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Our future is too bright for 'put Alaska out to pasture' fiscal plans

  • Author: Pat Galvin
  • Updated: June 29, 2016
  • Published June 7, 2015

There are two visions of Alaska's future vying for public support. One is based on pessimism of Alaska's revenue future and our ability to muster the political will to access alternatives. The other believes that now is the time for Alaska to fully flex its financial muscles and lift itself to new heights. I reject the first approach as debilitating and a self-fulfilling path to a dreary future. I do not believe that now is a time to narrow our options, reign in our expectations, or stifle our children's future. Instead, we must face our future with optimism and courage. We have the opportunity to do great things; we just need to summon the will. Like Alaska's founding generation, we have to take risks, invest in ourselves and have faith in our ability to be successful.

Bumper sticker rhetoric does not solve problems. "Alaska needs to learn to live within its means." This phrase has probably been the most overused, and least understood, of the past year. Such a philosophy makes sense for a family on a fixed income, but it would be potentially debilitating for a business with an opportunity for growth. Where does that put Alaska? Our state government is more like a business than any other state in the country. Alaska has a wealth of resources that must be wisely, safely and courageously developed and conserved; and it must be done together by all Alaskans through our elected leaders. And when they don't seem to know what to do, we must get together and show them the way.

"We are facing a fiscal tsunami." Another troubling phrase of the day that is also a matter of perspective. What looks like a tsunami from the beach is only a rising tide when you're out on the water. In the same way, the current general fund deficit is only a crisis when you ignore all the reserves available to the state to meet its current needs and the revenue potential in future years. If a comprehensive fiscal program were in place today, our current low oil price environment would be merely a concern and not a tsunami. As Gov. Walker and others have pointed out, today's budget "crisis" is not a lack of wealth for Alaska; it is simply a cash flow problem.

I can appreciate that the pipeline generation of Alaskans would see the current state of affairs and conclude that the glory days are past. But again that is only a matter of perspective. I am troubled by some of the proposals I've seen to "solve" the fiscal crisis. I consider most of these to be in the category of "Put Alaska Out to Pasture" plans. Drastic cuts to education, a nearly nonexistent capital budget, breaching contracts with public employees, and the list goes on and on with no end in sight. The operating mindset is, "Alaska had a good ride, but now it's over." Hogwash!

Alaska's future is as bright today as it has ever been. There are still tremendous amounts of oil (and gas) on the North Slope, in Cook Inlet and elsewhere in the state. For the past decade, our oil and gas policies have been designed to foster exploration and new discoveries, and they're just starting to pay off. We have mineral potential that would make entire countries envious. We have a sustainable seafood industry, and the most beautiful product for any tourism business to market. Our human resources, our children, will one day power our economy, so long as they have a properly funded education system. In conjunction with that, we have opportunities to create new industries with emerging technologies in telecommunications, information management, or who knows what. And to top it all off, we survey all these opportunities while resting on nearly the largest accumulation of reserves the state has known. We have options to shape our future that previous generations could never have dreamed of.

To take advantage of Alaska's wealth of opportunities, we need to invest in ourselves. Not only when oil revenues are high, but also in low times when we must take advantage of our reserves and revenue options to create a stable spending plan that keeps us moving forward.

I looked forward to joining Gov. Walker in Fairbanks this weekend for "Building a Sustainable Future: Conversations With Alaskans." I hope all Alaskans will eventually join the "conversation" and then support a fiscal plan that puts all our tools to work, and allows Alaska to grow into a bright future.

Pat Galvin was Alaska Commissioner of Revenue from 2006-2010, and is currently an executive with a North Slope oil exploration company.

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.

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