News that Alaska's budget crisis gets deeper with the latest downturn in the oil markets was as predictable as the change of the seasons. What state leaders planned would be a $474 million deficit this year now looks more like $750 million. This doesn't change the fundamental problem -- it just turns up the heat.
We're not short of money. We have $25 billion in the Alaska Permanent Fund and another $2.8 billion in the Constitutional Budget Reserve. With Permanent Fund dividends we give away more than $1 billion per year. We Alaskans pay virtually no general taxes, but we get substantial state services. And in all but two years of the last 10, we've gone in the hole. If you wanted to guarantee that we'll have to strip the Permanent Fund or the dividend in five or six years -- because the alternatives are worse -- you'd just keep on doing what we've been doing.
The reason we're able to keep spending more than we take in is that our leaders keep using up the CBR rather than fix the problem. When the CBR runs out, we'll hit a hard fiscal wall -- and we'll have used up 10 percent of our assets. Does this make sense? Only to people who live by the election cycle.
But not to all of them. The bipartisan Fiscal Policy Caucus continues to press the issue. They're looking at all the available options -- taxes, spending cuts, Permanent Fund earnings, even upping the ante on the oil industry. None of these things is as bad, long term, as the current stalemate, especially if they're combined into a balanced package where the burden is spread around. ''Everybody has got to help solve the problem,'' said Rep. John Davies, D-Fairbanks. ''We're going to spread the pain around.''
Figuring out how is the burden of leadership in the next four years. If the leaders can't figure it out, we're all going to pay a big price later.
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