Every once in a while, something comes along that is so big, so monumentally important that it draws people together who come from viewpoints that usually couldn't be further apart. Now is one of those times in Alaska's history.
We are the CEO of one of Alaska's largest corporations and the president of the state's largest labor organization. In fact, not so long ago, we squared off on opposite sides of a major union organizing campaign.
So what is this issue that has brought us unlikely allies together? It is the state's current $3.8 billion budget deficit, which inches closer to $4 billion every day as oil prices continue to plummet. This is about saving jobs. This is about saving the state, preserving its credit rating, and solving a budget crisis that threatens to destroy our economy, send home values plummeting and fundamentally change, for the worse, the Alaska we all love. These things will all happen if something significant isn't done now. If you think this sounds scary, you're right. But we're not trying to scare you. This is a simple fact and there is a solution.
We have joined with others to form a coalition called Alaska's Future to work on solving this problem. And it needs to be solved this legislative session.
We are business, labor, Alaska Native organizations, nonprofits, former lawmakers and members across the entire political spectrum who have come together to promote a solution to Alaska's current budget challenge. We're Alaskans who agree that we must act now. Kicking the can down the road is not an option. A year of inaction strips nearly $4 billion from our savings. This can't wait until after the next election.
We are committed to empowering the Legislature to use a portion of Permanent Fund earnings to pay for essential public services while protecting dividend checks for future generations. We are not advocating for a particular piece of legislation; that is the Legislature's job. We're simply advocating for the use of Permanent Fund earnings in addressing our budget shortfall, and doing it this legislative session. This is an approach that is widely acknowledged by Alaska's most respected financial experts as the single most prudent solution to address our massive deficit.
Doing this entails restructuring how our Permanent Fund dividend is calculated, which means leaner checks when the price of oil is low but will provide long-term stability for the state budget and protect dividend checks for future generations of Alaskans
As more and more Alaskans are starting to understand, the approach to using Permanent Fund earnings doesn't close the entire budget deficit and it is not a "raid" on the Permanent Fund; rather, it is the single largest, viable solution to reducing a significant majority of the huge deficit.
Failing to take action will result in the end of the dividend program within three years. We get to choose whether or not to pay dividends while there's money left, but once the money is gone, the decision will be made for us. The plans currently under consideration in Juneau do in fact reduce the amount of the dividends to about $1,000 but extend the life of those dividends indefinitely. It's easy math: $2,000 checks for three years and it's over, or, depending on the plan adopted, at least a $1,000 check next year and dividends continuing into the future.
Members of our coalition may have different ideas about how to close the rest of the budget gap, but we have coalesced around the notion that using Permanent Fund earnings must be the linchpin of any comprehensive plan. Failure to do so will cause the state's savings to be depleted rapidly, with catastrophic fallout to our state's economy. No combination of cuts or new taxes gets anywhere near reducing the deficit in the way that a reasonable and sustainable approach to using a portion of Permanent Fund earnings will.
We ask that Alaskans join us, get involved, go to the Alaska's Future website at akfuture.org for more information, and let your legislators know that you want future generations of Alaskans to have the same educational and economic opportunities that we have had, while protecting vital public services and a meaningful dividend for Alaskans for generations to come.
Ron Duncan is the president and CEO of GCI, Alaska's largest telecommunications company. Vince Beltrami is the president of the Alaska AFL-CIO, Alaska's largest labor organization. They are co-chairs of the Alaska's Future coalition.
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