Empire Editorial: Time for an Alaska fiscal plan of its own

Posted: Sunday, April 03, 2005

Lisa Murkowski, one of Alaska's U.S. senators, had a sobering message for Alaskans and their lawmakers this week. It was a call for fiscal responsibility that must be taken seriously - not shirked as state officials have done to date.

In her annual address to the Legislature, Murkowski said Alaska's federal meal ticket may be revoked. For decades the state has relied on federal largesse that likely isn't here to stay.

"As Congress works to reduce the federal deficit and we face competing funding priorities, we must recognize that the federal government will play less of a role in Alaska's budget in the years to come," the Republican senator said Wednesday.

Democratic critics have a right to raise an eyebrow, as they did this week, at such comments. Murkowski's election campaign last fall was all about keeping the Republican team in place so the favors that U.S. Sen. Ted Stevens has lavished on the state could keep coming. But the election is over, and now comes the governing. In the future, as Murkowski says, Alaskans won't have it so easy.

The first necessity that arises from the coming change is for a state fiscal plan. Most years Alaska is left siphoning money from its constitutional budget reserve just to break even, and that cannot last forever. Last year Gov. Frank Murkowski called on the Legislature to create a fiscal plan that pays for government up front - even called them back into special session once they left - but lawmakers were not ready. This year, with oil revenues roaring upward, it's scarcely even a topic of conversation at the Capitol.

Some have tried to renew the debate. House Speaker John Harris, R-Valdez, proposes dumping the constitutional budget reserve as a way of forcing the issue. But because a fiscal plan likely would mean altering the state's tax structure or tinkering with the Alaska Permanent Fund or both, legislators appear too squeamish to rock the boat. They need to do so. For a year critics have warned the Legislature that temporarily high oil prices are no reason to forget about the future need for a budget fix. Sen. Murkowski's federal budget predictions are further evidence that now is the time to act. A crash of both oil prices and federal dollars could cripple the state if it isn't prepared.

The second necessity of the coming age is construction of an economy that relies less on investments by Outside companies that take their profits out of state. It's a tall order in an isolated land that has always been resource provider to the country, but it is time for Alaska to grow its own businesses.

The state should look for ways of encouraging its innovators to do business here, and it should look at the University of Alaska system as a prime incubator for further growth. The university's request to build its research and development fund to $20 million over five years is a key both to leveraging funds to attract Outside grants and in fostering research within the state that could develop jobs here.

Alaska's resource exports remain its economic mainstay, and its colonial roots are firmly in place. But in preparation for the changes ahead, Alaskans increasingly must look to themselves.

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