National report card: Alaska government gets a C

State lost points for using oil money instead of permanent fund for budget gap

Posted: Tuesday, January 30, 2001

Alaska's state government received a passing grade but fell short of the honor roll in a study by a national research group.

The state received an average grade of C for its management performance in a study released today by Governing magazine of Washington, D.C., and The Maxwell School at Syracuse University.

Alaska also got a C when the nationwide survey was first conducted, in 1999.

This time, the report faulted the state for its reliance on oil money reserves to fill a budget gap while $27 billion sits in the Alaska Permanent Fund. Also cited were a backlog of maintenance projects, a personnel recruitment problem due to "a sagging salary structure" and executive branch differences with the Legislature over how to measure agency performance.

The state got C's in financial management, capital management and human resources, and a C-minus in "managing for results." The only bright spot was information technology, which earned a B.

"Alaska has been a national leader in moving public information and transactions to an online environment, of particular importance in the most geographically far-flung state in the union," the report said. "The technology for investing Alaska's Permanent Fund money is equal to that at the best Wall Street brokerage."

The report got different reactions from leaders in the Republican majority and Democratic minority in the Legislature.

"Candidly, it doesn't bother me whatever," said House Finance Co-Chairman Eldon Mulder, an Anchorage Republican. "As we all know, Alaska is different, and Alaskans like to look at their state differently."

Keeping the permanent fund separate from government operations is "what Alaskans support," Mulder said.

The report is correct that there is a big maintenance backlog and a difference between the executive and legislative branches on how to measure agency performance, but progress has been made on both fronts, he said.

House Minority Leader Ethan Berkowitz, an Anchorage Democrat, said that the C grade is "charitable."

"It's not surprising that elephants want to pay state workers peanuts," creating concern about a worker shortage, Berkowitz said. In regard to deteriorating infrastructure, he said, "The Legislature has done a very poor job of moving the state forward."

The unavailability of the permanent fund for government operations isn't the point in regard to the budget, though, he said. "What's unacceptable is the failure to wrestle with a long-range fiscal plan."

Commissioner of Administration Jim Duncan said the grading of states was tough, noting that Alaska was third place last year in "digital state" ratings by Government Technology magazine, yet received only a B from Governing and The Maxwell School. But he conceded that workforce retention and recruitment are an issue, notably with nurses in the Pioneers' Homes and oil and gas engineers.

In overall rankings, no state got an A. Washington, Utah and Michigan were graded A-minus.

Bill McAllister can be reached at

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