Anchorage Daily News

Alaska is not poor; it is the richest state in the country, in cash reserves and in prospects. For years, Alaskans have been regularly advised by their pundits that they are poor and that a day of reckoning looms. Our nonrenewable natural resources will some day (soon) be exhausted, they say, and we shall then rely on income from giant, reserve funds built from current income, from which we will draw to sustain government.

While years ago public sector poverty may have been a plausible premise, it is no longer sustainable. We should have stayed with the mantra used to argue for statehood, that Alaska is a "vast, untapped warehouse of resources."

We do have fiscal problems.

• First, we have failed to cultivate an economy that raises reasonable internal revenue. As a consequence when economic growth increases the funding requirements of government, our resource wealth must be split more ways. The primary beneficiaries of the current fiscal "plan" are the largest, most profitable companies that normally carry most of the tax burden and now get a free ride. In fiscal matters we should try to look more like a normal, responsible state instead of the spoiled brats of the nation.

• Second, the idea that Alaska's government should later be financed by a giant savings account is also flawed. We should work toward a state where basic services are paid for by taxes. The Permanent Fund was the default solution to fear of runaway spending on recklessly selected purposes.

• Third, as a consequence of the punditry of poverty, Alaskans have never focused on the special purpose potential of a resource-rich government. We added to the Permanent Fund an equal, taxable dividend for all, but we have not seriously considered other, nontaxable distributions such as health and education. We should.

• Fourth, purpose -- what George H. W. Bush referred to as "the vision thing," -- where do we find it? The Alaska constitutional fathers suggested purposes in the preamble: "... to secure and transmit to succeeding generations our heritage of political, civil and religious liberty. ..." Other sections refer to duties in health, education and general welfare.

Maybe it takes more grit than money to secure our heritage of liberty, but if we are to "transmit to succeeding generations," we need to do more for education than we do now. Why is Alaska not the No. 1 state in education from infancy to grave? Those whose concern is sustainable growth should study examples to the south. Wherever a vibrant economy flourishes, a great university is at its center. The greatest economic surge of the last century was generated through the WWII G.I. Bill which sent millions of veterans to college.

• Fifth, among our liberties is the right to equal treatment by our government. The state budget is rife with unequal treatment. We have strayed far from the constitutional mandate that the Legislature should serve state purposes with entitlements defined through general legislation. Because the courts said equal funding of educational opportunity was a constitutional requirement, the K-12 education operating budget is, relatively, a model of equal treatment.

• Sixth, we have short-changed the role that local government should play in directing public spending. Whatever the purpose, appropriations for local purposes are best distributed through local revenue sharing, distributed per capita, but acknowledging differences in cost of living and economic distress, with localities making the choices. The locality should decide whether it wants a playing field or a youth center. If the state wants to pick the purpose, dedicating a percentage of the whole education budget to sports for example, is OK, but it should not chose particular schools for specific playthings.

• Seventh, stop earmarking and don't appropriate money to private organizations. The Legislature should fund government agencies that administer prioritized, accountable, public purposes through grant and contract.

Regrettably there is little political will supporting movement toward a self-sustaining economy, but the national uproar over earmarking might remind Alaskans to bring that lesson home. Our government should treat Alaskans equally. Earmarking is almost always a violation of that principal.

John Havelock is a former Alaska attorney general. He lives in Anchorage.

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