March 5, 2003, Anchorage Daily News says lawmakers on right track with permanent fund

Posted: Monday, March 10, 2003

More and more, legislators are talking sensibly about the Alaska Permanent Fund. The fund and its yearly dividend payment are not an entitlement, said House Speaker Pete Kott on Monday. But they're important to Alaska's economy and shouldn't be just cut off.

Anything that puts $1 billion a year, in round terms, into the economy is important to all of us. State Rep. Harry Crawford recognizes that in proposing the Constitutional Budget Reserve be used to dampen the decline in dividends if markets continue to batter fund earnings. His notion also anticipates the negative economic impact of huge state budget cuts likely to be proposed by Gov. Murkowski.

Both legislators -- Kott a Republican, Crawford a Democrat -- recognize that state dollars play a huge role in Alaska's economy and that state decisions will have serious consequences, not only for individual pocketbooks today, but also for economic prospects tomorrow. The question is: How do we spread the burdens fairly? And how do we get over the free-lunch mentality of the Prudhoe Bay era?

Alaskans who expect to keep getting public services for nothing are living in a dream world. Last year each Alaskan received more than $5,000 in state services and benefits, including the dividend, while contributing virtually nothing. Ultimately, that's a self-destructive policy, no matter how much we may enjoy it.

In the big picture it's untenable for any state -- even with the North Slope on hand to pay for things -- to both run 20 percent in the red and keep handing out a free lunch to everyone. That's what Alaska is doing now.

Gov. Murkowski's answer this week will be to eat a lot less lunch but keep it free. He's also said to be considering ways to let the Permanent Fund -- which is a financial asset belonging to all of us collectively, not an entitlement to be handed out individually -- help pay for lunch too. The endowment approach long favored by the Permanent Fund trustees (and former Gov. Tony Knowles) is a start.

Now Rep. Kott has offered a line worth remembering: The Permanent Fund needs to be changed from a ''sacred cow'' to a ''cash cow.'' As long as he doesn't make it another excuse for the free lunch, he's on the right track.

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