Our view: Could be worse

While the national economic storm has definitely hit Alaska, we've been spared the epidemic of home foreclosures and plant closings seen in many other parts of the country.

Alaska's state treasury has $8 billion in ready reserves and the Permanent Fund has rebounded to $35 billion. We do not have to lay off state troopers and prison guards or close state parks. Lawmakers will be able to add money to K-12 schools this year, while other states have to slash their education budgets.

We take for granted that we still don't have to pay any state sales tax or personal income tax. Last year, each of us Alaskans got a check for $1,305 just for being smart enough to live here. This year's payout should be similar.

Unlike other states, Alaska does have money to invest in making life better for us all and Governor Parnell pitched legislators on some smart ways to do it.

Students who work hard and get good grades would qualify for merit-based college scholarships or vocational training. The state would ramp up efforts to heal the social ills of domestic violence and sexual assault. Aging state buildings and facilities would get fixed up, thanks to the governor's deferred-maintenance proposal, which would also be a speedy way to create jobs this summer.

Funding a new state crime lab will help catch and convict more bad guys. A new science building at the university in Fairbanks will help add some more brain work to the state's economy.

As Governor Parnell noted, Alaska does face challenges. The economic downturn has hit harder at the local level, as in Anchorage, where tight times are forcing painful cutbacks in city services and school classrooms.

State government still runs almost exclusively on money from oil production. Alaska is blessed that oil prices quadrupled while production fell to a third of past levels. That price rise has more than offset the money lost to lower oil output for last year. However, with lower production likely in the future and oil prices always uncertain, future state revenues are on shaky ground. This is why the governor has offered additional tax credits as an incentive for more production in Alaska. Both the state and the oil industry will benefit from the right balance of taxes and incentives -- one that provides a sufficiently attractive investment climate for industry but also reaps tangible benefits for all Alaskans.

Meanwhile, those same high energy prices take a heavy toll on most Alaskans' pocketbooks, especially in the Bush. Preliminary work on a North Slope gas line is moving along but it's still a long way from a sure thing. The companies holding the gas want a guaranteed limit on the state taxes the producers would pay and the state wants more flexibility. At the right time, with the governor's leadership, the producers and the state should be able to work out a reasonable tax regime to make the dream a reality.

In his speech, Governor Parnell blasted the feds, a favorite theme of Alaska politicians. It's a sure crowd-pleaser, even though federal spending drives one-third of our economy.

Governor Parnell mentioned the devastation in Haiti, which was a humbling reminder for Alaskans of how good we have it. While we rightly expect our leaders to work on bringing opportunity to more Alaskans -- and there's a lot they can do on that score -- we can also be thankful for living in relative safety and prosperity.

BOTTOM LINE: The state of the state? There's room to improve, as always, but we're doing better than most.