Alaska editorial: Take another step forward on funding

Posted: Friday, April 20, 2007

This editorial appeared in the Anchorage Daily News:

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House and Senate leaders have agreed to forward fund public education with $1 billion in budget surplus, the temporary boon of high oil prices.

It's a good idea. The $1 billion for the 2008-2009 school year could allow school districts to plan ahead with more confidence, sparing all of us the rite of spring that includes layoff notices and uncertainty about programs because the Legislature is still struggling with the next year's budget.

Forward funding also makes sense if the Legislature is going to cut its sessions to 90 days, providing less time to wrangle through budgets, geographic cost differentials, base student allocations and all the other nuts and bolts of paying for learning.

And it makes much more sense to put aside this surplus money for the recurring costs of schooling than it does to sock it away in the Constitutional Budget Reserve or the Alaska Permanent Fund.

"I definitely think it's a step in the right direction," says Carol Comeau, Anchorage schools superintendent.

But it's only a step. School districts welcome the move but would be much better off with a few more.

Janet Stokesbury, chief financial officer for the Anchorage district, points out that districts could plan ahead if they had a fix on the base student allocation a year out - in other words, what the state's contribution would be to each district based on expected enrollment.

Right now that base allocation is $5,380 per student, which provides $265 million for Anchorage.

Ideally, Comeau says, forward funding would also include an index to inflation that would account for increases in utilities, insurance, supplies and other costs so that districts aren't strapped into cutting programs so they can heat buildings - or forced to give layoff notices that may or may not count.

Lawmakers have a good idea here, but it's incomplete. Guaranteed, there will be future battles over spending increases. And what happens after 2008-09? What happens if state revenues come up short in future years to forward fund the next year? We're back to the same old uncertainty.

The legislative exercise reflects wise thinking; it even hints of a fiscal plan. But there's the rub. Without a long-range, sustainable fiscal plan, smart moves like forward funding for education depend on the vagaries of oil prices.

Alaska has been fortunate over the years - even in the lean deficit years when oil prices fell below $10 a barrel - because we had savings to pay for state services without taxing ourselves or tapping permanent fund earnings. And in recent years, oil prices have been high enough to keep us well in the black, even as production has declined.

We've been lucky, not wise.

All along we've had the means to build a sound fiscal plan. It would be one thing if budget surpluses were our only option for planning ahead. But we have a tremendous machine for making wealth in the permanent fund ($38 billion) and a robust Constitutional Budget Reserve ($2.5 billion). We have the wealth to put our finances - including the education of Alaska's students - on a sustainable basis.

Oil prices will matter for a long time, but we still can and should put ourselves more in control of our own destiny.

Comeau is right. Putting that $1 billion forward is a good step. Let's take it - and keep going.



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