The much-vaunted fiscal gap on which some political careers are based may just be going away. Its demise has become at least a possibility.
The leadership of Alaska's new Senate says new projections of oil revenues could close the estimated $1.2 billion gap between state spending and available cash by 40-50 percent.
Since the state could raise another $625 million by converting the permanent fund to an endowment, the Murkowski administration may find it easy to fill the gap.
Raising the $625 million would require taking 5 percent of the permanent fund's total value each year and splitting the money between state expenses and dividends. But that could be done without reducing the total value of the fund or reducing dividends from their current projected levels.
Such a change would require a constitutional amendment that would have to go before the voters, but voting it down would almost certainly mean something much worse -- like bringing back the income tax. Such a prospect would give the amendment an excellent chance for passage.
Putting the fiscal gap to rest would allow the public to adopt a whole new attitude toward what a state can and cannot do, like begin to meet some of its most critical needs and build for the future. It would also be a signal to the business community that investments in Alaska make sense and won't be at high risk of profit-chomping taxes when the gap becomes intolerable.
The demise of the fiscal gap would be a sad affair for those who have won votes by flogging the economy and Alaska's tax system. But it would be a cause for joy to the rest of us.
-- Voice of the (Anchorage) Times
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