As seen in the Alaska Dispatch News, written by Former Lieutenant Governors Fran Ulmer and Mead Treadwell
We have a $4 billion deficit, and Alaska’s government is dependent on one source of revenue: oil, which has dropped in value and quantity. Even if we eliminate every state agency in Alaska, we can't close the budget gap. Only unpopular choices face the Legislature, and putting off hard decisions merely makes the problem much worse.
As former lieutenant governors representing both political parties, we remain actively engaged in public policy. Last week, we joined a gathering of former governors and lieutenant governors of both parties to discuss the crisis. Now, as in years past -- some of us ran in elections opposed to each other -- there were differences of opinion. But we’ve been involved in Alaska long enough to know we can’t give up when times are tough, and we agreed Alaskans must act now. Our conclusions are summed up in six key points we want to share with the public -- and with our leaders -- as we all struggle with the budget deficit:
1) We do not have enough revenue to pay for the government we currently have. We have to make some significant changes in how we do business.
2) We need a combination of cuts and new revenues.
3) The Permanent Fund was created to help pay for essential state services when oil declined.
4) Everybody benefits from state services and everybody should help pay for them. It is important for people to help pay for governments so they are connected to how government funds are spent.
5) We can protect the Permanent Fund dividend for the long term if we commit to use a share of Permanent Fund earnings to make a significant reduction in the deficit.
6) Making decisions today to adopt a sustainable, balanced budget is essential. The longer we wait, the fewer options we have.
Action this year will help us maintain our savings accounts and maximize income from them for the long term. A stopgap, one-year solution is not an option. We need structural changes in how we fund the government we need. That means both cuts and new revenue sources, and we hope the Legislature works through the options this session to establish more sustainable funding for government services we depend on now and in the future.
Many parts of Alaska’s economy are doing well, despite low energy and commodity prices. To keep jobs here, we must ensure Alaska’s economy is still a good place to invest. We must avoid a deep recession. If you missed the last one in the mid-1980s, here’s what it looks like: Alaskans lose their jobs and their homes. Property values plummet. Businesses fail, and people move away.
In our discussions with legislators last week, we found no lack of awareness of the problem. But we did hear a lack of public support for making the tough choices. If the Legislature kicks the can down the road until after the next election, the choices -- and the costs to the economy -- will be even tougher. That’s why so many Alaska business and community leaders agree that we can’t afford to wait or take a cuts-only approach. Only a strategy that combines reducing spending and adopting new revenue sources will save us from losing our savings, foreclosing our capability to build and maintain roads, ports, public safety and schools. Failure to act will send our bond rating into the basement.
For your sake, for your neighbors’ sake, for your children’s sake, please urge your legislators to act this session. Later, in the same bipartisan spirit of our meeting last week, we hope we can thank them for taking action.
Fran Ulmer, a Democrat, served as lieutenant governor from 1994-2002. Mead Treadwell, a Republican, served from 2010-2014. Additional authors of the six consensus points listed above were former Democratic governors Bill Sheffield (1982-1986), Tony Knowles (1994-2002), Republican Frank Murkowski (2002-2006), and lieutenant governors Steven McAlpine (1982-1990), a Democrat, and Loren Leman (2002-2006), a Republican.
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