Fixing fiscal problems
The Voice of the Times (Nov. 16)
Gov. Frank Murkowski should pay close attention to the message sent him on the fiscal gap recently by eight business, industry and civic leader groups.
We agree with the petitioners on at least two of their three major points - that a fiscal fix should involve increased budget discipline and some use of Permanent Fund earnings.
We are less comfortable with their suggestion that eliminating the fiscal gap should involve a broad-based tax like a sales or income tax. It is perhaps inevitable that the state will be forced to tax its residents once again, but with $25 billion in its Permanent Fund, Alaska should be able to defer that day for some time yet...
As we've mentioned before, changing the Permanent Fund earnings calculations to a percent of market value would allow the state to pay dividends of more than $1,000 and still free up something like $625 million per year to reduce the deficit.
That change would be relatively painless since this year's dividend was $1,107.56, but the conversion needs to be made soon. Waiting could alter the calculations and the pain could be considerably greater. Facing the state now is a window of opportunity not to be missed...
The business and industry leaders also expressed concern that the state might try to raise revenues with new taxes on the oil and gas industry. We share that concern - since industry already pays heavy taxes - and think such an approach would be almost certain to torpedo the governor's plan to raise revenues through increased resource development.
The Fairbanks Daily News-Miner (Nov. 15)
R epresentatives of several major Alaska business and civic organizations sent a loud and unified message recently to Gov. Frank Murkowski and the Legislature's Republican and Democratic leaders: The state needs a long-range fiscal plan, and it needs one now...
Their statement correctly excludes an expectation of increased revenue from natural resource development. Such development had - until recent months - been offered by the governor and many others as an element of a near-term plan to prevent the state's recurring financial shortfalls. While the governor and Legislature have taken steps to encourage development, additional revenue is not expected to arrive in sufficient quantity before the state's Constitutional Budget Reserve runs out, now estimated to occur in January 2007.
The Anchorage Daily News (Nov. 13)
I t makes sense that a group of business leaders from around Alaska have signed a strong message to Gov. Frank Murkowski calling for a three-part solution to the state's fiscal gap, a deficit measured in hundreds of millions that threatens the state's prosperity.
These are people who know what it takes to make business work, who understand where their bread is buttered, who can read numbers with comprehension. They know that Alaska can't just grow its way out of trouble, as the governor claimed in his campaign...
This coalition is hardly an assemblage of tax-and-spenders - Associated General Contractors, Association of Alaska School Boards, Anchorage Chamber of Commerce, Council of Alaska Producers, Alaska Support Industry Alliance, Eagle River and Chugiak Chamber of Commerce, Resource Development Council, Juneau Economic Development Corp. Most of this cast were Murkowski supporters during the campaign. They want a governor who's pro-development; they may even be rallying the troops to provide political cover for their guy when the numbers become too obvious for even the Murkowski administration to massage...
Understandably, many Alaskans will yawn at this latest round in what they call the fiscal follies. After all, we've had roundtables and economic summits and hearings and town meetings. We've heard it all before. There's no mystery left in the problem.
But there's not enough will to solve it, either. That's why the business leaders' letter is welcome. It's another push to confront the state's fiscal gap and fairly apportion the parts of the solution - hard-nosed but wise cuts, fair taxes and a share of the Permanent Fund earnings so that we can all continue to prosper here.