Long-range financial plan should be focus of legislative session

Posted: Sunday, January 07, 2001

There's a tad of irony -- maybe even poetic justice -- that oil prices took a dive in the weeks before the opening of the 22nd Legislature.

As of Friday, the price of a barrel of North Slope crude was back up to $22.38 -- higher than the $20.09 of the end of December, but down from the $32.50 of just a few short weeks ago. The fluctuation should serve as a kick in the pants to lawmakers who think they have more important things to do than develop a long-range fiscal plan for the state. They don't.

A long-range, comprehensive fiscal plan must be the priority for lawmakers this session.

A quick, short-term fix won't do. Legislators need to look at the big picture -- not a plan for capital projects here and a municipal dividend program there. There's got to be more to the equation than leaving Alaskans' permanent fund dividend checks alone. Admonitions to "cut the fat" from state spending won't remedy the state's deficit spending. There's been a lot of belt-tightening and fat-cutting over the past five years, and the state is still in a deficit-spending mode.

A solid, long-range fiscal plan, however, can't be written without a clear vision of the kind of state current residents want to leave future generations.

That vision for the state is as important as the long-range fiscal plan. In the business world, corporate entities define their future in a strategic plan. That plan becomes a road map for reaching goals; it's closely tied to the budget. After all, if you don't know what you want to do, how do you know what it will cost?

The state's long-range fiscal plan should go hand in hand with Alaskans' vision for the future -- a strategic plan. Do we only care about growing our permanent fund dividend checks? Or, do we want an educational system second to none? Do we only want lawmakers to "cut the budget"? Or, do we want to make sure we have money to maintain and improve the infrastructure on which economic development depends? Are we satisfied with the status quo? Or, do we want to earn a reputation as a state with a vision -- and a bright future? Are we content to have our young people leave Alaska for greener pastures because they can't find a challenging job or get the training and education they desire and deserve? Or, do we want to develop a university system and training programs that others would want to emulate?

A long-range fiscal plan is less about today's bottom line and more about tomorrow's stability. Shortcuts won't get us to that stability. Lawmakers, with the help of all Alaskans, need to make some tough decisions. And they need to make them sooner, not later.

Alaska's fiscal gap won't miraculously disappear even with a steady diet of budget cuts. Like it or not, as part of a long-range fiscal plan, legislators need to look at new sources of revenue for the state's coffers. A statewide sales tax, a personal income tax, increased user fees and a cap on the permanent fund dividend should all be a part of the discussion.

Those new sources of revenue need to be debated in the context of how they will be used. Most Alaskans don't want to be a part of "funding government"; however, they might not be opposed to investing their hard-earned cash in education, in health services, in public safety, in better roads, in improved water quality, in safe schools or in any number of things that will result in a tangible benefit.

Asking Alaskans for money without showing how it will be spent, where it fits in the state's overall financial picture and why it's needed to help the state reach its goals would be an exercise in futility. It's why the infamous advisory vote of 1999 went down in flames.

It's not too late to put the state on solid financial footing. Doing nothing, however, will mean the state saves itself into poverty or depletes all it has worked so hard to save. And when that's done there won't be any options.

As the 22nd Legislature gets under way, Alaskans still have choices. In order to make the most of those opportunities, Alaskans need to make sure lawmakers know their most important job this session is not wrangling over a budget, but establishing a visionary, long-range fiscal plan that will serve current and future Alaskans well. Anything less will miss the mark.

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