Wednesday, September 10, 2008

The Revisionist Reformer: Palin rewrites fiscal record

Sarah Palin and John McCain have been stampeding around battleground states this week lauding her accomplishments as a fiscal Rambo. When you take a hard look at her record, Sarah the “Reformer” seems to be revising history to meet the carefully crafted tale the McCain campaign is spinning.

Some fun facts about Alaska include: Of the 50 states, Alaska ranks No. 1 in taxes per resident and No. 1 in spending per resident. Its tax burden per resident is 2 1/2 times the national average; its spending, more than double.

Here are some details about Palin's fiscal record:

1. State spending spiked under Palin.

Since taking office as Governor in late 2006, Palin has presented two state budgets:

  • Palin asked for a 27 percent increase in the state's operating budget over two years. The fy 2009 Palin budget request was $8.496 billion. That's $12,680 per capita for a for a state of 570 thousand persons, or $51k for a family of four. No other state comes close to this level of state government spending.
  • The fy 2009 Palin budget request included $2.571 billion in federal funds, or $4,510 per capita in money from Washington, DC. Every year, Alaska takes more federal money per capita than any other state, and ranks No. 1 in the gap between what it sends to Washington and what it gets back.
  • Palin touts that she has vetoed “nearly $500 million” in wasteful spending, but that’s less than 2% of the state’s behemoth budget. [Source:State of Alaska Fiscal Summary, Legislative Finance Division]

2. Budget surplus result of windfall profits tax

Alaska had a nearly $6 billion budget surplus last year (FY ending June 08) due almost entirely to Palin’s massive windfall profits tax on oil companies (not self-proclaimed savvy fiscal skills). Given skyrocketing oil prices, the state is expected to rake in about $11 billion this year. In fact, 90 percent of Alaska's tax revenues come from oil, while state spending per capita is by far the highest in the nation

Ironically, John McCain has been campaigning as a tax-cutter who opposes raising taxes on oil companies because he says they discourage investment and cut production.

3. Alaska largest beneficiary of earmarks

As previously reported in this blog, under Palin's leadership, Alaska asked Washington for 10 times more money per citizen for pet projects. This year, Alaska asked for earmarks totaling $198 million, about $295 for every Alaska citizen. Under Palin, Alaska is still hands down the largest per-capita consumer of federal pet-project spending.

4. Palin racked up debt in Wasilla

Also previously reported in this blog, as mayor of the minuscule town of Wasilla, Sarah Palin hired a Washington lobbyist in 2000 to secure federal earmarks for her community. Palin secured over $27 million in earmarks from 2000-2003, averaging $6.7 million in federal money every year for her town of about 6,700 people. In fact, Alaska, the 47th most populus state, receives more money per capita in federal earmark money than any other state.

When Palin left office in 2002, Wasilla had “racked up nearly $20 million in long-term debt,” or roughly $3,000 of debt per resident. Part of the debt was a result of Palin’s botched $15 million indoor sports project. In her haste to provide Wasilla with a spiffy new sports center, Palin neglected to make sure the city had unchallenged title to the land before building roads and utilities for the project. According to the Wall Street Journal:

"The misstep led to years of litigation and at least $1.3 million in extra costs for a small municipality with a small budget. What was to be Ms. Palin's legacy has turned into a financial mess that continues to plague Wasilla."

According to the Anchorage Daily News, when elected, Palin supported a newly-imposed 2 percent sales tax. Those tax revenues helped fund the infrastructure that made the town a magnet for big box stores. That growth made it possible for her to slash the sales tax rate to 0.5%—a step she used to help promote her run for governor. But she did not cut town spending. In fact, its operating budget increased from about $4 million to $6 million during her tenure.

5. Palin's tax breaks hard to find

Despite the swashbuckling tax-slashing image McCain and Palin are promoting, Palin has offered minor tax breaks as Governor, including:

  • A tax credit for film production in the state, offering about $20 million per year in breaks.
  • A cut in an annual business license fee from $100 to $25 (the legislature went half way to $50).
  • A one-year suspension of the state fuel tax to save taxpayers about $40 million.
  • A repeal of tire taxes to save taxpayers $2 million.
  • A tax credit for commercial salmon harvesting to save taxpayers about $2 million.

6. Palin's TravelGate undercuts claims of frugality

Palin’s claims of budget frugality are under scrutiny based on new revelations about her travel expenses. She has charged her state a daily allowance, normally used for official travel, for more than 300 nights spent at her home.

An analysis of travel statements filed by the Palin shows she claimed the per diem allowance on 312 occasions when she was home in Wasilla and that she billed taxpayers $43,490 for travel by her husband and children.

Former Alaska Democratic Governor Tony Knowles, questioned both the state's paying for Palin's children's travel and for Palin's collecting the state per diem while staying in her Wasilla home. Knowles said:

"When you're living at home, you don't pay yourself for living at home," Knowles said in an interview Tuesday. "And if you use a technicality to get around that rule so you can get paid for it, it's not right."

Knowles said in an interview last week that when he was governor his children were allowed to fly on state-owned King Air propeller planes, but that the state did not buy them commercial airline tickets. By contrast, here are few of Palin’s expenses:

  • July 7-15, 2008: Palin daughters Piper and Bristol flew to Philadelphia with the governor for a National Governors Association meeting. The state lists the purpose of the girls' trip as participating in "governor's youth programs and family activities." The airfare and lodging cost $2,500.
  • April 3-6, 2008: Piper joined the governor in the Anchorage area because -- according to state travel records authorizing the trip -- the first family was to read to students a Wasilla Christian school. The round trip flight from Juneau cost $550.
  • October 7-11, 2007: Palin's oldest daughter, Bristol, flew with the governor to New York City at a cost of $1,390 because she was "invited to attend Newsweek's Third Annual Women and Leadership Conference with the governor," Palin's office says. They stayed in a $707-a-night hotel for four nights.

The McCain-Palin ticket continues to operate under the belief that if you say it on TV, it becomes true. So they're spinning an increasingly tall tale of Palin as a brash fiscal reformer when the truth is her record doesn't support it.

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