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Ignoring Alaska’s budget crisis doesn’t make it go away

  • Author: Anchorage Daily News editorial board
    | Opinion
  • Updated: April 17
  • Published April 17

The Alaska and national flags fly at half-mast on Tuesday, April 6, 2021 in front of the Alaska State Capitol in Juneau. (James Brooks / ADN)

There’s a saying in politics that goes, “Don’t tell me what you value — show me your budget, and I’ll tell you what you value.” By that standard, it’s hard to tell what the Legislature values. And it’s harder still to tell what legislators’ plan is for addressing the state’s long-term fiscal crisis, which has now stretched on for more than half a decade with no visible progress made toward a real solution. With the 90-day mark about to pass, legislators show every indication they will continue to deplete the state’s savings to avoid the hard budget choices Alaskans elected them to make.

It was always a long shot that the Legislature would make a breakthrough on a long-term fiscal plan this year, after voters sent a sharply divided group to Juneau. In addition to the usual Republican-Democrat divide, the 2020 election deepened a schism within the Alaska GOP, with hardliners from the Mat-Su, Kenai and the Interior refusing to join a caucus that would require them to vote with the party’s more moderate Anchorage-area legislators on budget issues. As a result, it’s been extremely difficult for a majority of legislators to get on the same page on yearly budgetary matters, to say nothing of a longer-term solution that would provide stability in future years.

So what have legislators been doing while not making progress toward addressing Alaska’s deficit? Mostly playing to the voters who sent them — or to their own biases — with red-meat bills that are unlikely to become law. Despite Alaska’s 2020 election being conducted “fairly and without any trace of fraud,” as Republican Lt. Gov. Kevin Meyer said, Wasilla Sen. Mike Shower has pushed forward with a bill that would make wholesale changes to the state’s election system — only to walk many of those changes back after widespread outcry about the potential for the bill to disenfranchise many voters. And Sen. Lora Reinbold has turned the Judiciary Committee she chairs into a pseudoscience circus, hosting controversial speakers who espouse debunked theories about how best to combat the COVID-19 pandemic. Reinbold has also used her office to further a personal feud with Alaska Airlines over its policy to require masks on its planes, authoring a bill of dubious constitutionality that would allow the state to nullify federal laws and policies it doesn’t agree with.

At this point, many legislators appear largely willing to kick the can down the road for another year by spending out of the Permanent Fund’s earnings, endangering the prospect of future dividend checks — or at least to shovel a substantial portion of incoming federal COVID-19 relief funds into the budget hole and thus convince themselves they’ve done their jobs. Either way, a sustainable fix looks as far off as it’s ever been. It looks like the magic money from Washington, D.C., will act as this year’s Get-Out-Of-Juneau-Free card.

The great shame of all this wasted time is that when it comes to righting the state’s finances, Alaska doesn’t have any time to waste. Nearly all of the state’s $16 billion in its budget reserves has been spent in the past half-decade as legislators on all sides are either unwilling or unable to make the tough stands necessary on spending and revenues. As a result, the only big account left is the portion of the Permanent Fund that’s not constitutionally protected, and most legislators look happy to soon spend that down too. Once it’s gone, there are no accounts of substantial size left, and dividends will be minimal — if they exist at all.

And yet there are alternatives, if legislators were brave enough to debate them. Rep. Jonathan Kreiss-Tomkins of Sitka has authored legislation that would move $4.35 billion of the Permanent Fund’s earnings into its constitutionally protected principal, recognizing that legislators will never be mature enough to resist the temptation to monkey with the PFD, use it as a bargaining chip or hold other policy items hostage with it. Kreiss-Tomkins’ proposal would also add a revenue split for dividends and state services to the Alaska Constitution, removing it from the Legislature’s annual political horse-trading. In the Senate, Sitka Sen. Bert Stedman has led the charge to remove the issue from legislators’ hands, shifting billions of dollars into the protected principal last year and arguing that even more should be protected.

The Legislature has demonstrated the utter futility of letting the determination of the PFD be a yearly slugfest, subject to campaign promises and political considerations. It’s time to take that bargaining chip away — but will legislators willingly do what’s right for the state by locking the safe for future generations and giving up the power to use the fund as a political cudgel? Only if Alaskans stand up and demand it.