Voices

History repeating itself: Metal gods walk the earth and Alaska faces fiscal crisis

On Friday night inside the Alaska Airlines Center, Mötley Crüe turned me into a 13-year old again. Standing in an arena that has been used as a prime example of excessive state spending in the face of impending fiscal crisis, for two hours of my life, none of that drama mattered. It was the late '80s again, and all that mattered was Nikki Sixx, Mick Mars, Vince Neil, Tommy Lee and the glam rock of my youth.

As I walked out of the sparkling new arena, the old transposed with the new. Alaska is again facing a fiscal crisis, and change is going to have to come. Ironic that this is what was in my mind as I listened to one of my favorite band of the '80s in a brand new arena.

This story has been told many times in Alaska's history. Our Legislature has a horrible history of not planning ahead and then blaming the other guy for the lack of planning. House Speaker Mike Chenault, the longest-serving speaker in Alaska's history, is the poster boy for that maneuver. The House is supposed to control the state's purse strings, however, Chenault spent the last legislative session standing in front of cameras asking Gov. Bill Walker what he is going to do about it, even though Walker had been in office for just a few months.

The real problem isn't Chenault or Walker, and certainly not Nikki Sixx -- and it's not even the multibillion-dollar budget gap. It's our history. Alaska's leaders have traditionally lived year-to-year and flown by the seat of their pants.

Part of the reason this has become the norm is because we fund government with oil revenue. The amount that comes into the state coffers will vary every year based on a number of different factors, including the price per barrel. And that's not anywhere near as stable as the variety of revenue sources that most states have, that allow them to have multiyear budgets.

Alaska keeps living this "paycheck to paycheck" lifestyle because life has been good. Oil prices were high, and when they weren't, they were high enough to sustain our spending, even though it was clearly becoming more and more out of control. For the last 10 years, the state House and executive branch were dominated by Republicans, but spending continued to increase year after year. That brings us to where we are now, trying to figure out how to cut our way out of a $4 billion hole.

However, just like any society that ignores the ills of out-of-control spending until it's too late, Alaska is approaching the zero hour when it comes to our budget. Even now, when we are facing a seemingly impossible budget gap, the Legislature and Gov. Walker both punted this year, and spent savings instead of making the difficult choices needed to lead Alaska into the future.

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All is not lost. The future does not have to be all gloom and doom. However, in order to change the course of the future away from the mistakes of the path, our leaders are going to have to abandon the habits they have formed over decades and decades of repetition and start to think in more dynamic and innovative ways.

There are some pretty inventive things Alaska can do, given our unique position with the money sitting in the Permanent Fund and the Constitutional Budget Reserve. Most states that are in this tough position do not have a bank account with billions of dollars to use in order to generate revenue for state government.

The Permanent Fund was created just for this. It is Alaska's rainy day fund, and there can be no question that it is raining. Nobody is talking about depleting the principal of the fund, and anybody who did would be a fool. There is no need or desire to do such a thing. What we can do is use it to earn new revenue in ways similar to how the dividend program works today.

Former Gov. Frank Murkowski floated this idea most recently in a commentary advocating a Percentage of Market Value (POMV) plan like the one proposed in 2004. He said that plan would have made (at the time) about $5 billion total available for school spending and for dividends. Today, with a much larger Permanent Fund, the number would be bigger, and there are different ways to manipulate the system and to cap dividends in order to make that government portion larger or smaller. Even if the POMV plan isn't the answer, it's evidence that there are innovative ideas that we can examine, that, so far, our political leaders refuse to discuss.

Regardless of what we do, Alaska is changing and our leaders need to learn to change with it. Our needs and wants as residents of Alaska are much more complex and our strategies for funding the state need to be as well.

Mike Dingman is a fifth-generation Alaskan born and raised in Anchorage. He is a former UAA student body president and has worked, studied and volunteered in Alaska politics since the late '90s. Email him at michaeldingman(at)gmail.com.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.

Mike Dingman

Mike Dingman is a fifth-generation Alaskan born and raised in Anchorage. He is a former UAA student body president and has worked, studied and volunteered in Alaska politics since the late '90s.

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