George Matz

George Matz

Point of View: Alaska’s Fiscal Crisis is a Mindset

Alaska’s fiscal crisis is mostly in the mind and ideology of Gov. Mike Dunleavy and his transplanted cohorts, who appear to be disciples of Ayn Rand.

It seems their belief is that the private sector can do no wrong and the more that government does to privatize its fiscal assets (PFD), resource wealth and responsibility to its citizens (API), the better the economy. In turn, we as citizens of the economy will be better off and not need as much government service. If his massive governmental remake creates a situation where the state doesn’t have enough revenue to pay for privatization, the conservative go-to solution is reduction of state-provided services. This is the crux of our current debate.

Now, as campaign promises become more clear, true Alaskans (those who care about the welfare of their neighbor as well as themselves) are questioning Dunleavy’s pillars of progress. They acknowledge that government services need better efficiencies, but question whether Dunleavy’s approach is throwing out the baby with the bathwater. Efficiency should not mean without. Rather than seeing our economy as a private sector pogo stick, they recognize that a balanced economy is a stable three-legged stool with healthy private, public and nonprofit sectors. Each of these sectors has unique advantages for serving us and the best balance is a good match between the sectors and our societal needs.

It’s apparent that many of Alaska’s citizens don’t see state government as this evil, ever-spending monster as portrayed by the governor. They realize that the state may be the more appropriate choice to provide some services we seek, or even need. This particularly applies to situations considered to be “market failures” due to lack of economies-of-scale (e.g. rural communities) that are not attractive to private sector investment. Many Alaskans speaking out are acknowledging that these services need to be paid for, at least in part, by the public even if that means more revenues. It’s what’s fair more than an obsession over what is efficient.

Gov. Dunleavy’s radical vision of governance may be a catalyst for developing a fiscal consensus that says we are willing to pay for what we get, but we want to be sure we get what we pay for. The pillars of pragmatism for this developing consensus are:

1. Reduced Permanent Fund Dividend – Fiscal austerity facing all state agencies should be shared by PFD payments.

2. Fair Oil Taxes – Oil and gas companies are fastidious about maximizing profit. Why not the state who initially owns these resources?

3. Progressive Income Tax – A progressive income tax in tandem with the PFD provides fair balance between aiding those financially struggling and applying a “user fee” for state services. It also ensures that nonresident workers pay something for their use of state services and resources.

4. Renewable Resource Management – Most Alaskans make use of our renewable resources for harvesting and/or recreation. Sustainable yield of these resources, as called for by the Alaska Constitution, depends on state agencies having sufficient funding to pay for qualified staff, etc. The Dunleavy budget cuts may be sacrificing its constitutional obligation for sustainable renewable resource management to pay for a higher PFD.

Gov. Dunleavy’s proposed budget came out of the chute like a charging bull. But the legislature has heard the public outcry over drastic budget cuts and some finance subcommittees are not using the Governor’s proposed budget for markup. Dunleavy’s budget is the centerpiece for his mindset, and it tripped coming out of the chute. It leaves one wondering what he will do the next three years.

George Matz now lives in Homer. He has experience in the private, public, and nonprofit sectors. In his career as a state employee he was a budget, policy, and project analyst as well as special assistant to the commissioner.

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