal to require public votes on new taxes. 

“People elected the legislature to come down here and deal with this stuff. They elected the governor to go ahead and come up with answers on how you’re going to get revenues, and not just give it to the people. The people don’t know, necessarily, all the intricacies of what the oil tax credits are, how much the oil tax credits are owed by the State of Alaska,” Olson said.

Olson wants to raise revenue, partially to avoid cutting state services that benefit rural Alaska, like Power Cost Equalization, which subsidizes energy costs in rural areas. Olson says that he wants to support Sen. Lyman Hoffman’s plan to make the Power Cost Equalization funds non-sweepable, meaning that they can’t be automatically pushed into another state account to pay for another state budget item.

An area where Olson wants the state to appropriate more money is to helping rural Alaskans get REAL IDs. The state-issued licenses will soon be required to board commercial airplanes and enter federal buildings. The Dunleavy administration has asked for private donations to help issue the IDs in rural areas, a request that Olson told KYUK “offended” him.

“In my 20 years I’ve been in the Senate, I’ve never heard of a government official asking for private donations to fund their travel to rural Alaska. If the government mandates it, they ought to pay for it, or at least pay a portion of it so it can be affordable,” Olson said.

The October 1, 2020 REAL ID deadline is federally mandated, and Alaska has already gotten an extension. Olson suggests Dunleavy use his close relationship with President Donald Trump to secure another extension, which would allow the state time to develop a better plan to issue these IDs to rural residents.