Despite oil prices, Alaska still needs sound fiscal plan

Posted: Sunday, November 26, 2000

A mild heart attack gives a 40-something man a strong warning he needs to develop healthier habits -- or suffer the consequences.

The rattle under the hood of the car doesn't keep the car from starting every morning -- at least not right away.

Masking the symptoms of a cold doesn't get rid of the cold -- it just makes it easier to endure it.

There are dozens of analogies which could be used to describe the state of Alaska's financial affairs.

The immediate emergency is over, primarily because a lot of the symptoms of the emergency have disappeared.

The price of North Slope crude is around $34 a barrel, up from record lows of $9 a barrel just two short years ago. Every Alaskan recently pocketed close to $2,000, courtesy of the permanent fund dividend program. A new crop of state legislators is ready to whip the state into financial shape.

At least, that's the hope.

The fear is since the immediate emergency is over legislators will find other ways to spend their time in Juneau.

That would be unwise -- and grossly unfair to the Alaskans who put them in office.

Alaska may have limped through its most recent financial emergency with hardly a scar, but the crisis isn't over. And, if you listen close enough, you can still hear the ominous rattling under the hood.

During the oil bust of the 1980s, Alaskans wistfully promised on bumper stickers that sprouted across the state that if they were ever given another Prudhoe Bay they wouldn't waste it.

The state hasn't been given another Prudhoe Bay, but it has been given some valuable time with the current high price of oil to develop a long-range fiscal plan without being under the gun.

It should take every advantage of the opportunity.

In fact, Alaskans should insist upon it.

Without exception, legislators recently elected to represent the Kenai Peninsula in Juneau talked about the importance of a long-range fiscal plan.

Before the state can do anything else, it needs such a plan. How Alaska funds education, how it allows the university system to grow and develop, how it attracts new business and industry, how it maintains its roads, all depend on a long-range financial plan.

That long-range plan must take into account the highs and lows of oil prices and the decline of oil production. It must consider new revenue streams; Alaskans can't just hope another Prudhoe Bay into existence. New taxes, new user fees, more efficient government all should be part of the discussion.

Alaskans currently seem unwilling to use permanent fund earnings to help pay for the cost of government, but the permanent fund nevertheless is an important ingredient to any long-range financial plan. The Save Your Dividend Organization, for example, is leading a statewide effort to ensure dividends are protected for future generations.

Just as the initiative to protect the dividend program is coming from Alaskans, the initiative to have a long-range fiscal plan should come from Alaskans.

It's the only way the state will solve its money crisis. Unless Alaskans let legislators know they are unwilling for the state to continue limping along without a plan, the state will continue to limp along -- until oil prices dip again and lawmakers are forced to do something.

Formulating a plan when the state's back is against the wall won't lead to the best decisions, however. Now, while there's time to develop a thoughtful plan for Alaska's future is when it should be done.

The fact that Alaska's permanent fund and dividend programs exist shows that state officials are capable of long-range planning. Now, the state needs to take that planning to the next level. How can Alaska use its wealth in such a way as to have an educational system from kindergarten through the university level, a road system, a public safety system that are the envy of the rest of the country?

For too long and despite billions in the bank, Alaska has taken the attitude of being a pauper. The state needs to shake its "poor me" attitude and instead find the best way to use its wealth of resources for the good of current and future Alaskans.

The worst thing Alaskans can do is nothing -- and allow the legislators they elected to do the same.



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