Conference did its work; now it's time for legislators to act

Posted: Sunday, February 15, 2004

Congratulations are in order to those who participated in last week's Conference of Alaskans. In three days, the 55 delegates of all political persuasions from all regions of the state were able to reach consensus on some of the thorniest questions facing the state.

Perhaps the delegates now are available to give legislators some lessons on how they can do the same.

Lawmakers already are talking about how tough it will be to muster the two-thirds support needed in the Legislature to put two constitutional amendments that the conference delegates recommended before voters. One amendment would change the way the permanent fund is managed so that distributions are calculated on a percent of market value, the so-called POMV approach. The other would guarantee permanent fund dividends in the constitution.

Although there appears to be growing support for the POMV approach, which is recommended by the permanent fund's board of trustees, there is much debate on how the 5 percent generated under the formula should be spent. Should half go to dividends and the other half to state government? Should more go to dividends? Less? Arguments can be made on all sides.

(As a side note to the POMV approach: The Permanent Fund Corp. should not spend $1.4 million for an advertising campaign, as it is proposing to do, to advocate for the POMV proposal. If a group of citizens wants to band together to do that, fine, but to use public money on such a campaign will backfire. It's a poor use of public resources.)

There also are lots of good reasons not to give dividends constitutional protection. One of the best arguments against such a move is that it automatically makes dividends more important than anything else more important than money for schools, more important than money for public safety, more important than money for roads. Is that really what Alaskans want to do?


Maybe not.

And that's the point. Alaskans should be allowed to decide.

Legislators have had years of opportunities to remedy the financial problems facing the state today. For the most part, they've taken the easy road. They've hesitated to institute broad-based taxes and they've refused to use part of the earnings of the fund to help pay for government even though they have the legal authority to do just that. Sure, they've made cuts, but those cuts have reduced the quality of life in Alaska to the point where, as the Conference of Alaskans noted in its letter to the rest of us, "... state spending is inadequate to meet current needs for public education, public protection and many other necessary state services."

While the debate on the best course of action to get the state on solid financial footing should continue, legislators despite what they believe about either of the proposed amendments should let voters have their say.

Doing so holds the potential to get the state off the dime and making some headway in solving this problem. That's something legislators have been unable to do.

Lawmakers and the governor need to trust the collective wisdom of voters; after all, voters did put them in office. And who better to decide how the fund should be managed and used than the Alaskans the shareholders who benefit from it?

While Alaskans continue to wrestle with how best to fund state government, protect the permanent fund and their dividend checks, one important irony should not be forgotten: Alaska is not a poor state, despite our financial troubles. As of Thursday, the state had $28,106,000,000 in its permanent fund. Earnings from the fund were intended to help pay for state government when oil revenues began to decline.

How sympathetic would any Alaskan be to a multi-millionaire who refused to cloth and feed her children because her checking account was almost empty and she didn't want to touch her savings account because that was for "the future"?

The most important legacy to come out of the Conference of Alaskans may not be its recommendations, but how delegates underscored the need for action. As delegates stated in their letter: "The fiscal crisis facing Alaska is a clear and present danger to the adequate protection of necessary public services. ... It is time to act."

Fifty-five citizens put the state's best interests first during last week's conference. For that, they deserve the gratitude of the entire state. Legislators should now follow their lead.

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