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My Turn: Where not to get money to bridge deficit gap

Posted: Thursday, March 28, 2002

I have been reading Alaska's newspapers with great interest and amusement. Everyone has an opinion on how to solve our state's budget problem, including yours truly. Most people don't know exactly where to get the money to make up for the budget deficit, but everyone has an opinion about where not to get the money. Depending on whom you are listening to, we cannot take money from the permanent fund. We can't take it from a sales or an income tax either. We can't take it from the tourists, the bars or the liquor stores, and we sure as heck can't reduce state spending.

If we enact any of these ideas for new revenue, the state will fall into utter chaos. Businesses will go bankrupt, the tourists will stop coming, welfare programs will shut down, politicians won't get reelected and we will degenerate into a massive state of depression and foreclosure that will have half the people moving back to the Lower 48. Hey, that might not be such a bad thing after all.

If you are still undecided on which idea is "the dumbest plan you've ever heard," let me show you an easy way to pick one. Figure out which plan will cost you the most money, then start ranting, raving, yelling and screaming about it. After everyone is tired of listening to you, write a few letters to the editor explaining why yours is the best idea for where not to get the money. Make sure you add a few phrases like, "as an Alaskan," or "it's the right thing to do." This adds more weight to your argument than using actual facts.

If you're still having a hard time figuring out which plan not to support, I can jump back up on my soapbox and start doling out my opinion.

If we cap the PFD checks, or tap into the fund, it will solve our problems for a few years. The same thing goes if we impose a sales, income, tourist or liquor tax. Whatever amount of money in new revenue the state gets, it will spend. A few years down the road, state government will have expanded to the point where all the new income is gone faster than it comes in. We will then be back to square one with the budget deficit, and we will need to find more money somewhere else.

The problem is that state workers have no incentive to save money. There is no reason to shut off a light or make that service truck last one more year. If they don't spend the money in their departments' budget, the budget gets cut the next year. That's why we see the mad scramble to spend what's left of the budget before the end of each fiscal year. It happens in every state department. I've seen it.

Now I know that some departments are underfunded and actually need all the money they get. But I would be willing to bet that if we had an incentive program that would split every dollar a department comes in under budget 50-50 between the state workers in that department and the state's general fund, you would see some state workers become millionaires and the state's budget would not increase year after year. To do this though, you would have to guarantee that each department's budget would not be cut no matter how much they saved. The bad thing about this plan is that we would be making some state workers rich and saving the state millions each year, so obviously it can't possibly work.

I have also been told that if we did this, the public would suffer because each department would be reducing public service to save money. Well, the other option is to cut the programs out all together because we've been told we can't pay for them anyway. So you tell me which option might make public service suffer more, reducing the service or eliminating it altogether.

I know this idea is way "outside the box," but maybe it's time to start thinking that way, because the bottom line is that until we give our government employees some incentive to save the state a few bucks, they will spend every dollar they get just to keep their budget for the next fiscal year.

Just because, "that's the way it's always been", doesn't mean that's the way it has to be.

John Newell lives in Juneau. His mother was a Democrat who worked for Gov. Knowles and his father was a Republican who supported Jay Hammond, so he has heard it from both sides for 35 years.



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