Fiscal Policy Caucus knows importance of long-range plan

Posted: Friday, March 30, 2001

It's a start, and for that, legislators

involved in the new Fiscal Policy Caucus deserve some praise.

The group, which held its first public meeting earlier this week and is scheduled to meet again today, is working on a long-term fiscal plan for the state.


Such a plan for Alaska is the state's most pressing need -- ahead of a gas line from the North Slope, ahead of answering the questions swirling around the high school exit exam, ahead of funding for education. Without such a plan, the state has no road map for the future. Every decision the state makes should be made in the context of a long-range fiscal plan; lacking such a plan, the state has no focus.

The group has much going for it, including:

n Bipartisanship. Getting out of the box of political parties is essential if the group is to succeed in, first, developing a plan and, second, in winning the support of Alaskans, most of whom claim no party allegiance. Group members have noted that the state's biggest accomplishments, including establishing the Alaska Permanent Fund, were the result of bipartisan cooperation.

n Open meetings. Allowing the public to hear its discussions is an important step in having the public understand Alaska's budget gap and in engendering trust for the process. The more the public understands the problem, the more motivated it will be to help solve the problem. The more open the process that leads to a long-range fiscal plan, the more the public will support the plan.

n Involvement. Half the House of Representatives showed up for Tuesday's meeting. Almost all the state's freshman legislators are involved in the group -- including Kenai Peninsula Reps. Ken Lancaster, Drew Scalzi and Mike Chenault. That kind of legislative involvement indicates a fiscal plan is more than a lip-service priority and that the state's new crop of legislators is serious about bridging the state's fiscal gap.

n Leadership. While the group plans to solicit ideas from the public during the interim, it will not put its plan out for a "vote of the people." The public needs to be involved in crafting the plan -- and legislators need to incorporate the public's ideas in their plan. While lawmakers should never be afraid to solicit the public's opinion through a vote, they also should not be afraid to make tough decisions -- that's why they were elected. It's what is called leadership. In looking at the big fiscal picture, lawmakers may see the right thing to do is the politically unpopular thing to do. The right thing may cost them support in the next election, or it may give the public a newfound respect for the job legislators are asked to do.

n A plan of attack. The caucus will form subcommittees to study a wide array of options -- everything from doing nothing to instituting a sales tax, to re-establishing an income tax, to changing oil taxes, to making government more efficient. The group also plans to look at what deferred maintenance is costing the state and what would happen if the oil quit flowing tomorrow or if there were another dramatic drop in prices.

Caucus members will solicit the public's ideas and opinions about the group's ideas over the interim -- and, if all goes well, legislators will approve a long-range fiscal plan for the state in 2002. Our hope is election-year politics will not cause the Fiscal Policy Caucus to lose its focus or its motivation.

While it's important for lawmakers to listen to the public's ideas and concerns on this issue, it's also important for the public to listen to lawmakers about why a long-range fiscal plan is needed. Alaska's budget gap is real and not a conspiracy designed by a bloated state government. Alaska spends more money than it takes in. For several years, the state has been filling its budget gap by using money from the Constitutional Budget Reserve, a state savings account. At current spending levels, it's estimated the account will be gone by December 2005.

If Alaskans believe preserving the permanent fund and its dividend program should be a priority, then it's imperative the state get its fiscal house in order while there are still options. Doing nothing -- even delaying a long-range fiscal plan -- should not be considered viable solutions.

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