For prosperous future, state needs fiscal plan

-- Voice of The (Anchorage) Times - March 27

Posted: Tuesday, April 03, 2001

The Legislature and Gov. Tony Knowles are edging toward starting work on a long-range fiscal plan for the state. Leaders from all parts of the political spectrum are eyeing the prospect of a plan rather nervously.

Their hesitance is understandable, given the likelihood that such a plan would at least have to consider the word, taxes, even though new taxes may be some years in the future. It also would look at what role the permanent fund should play in Alaska's economic future, and tapping the fund is a politically sensitive issue.

The politicos are reluctant to lock the state into a course that would be difficult to change. But they should forge ahead, try to come up with something sensible and build in whatever safeguards are necessary to make such a plan a viable and valuable public policy document.

Public acceptance of new taxes right now is unlikely. That will come only when the state is clearly facing a fiscal emergency. But such an emergency is difficult to forecast and deal with when state leaders fail to look farther than the next legislative session or the next election.

At the moment, the Democrats seem to be pushing for a fiscal plan while the Republicans are dragging their feet. That almost certainly means the GOP is nervous about what the Dems want to include in their version of a plan, a legitimate concern.

But the movers and shakers in the business community are genuinely concerned about the lack of a fiscal plan and want state leaders to get on with one. A recent survey of Alaska's foremost business groups showed that to be one of their chief concerns.

Among those growing nervous are Commonwealth North, the State Chamber of Commerce, the Resource Development Council, the Alaska Support Industry Alliance and the Alaska Miners Association.

In recent years the Legislature has focused -- appropriately -- on cutting the state budget. Many such cuts were long overdue and were made necessary by the fact that North Slope oil production is half what it was a decade ago. The decline was natural and the oil producers are working to slow or arrest it, but state government is not presently geared for a future where oil revenues will fund a smaller portion of its needs.

In some cases, more money will need to be spent, especially in areas such as fisheries and tourism marketing, new economic ventures and funding for the University of Alaska.

Those are economic engines that can or should grow the private sector and state revenues.

We urge the state's political leaders to get past their jitters and work toward a viable plan for the future. A viable, prosperous future for our children and our grandchildren are hanging in the balance.

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