Alaska editorial: An opportunity for fiscal responsiblity

Posted: Tuesday, January 18, 2005

This editorial appeared in Sunday's Fairbanks Daily News-Miner:

There's no denying that there's a bit more optimism among elected officials in Juneau. It was evident in Gov. Frank Murkowski's State of the State speech on Tuesday. Amazing what a few extra hundred million dollars can do.

It was just a year ago, almost to the day, that Gov. Murkowski addressed a joint session of the Legislature for the annual speech and announced he would create a panel, a "Conference of Alaskans," to help shape his policy regarding the spending of money from the Alaska Permanent Fund and the state's Constitutional Budget Reserve. At the time, the price of a barrel of oil had yet to begin its steady march into the upper $40s, and the budget reserve was estimated to run dry in May 2007. Annual budget gaps, which have afflicted the state for most of the past dozen or so years, loomed as a steady prospect.

The turnabout in the state's fiscal fortunes due to exceptionally high oil prices has seemingly put the good work of the Conference of Alaskans on the shelf, out of view. But the governor, in his speech this year, seemed to indicate that the work by the conference delegates, who convened in Fairbanks in February, shouldn't be forgotten: He urged the Legislature to approve measures to make long-term fixes to the state's budgeting, with one of those being adoption of the percent of market value plan for how permanent fund money is used.

But getting broad legislative attention to long-term fiscal issues in an environment suddenly flooded with oil cash will require more than one-time gubernatorial pronouncements in the middle of winter; the governor will need to be continually and publicly pressing lawmakers. Some complained last year that the governor was on the sidelines far too long in the fiscal debate.

The governor would do Alaskans well if he can convince them, and the senators and representatives they have elected, of the wisdom of pursuing fiscal correctives now, while the amount of oil revenue washing ashore is up.

It won't be easy. Oddly, the task would prove less difficult if the price of oil were to plummet.

While no one really hopes the price of oil slides, a reminder of how Alaska's treasury is affected by sudden mood swings in the price of oil surfaced last week with the announcement that the anticipated surplus for fiscal 2005, which ends in June, is now estimated to be $187 million less than expected. Seems the price of oil dropped just a bit, proving yet again why now is the time to act responsibly for the future.

If the governor and Legislature can come to agreement, the optimism expressed Tuesday night by the state's chief executive might extend for many years.

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