The decisions that our governor and legislators will make this legislative session in response to the current fiscal situation will impact the life of each and every Alaskan in ways yet to be fathomed. Every Alaskan must engage in the process to ensure that Alaska remains a great place to work, live and raise our families.
What could happen in Juneau to impact our ordinary lives so much that we should pay attention to the current legislative session? First, if a balanced, sustainable budget plan is not developed during this or the next legislative session, the Permanent Fund dividend, as we know it, could end. Second, there most likely will be taxes in Alaska, but we don't know yet what form they will take. Third, although Alaska avoided a recession in 2008, there could be a recession in our future if the wrong decisions or no decisions are made.
Here is what each and every Alaskan needs to do to help our legislators in Juneau make the right decisions for the state budget and for all of Alaska:
1. Demand a balanced, sustainable budget: State revenues and expenses must be balanced and predictable so local lawmakers can create dependable budgets for our cities and boroughs. State budget cuts are to be expected, but there are two things to remember: First, budget cuts that shift state obligations to Alaska cities and boroughs are not really budget cuts; those become burdens on local governments, which are passed on to citizens as local taxes. Second, budget cuts alone will not balance or create a sustainable state budget. Local governments know the era of large revenue sharing from the state is over. Local governments also know that to develop a balanced, sustainable budget, we must face the fact that increasing or implementing new taxes will be on the table; local governments and citizens should be part of that conversation.
2. Agree to cap the Permanent Fund dividend instead of losing the dividend: If Alaskans want a dividend in the future, there must be a cap on the payout with the portion of the funds used to support the balanced, sustainable state budget. If Alaskans and Alaska legislators do not create a plan in this legislative session or the next, it is fairly clear the Permanent Fund dividend will be history. Granted, it is certainly a difficult conversation to have because the dividend is such an important part of life in Alaska. The state Legislature must take action to preserve this treasure. We do not want to wait until our reserves are so depleted that the Permanent Fund dividend cannot in any form be saved.
3. Maintain some funding for capital projects to avoid recession: The Legislature must maintain some capital project funding to keep construction workers, construction companies, suppliers, architects and builders in Alaska. An abrupt end to state capital projects could cause these businesses and industries and their families to leave Alaska and spiral Alaska into recession. Remember, following the nationwide 2008 recession, the federal government maintained capital projects to soften and temper its effects. The state of Alaska must lead the way and provide the cushion against recession throughout the state by funding certain capital projects.
That's it -- three steps that we need to ask our state legislators to do for us. Please take a moment out of your ordinary, everyday life to help preserve the wonderful legacies we have created in Alaska -- the most beautiful state in the country -- rich with independent, resourceful citizens who can acknowledge and address the state's current and future fiscal challenges.
Ernie Hall is a board member of the Alaska Municipal League, chair of the AML Sustainable Budget Committee and member of the Anchorage Assembly. The municipal league is a voluntary, nonprofit, nonpartisan statewide organization of 164 cities, boroughs and unified municipalities, home to over 97 percent of Alaska's residents.
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