Ben Stevens may have shocked the Capitol with his idea for financing school construction through Alaska Permanent Fund earnings, but he's on to something. Best of all, he's willing to make an investment decision.
The state Senate president would use permanent fund earnings for $337 million in university and school construction and maintenance. He estimates the cost to Alaskans would be about 1 percent of their dividend checks, or about $300 over 15 years.
''I think the return is worth it,'' Sen. Stevens said.
And hallelujah to that. Treating the permanent fund like a sacred cow is one of the reasons for the long, sad stalemate in solving Alaska's public finance problems. Oil prices are historically high, so most legislators are behaving as though the problem's been solved by a spike in the markets. That is shortsighted. Sen. Stevens is right to raise the question of using Permanent Fund earnings for public purposes now, while the pressure is off, rather than waiting for another crisis and more deficits.
Most legislators have put themselves in a box by promising a public vote before permitting any use of permanent fund earnings besides giving them away in dividends. That leaves little chance for other investments like higher education, to pick a particularly promising example to get traction in Juneau.
Sen. Stevens' proposal apparently surprised everyone, especially because it showed up more than two-thirds of the way through the legislative session. The chances of the proposal moving through the Legislature this session don't start out looking good.
The idea does, however, touch some good political notes: Education at all levels is the most popular cause with voters, and construction projects always have a built-in constituency with contractors, unions and related trades. The University of Alaska Anchorage would get its $71.6 million science center, which is the university system's top priority statewide. Another $71 million would pay for school construction, especially in the stressed-out Matanuska-Susitna Borough. Even the Anchorage Museum of History and Art would get $5 million for its planned expansion, a neat of the museum's important educational role.
For all this, if calculations are correct, Alaskans would give up 1 percent of future dividends, an amount that probably would be dwarfed anyway by ordinary fluctuations in the markets. The proposal amounts to a tiny flat tax on future dividends, which are a privilege, not a right. The plan is inherently regressive, in the sense that taking a dollar out of lower-income pockets hurts more than taking the same dollar from more fortunate high-income citizens. It would be better, and fairer, to raise the same amount with a progressive general tax.
But this is better than nothing. Public education traditionally has been the great equalizer in American life. Putting dollars into better public education is, or should be, an investment in opportunity for all.
The key here is to make an intelligent comparison. First, do the numbers really work? That needs study. If they do, then another comparison comes into play: Is this investment in education buildings worth more to Alaskans than $300 in their pockets over the next 15 years?
Legislators are supposed to be paid to ask and answer questions like that. Good for Sen. Stevens for raising it.
Anchorage Daily News,
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