Pulling together will move Alaska forward

Alaskans lose when elected officials don’t pull together. That doesn’t mean they can’t or shouldn’t disagree, but when faced with structural and significant challenges they are asked to work together to find negotiated solutions.

Recently, Alaska experienced a roughly two-week period where we saw the failure of a significant vote to fund important programs using the Constitutional Budget Reserve, and that same vote fail to reverse the sweep of many funds that supported state services. Days later, the threat of a government shutdown shifted attention from that outcome, to concern for the potential on this new front. A fresh vote and a budget passed in time came immediately afterward with a series of vetoes.

We’re months away, maybe, from fully understanding the impact of that series of decisions. We know, though, that many Alaskans could see a doubling of their electricity bills, the university has to cover the state’s scholarship commitments, and local governments might have to go back to taxpayers and residents to make up the difference for the state’s budget shortfall.

At the very least, these actions create uncertainty and challenge, and feel callous and unnecessary on the heels of a global pandemic and economic crisis that many are still recovering from. The much-needed federal relief that is flowing brought hope that was quickly dashed by decisions made by elected officials responsible for stewardship. Some communities are thrust back into crisis mode, just when all Alaska should be bouncing back.

The search for a sustainable fiscal plan has been active since at least 2015, and in the background for decades. Elected officials over the years have used savings and budget reductions to create a glide path that has moved Alaska to some of its lowest spending in decades. The Permanent Fund continues to perform well, and the sustainable draw that’s been implemented funds much of state government. The revenue shortfall facing Alaska is solvable.

The governor’s 50-50 proposal recognizes the necessity to change the current statutory Permanent Fund dividend formula. Additionally, its inclusion of long-term protection of power cost equalization is good not just for rural Alaska but the entire state. These are steps in the right direction. The Legislature has in place a fiscal working group. Legislative leadership have spoken convincingly about the need for a comprehensive package of solutions, even as many of the pieces of legislation necessary are out there. There are some revenue bills, though there could be others introduced; there are a couple approaches to a spending cap; multiple bills deal with changes to the PFD either in statute or the constitution. We’ve got many of the bits and pieces necessary to respond appropriately to a significant structural challenge.

Now is the time to pull together. I’m pretty sure that’s how sled dogs do it. No individual can pull before the others, or alone. Instead, it will take all elected officials pulling together — working together to bring a fiscal package that includes all the pieces important for Alaska’s path to prosperity.

Important to a fiscal package will be to not trade long-term consequences for short-term needs. There are critical needs that were defunded by the CBR vote and lack of a reverse sweep. Not least of these are the PFD and PCE. It could very well be that some of the vetoes reflect that outcome. Lawmakers can pull together to address the gaps in this year’s budget.

Separately, Alaska’s elected officials can pull together toward longer term sustainability. Lawmakers can pull together to craft well-designed approaches to increased or new revenues, a spending cap and sustain the Permanent Fund and PFD through some form of the percent-of-market-value structure.

Pulling together will take negotiation, communication, and compromise. Pulling together will mean putting away the animosity that has built up over these past few years. Pulling together will focus on changes that can be made now, for a durable goal that pushes crisis and urgency out enough that Alaska can stabilize itself. There is no promise of perfection or a forever solution and pulling together will mean recognizing that future challenges will be addressed by future leaders. Finally, pulling together will mean working with partners, at a table with space for them to be part of the solution.

Nils Andreassen is the executive director of the Alaska Municipal League, which is dedicated to supporting and strengthening Alaska’s local governments. AML has a position in support of a sustainable fiscal plan, recognizing the interdependence between the state and its cities and boroughs.

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