Alaskans appear to be engaged about the fiscal precariousness of our state unlike in past financial meltdowns.
Perhaps it’s because of the massive scale of the budget deficit the state faces in the next fiscal year, which starts June 1. How big is it? An estimated $4 billion as of today, if the Legislature doesn’t act either on Gov. Bill Walker’s proposals or something comparable of its own making. Alaska has enough money in its savings accounts — not counting the principal of the Alaska Permanent Fund — to cover the gap, but the money in those various accounts will run out in about two or three years after that if nothing is done for the coming fiscal year.
Then we’ll be out of money, except for what’s in our beloved permanent fund. That money can’t be tapped, however, without a statewide vote of Alaskans.
Alaskans have for year after year heard about sharply declining oil production, but the financial impact of that was offset during that period by the soaring price of oil. Now Alaska and the rest of the world are immersed in a global oil price collapse and swimming in a supply of crude. Here at home, low prices and low production have produced the crisis that is upon us today.
And it’s hard to find anyone, whether here or elsewhere, who believes oil prices will rebound to the $100-plus levels that kept our stick house upright.
Broad public support shouldn’t be a requirement for legislators to act to get us out of this; they are supposed to be in Juneau to do what’s best for the state, after all, and not what’s best for them as individuals. But having public support should make their task easier.
That’s why it’s heartening to see the involvement of such organizations as the Rasmuson Foundation, which has its Plan4Alaska (plan4alaska.com) campaign, and Alaska’s Future (www.akfuture.org), a group of more than 100 businesses, corporations and labor organizations and with an extensive statewide leadership council. Both are urging action during the current legislative session.
The Rasmuson Foundation held a packed town hall meeting and panel discussion in Fairbanks on Wednesday that was well attended, with people asking many questions and expressing a real grasp that Alaska has a real problem on its hands. The foundation plans other meetings elsewhere in the state, too, and even has an interactive element on its website that allows the users to come up with their own mix of components to close the budget gap.
Alaska’s Future has videos and other information on its website that explains the budget situation in easily understood language.
It’s also encouraging to see Gov. Walker out on the campaign trail, albeit a campaign of a different sort. The governor has been in office for just 16 months but now is campaigning vigorously for a solution to the fiscal crisis. He has put forward a multi-faceted proposal, one that includes additional budget cuts, an income tax, a variety of other taxes, and a restructuring of the Alaska Permanent Fund and the state’s savings accounts. That last item would provide a steady and stable stream of funds to help pay for government while ensuring a continued annual dividend.
The governor detailed the crisis and pitched his plan at two events in Fairbanks on Friday, one that packed the expansive Gold Room at the Westmark Hotel and one later in the day at the Borough Assembly chambers.
Amid all of this, the Alaska Legislature has been working toward a solution, but whether it’s a full solution this year or a partial solution remains to be seen. The House, to its credit, gave priority to budget-related legislation to try to speed the process, but the Legislature is scheduled to adjourn its regular session on April 17 — that’s 23 days from today. Time is short.
Alaskans have always valued solving their own problems. This one isn’t going to go away. This time it’s different. That’s why it’s important that Alaskans not only become involved now but also stay involved as Gov. Walker and the Legislature search for a long-term solution to our collective fiscal mess.
— Fairbanks Daily News-Miner,