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Gov. Walker says Fairbanks conference aims to spark dialogue, not make sales pitch

  • Author: Nathaniel Herz
  • Updated: September 28, 2016
  • Published June 4, 2015

The problem is straightforward: The government of Alaska plans to spend $5 billion this year while earning just $2 billion in traditional revenue after a plunge in the price of oil.

There's $10 billion in savings -- enough to pay the state's bills through 2018. But across the political spectrum, few people deny that Alaska's government, and how it's funded, will require substantial, even radical changes for the state to stay solvent.

This weekend, Gov. Bill Walker is convening 160 people at the University of Alaska Fairbanks for a focused discussion about paring state government and finding more money to pay for it -- whether that money comes from taxes or the Alaska Permanent Fund.

Don't call the meeting a conference though, Walker says.

"A conference is where you go and listen to presenters and lecturers. This is a conversation," Walker said in a phone interview this week. "It's more starting off: What kind of an Alaska do we want?"

The event conjures memories of a similar gathering hosted by former Gov. Frank Murkowski in 2004, the "Conference of Alaskans." But that meeting had a narrower focus on a single question: whether it was time to use part of the Permanent Fund to pay for government.

Ultimately, a run-up in oil prices rendered that question moot then. This time around, though, the problem appears to be intractable.

"The state's deficit is far greater now, as a percentage of the budget, and the structural issues are more severe than they were 10 years ago," said Brian Rogers, the Fairbanks university chancellor, who will act as a master of ceremonies this weekend and was a facilitator for Murkowski's conference in 2004.

The discussions will feature 110 members of the transition team Walker formed after he was elected last year, plus 50 other Alaskans who were invited to participate.

Fourteen state agency commissioners and 14 legislators will also attend as observers.

The meetings will be webcast, and participants are being asked to take what they learn back to their home communities for further discussion.

"We're not there trying to sell a product," Walker said. "It's really to start a dialogue."

Ultimately, though, the meetings mark the start of an effort to build a consensus on what will almost certainly be politically unpleasant decisions for Walker and the Alaska Legislature.

The t-word

Lawmakers this year cut hundreds of millions of dollars from the state's $4 billion agency operating budget -- cuts that some lawmakers said went too far in some areas, but others said weren't enough. One task for participants is to scrutinize the size of state government and the services it offers.

But fiscal experts say that the state can't balance its budget strictly by cutting. That leaves what the Walker administration refers to as "revenue options," which will also be up for discussion this weekend.

Those options include the t-word -- taxes -- which aren't specifically mentioned on Walker's press release announcing the conference, or its agenda. Then, there's $7 billion in the earnings reserve account of the Alaska Permanent Fund available by a simple majority vote of the Legislature.

That's the account, however, that funds residents' annual dividend checks. The Permanent Fund is known as the third rail of state politics, with citizens overwhelmingly rejecting the use of the earnings account to fund government, 83 percent to 17 percent, in a 1999 advisory vote.

Walker said he nonetheless recognizes that the state can't close its budget gap solely by cutting costs. And he's prepared to push legislation based on the conversations that start at the Fairbanks conference.

"It won't be a particularly politically popular thing to do," Walker said. But he added: "I'm very comfortable taking that position, because I have to do it. We don't have an option at all."

Participants will hear opening remarks from Walker and Lt. Gov. Byron Mallott on Friday evening, then an overview of Alaska's "fiscal facts and choices" from a university economist, according to the conference schedule.

On Saturday, attendees will scrutinize government services and assign a value to each one, then examine ways for the state to generate revenue.

Sunday's schedule includes more discussion of revenue and a session on "closing the fiscal gap," and concludes with a "call to action" and remarks by Walker and Mallott.

Two participants said they were looking forward to the conference and were going without any strong views about the right fix for the state's fiscal problems.

"I'm not going in with any prescribed solutions to things," said Bob Williams, a teacher from the Matanuska-Susitna Borough who ran as a Democratic candidate for lieutenant governor last year and co-chaired Walker's education transition committee. But, Williams added: "We have to make adjustments."

Williams said he hoped the conference would ultimately lead to a plan that preserves the quality of the state's education system.

"It's very important to me that the students I'm teaching get the same quality of education as students I've been teaching the last 10 years," Williams said. "As I did."

Another participant, Emily Ferry, said she thought the state was "overdue for a serious conversation about what we want Alaska to look like, and how we're going to sustain that."

Ferry is an organizer with the education advocacy group Great Alaska Schools, as well as with the Southeast Alaska Conservation Council.

She said in a phone interview that she was curious to hear about the options available to the state to generate more revenue, but she's inclined to support an income tax.

"If you are paying for a service, you demand more accountability," said Ferry, who has scrutinized and criticized some spending on state infrastructure projects.

The public, she said, hasn't held the state government as accountable for its spending "as we might if those were our dollars."

Ferry added that proposals for an income tax or other revenue generators would be a "heavy lift" for politicians, who would need support from the public.

The challenge for Walker and his administration will be translating the policies that emerge from the conference into successful legislation.

Lawmakers watching

During the Legislature's regular session this spring, the governor, who was elected as an independent with support from the Alaska Democratic Party, faced strong resistance to many of his proposals from the Republican-led Senate and House.

Andrew Halcro, a former legislator and Anchorage mayoral candidate who attended Murkowski's conference in 2004, said he was skeptical anything concrete would emerge from Walker's conversations this weekend until more people feel pain from budget cuts and pressure their elected officials for change.

"You walk out those doors, and you still depend on the 60 men and women in Juneau to make the right decision," said Halcro, who as a lawmaker was a member of a bipartisan fiscal policy caucus. "We can point to the scoreboard all day long, but the only people that are changing the numbers are the people that vote on the floor."

Halcro pointed to conservative lawmakers -- especially those from the Mat-Su -- as big obstacles to the types of policies that will be examined at the Fairbanks conference.

But one conservative legislator, Sen. John Coghill, R-North Pole, acknowledged that the Legislature "will have to entertain those ideas," though he also said there was still "room to squeeze" down the state's budget.

Coghill will attend the conference and said he'd be watching Walker's own "policy direction." Lawmakers, he added, would be following to see what Walker proposes.

Walker maintained that he was going into the weekend without having specific preferences about how the state should match spending with revenue.

"I imagine by the end of the weekend, I will," he said. "I think it'll narrow it down for me."

Along with other participants, Walker said, he will be staying in a university dorm room for the conference. As for his roommate?

He said: "I think it's the first lady."

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