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Town meeting great start on worthwhile project for Alaskans

Posted: Sunday, October 07, 2001

A week after shaping the landscape of the Kenai Peninsula at the polls, residents have another opportunity to mold the future.

A town meeting, hosted by Rep. Ken Lancaster, R-Soldotna, will be from 5:30 to 8 p.m. Tuesday at the Soldotna Senior Center, 197 Park Ave. Public participation is vital. The topic will be the state's finances. The goal is to hear central Kenai Peninsula residents' ideas on how to bridge the state's budget gap.

State experts will be on hand to show how Alaska is spending more than it is taking in. The state lived off its oil income in the 1970s and '80s, but dipped into its savings in the '90s. The state's biggest savings account, the $3 billion Constitutional Budget Reserve, is expected to run dry about 2005 -- without some changes. In other words, "D-Day" has arrived.

Unfortunately, people have heard that before and may not take the situation as seriously as they should. Alaska was spared drastic measures because the price of oil rose to record heights and the the state settled several oil-industry lawsuits that added to the savings account.

If the state is to avoid financial ruin, Alaskans need to realize the budget gap is real and not some conspiracy designed by a bloated state government. Changes need to be made. It's unlikely those changes will be without lots of pain and suffering. It's unlikely those changes will please everyone.

That's why it's important for as many Alaskans as possible to be part of the solution. Tuesday's town meeting offers that opportunity. It also offers the opportunity to be informed about the problem. Too many Alaskans minimize the state's financial problems with such pat answers as "cut the budget" and "whatever you do, don't touch my dividend." If it were that easy, it would have been done a long time ago.

Most legislators agree that Alaska can't cut its way out of this financial crunch. It needs new sources of revenue if Alaskans are going to live in the style to which they have grown accustomed. That means new taxes. Possibilities include an income tax, a statewide sales tax, an employment tax, an increase in motor vehicle fuel taxes, and an increase in taxes on the oil industry, cruise ship passengers, marine fuels and alcohol -- or some combination of the above.

New revenue also would be realized by capping Alaskans' permanent fund dividend checks. A cap of $1,000 would make available about $565 million a year; $1,500, $270 million; $1,750, $125 million. Although Alaskans are due to receive dividend checks of $1,850.28 this month, the dividends have averaged only $974 over the life of the program.

If Alaskans are serious about leaner state government, then they need to offer specific suggestions on what they want cut.

The best way to improve the state's financial outlook is a combination of tough choices. The sooner those choices are made, the less painful they will be.

During the legislative session, lawmakers promised they would seek Alaskans' ideas about what should be done. If all goes well, they will incorporate those ideas into a long-range fiscal plan, which will be approved next year.

It's imperative the state get its financial house in order while there are still options. Tuesday night is an opportunity to help solve the state's most pressing problem. Alaskans have two immediate choices: They can sit back and criticize those trying to come up with answers, or they can be part of the solution. We hope central peninsula residents will choose the latter.



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