In addition to the ballot measure appearing on the Nov. 2nd general election ballot asking voters if they wish to increase the size of the Alaska Legislature, Alaskans this year have the somewhat rare chance to make two significant public funding decisions. Bonding Propositions "A" and "B" were put forward by the Legislature this past year with an eye toward more directly involving the electorate in the appropriations process, one in obeisance to federal law, and the other as a legislative policy choice. Alaskans tend to be fiscally conservative, and both propositions will be thoroughly scrutinized by voters asked to make the affirmative choice to fill in the oval next to the word "yes" on the ballots this November.
Proposition "A" is before you as a result of the enactment of Senate Bill 217, introduced at Gov. Sean Parnell's request this past January. SB 217 in part seeks to raise significant monetary resources through bond sales by the Alaska Housing Finance Corporation, or AHFC, a state-owned entity whose mission is to provide Alaskans access to safe, quality, affordable housing. Veterans are a large and growing group of Alaskans, noble servants of our national interest who have placed themselves in harm's way for our communal protection and safety. Men and women who have all risked their lives, so many of whom are grievously injured or pay the ultimate price of loss of life, deserve our gratitude and post-service support. Alaska has the highest per capita veteran population in the country, the military fills a crucial and irreplaceable social and economic part in our daily lives, and we simply must enhance access to affordable housing for veterans.
Federal law mandates before a state housing agency issues veterans' bonds, a state's voters must authorize the plan. While this federal statute isn't specifically mentioned or perhaps even envisioned in the U.S. Constitution, it is good policy because it makes sense for Alaskans to decide whether to allow AHFC to sell up to $600 million in state-revenue backed bonds over the next four to six years to generate funds for mortgages for qualifying veterans. Almost $3 billion in such bonds were issued from the late 1990s through 2002, generating funds for the existing veterans' loan program. The last infusion of $500 million was eight years ago. New funds are essential just to meet existing demand for veterans' mortgages, and recent actions by the federal government will further rightly expand eligibility for the numerous veterans of more recent wars, who deserve this benefit as much as any one. A vote in favor of Proposition "A" will make better lives possible for Alaskan veterans of all generations.
As SB 217 moved through the Senate and House, legislators rightly inquired how Alaska's mortgage market was doing overall, and specifically how loans backed by this type of bond have been performing. AHFC informed our elected leaders Alaska has one of the lowest delinquency rates in the nation overall, in large part because we haven't had a property valuation bubble inflate and then deflate, or even burst, as in other parts of the country. AHFC as an agency has stayed away from dicey and unsustainable market schemes like unpredictable adjustable rates, mortgage-backed securities, and no-interest loans. Veterans' mortgages perform better than Alaskan mortgages generally, have very low default and foreclosure rates, and are generally held by retirees with pensions or those who are working in second, post-military careers.
AHFC has helped Alaska weather severe economic crises in the past, particularly in the late 1980s when there were vast numbers of residential foreclosures. As a state agency, AHFC was not forced to try to resell an inventory of foreclosed houses it had suddenly come to own, as a private lender might have been forced to do. AHFC's ability gradually to remarket houses helped the overall housing market regain its footing. AHFC is also a handy source of revenue for the state's General Fund, and is approaching $2 billion in profits returned to the state in the past quarter century.
Beyond its veterans program, AHFC does a lot more to better housing for Alaskans, from granting money to increase energy-efficiency, researching and promoting Alaskan-weather appropriate building standards, and creating crucially-needed senior housing. AHFC also provides targeted home loans to certain high-demand professions including teacher and nurses, and to active-duty military families to make Alaska a more-military friendly place.
In addition to placing Proposition 'A' on the ballot, SB 217 implemented two other AHFC management priorities, the purchase of its headquarters building in Anchorage at a price not to exceed $14.5 million, and the purchase or construction of a new public-housing intake facility in Alaska's largest city. As AHFC more than pays its way as a state agency, it successfully justified both projects to the Legislature which unanimously passed the two discrete expenditures. The rest of the job is up to voters, who I hope will vote to do the right thing for Alaska's veterans today and in the future.
Brown is an attorney who lives in Juneau.
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