?"The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise -- with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country."
?President Abraham Lincoln's words apply to the situation we are in right now in Alaska.
Forget the platitudes of "Cut the budget first," "Hands off my PFD," "Something will come along to save us again," "The oil companies make too much profit in Alaska," "Maybe we could have a lottery," or any of the other simplistic and inadequate sayings we use to avoid reality. None of them will solve the problems we face.
The simple fact is we have had a free ride in Alaska since 1980 when we abolished our statewide income tax and went on the oil revenue train. Oil revenues have paid for most of our operating and capital spending. This cannot continue. It's time to act as soon as possible to avoid an economic collapse that will unwind the fabulous state many generations have built and that we all love and want to prosper.
At this point, the more we talk about trying to find the perfect solution to our fiscal problems, the less likely it is anything will happen in the time frame that is necessary to save our economy. Elected officials must get beyond "let's just wait," and they must feel support from Alaskans to take action this coming session.
In 1976 when Alaskans voted to adopt the constitutional amendment that created the Alaska Permanent Fund, it was sold to voters with a simple goal: Prudhoe Bay will not last forever. Someday the oil revenues will run out and when that happens it would be great to have saved enough to help pay for education, transportation, public safety and all the other things that define a civilized society. I know this because I worked for Gov. Jay Hammond as his legislative assistant, and was part of his team going to meetings around the state discussing the amendment with voters.
The Permanent Fund dividend was not part of the package. This may come as a surprise to people who weren't here then, but the dividend came several years later, as a way of sharing some of the revenues from Permanent Fund investments. Gov Hammond, who pushed very hard for both the creation of the fund in 1976 and the dividend in 1980, saw it as a way of both equalizing some of the state's resource wealth and protecting the fund itself (so people wouldn't raid the fund for big capital projects or other subsidies). That's worked really well. Maybe too well. Because now people think the fund was created so they can get a check every year, even if the economy of Alaska tanks, people lose jobs, schools close, business owners go bankrupt and families lose equity in their homes.
Alaska might have two or three years of savings left, in addition to the Permanent Fund itself (assuming the price of oil stays the same and significant budget cuts are made every year). Then we hit the wall.
Alternatively, we can use those savings combined with earnings from the Permanent Fund as an endowment to adjust to a sustainable level of spending and new revenues as a "safe landing" to cushion the economy. If we don't do this, there won't be a dividend in a few years anyway. So reducing the dividend to the level it was a few years ago (2012, 2013), and using a portion of Permanent Fund earnings to fill the gap is a trade-off worth making to keep Alaska from that wall.
Gov. Bill Walker has proposed one way to do this and so has Sen. Lesil McGuire. Others may suggest different approaches and that's fine ... as long as the Legislature passes one of these safe-landing solutions in 2016. Waiting for the crash is unacceptable, and unconscionable -- damaging to our economy, communities and Alaska's future. Both Republicans and Democrats alike must channel Abraham Lincoln and find the courage to act before it is too late.
Fran Ulmer has served many roles in her long engagement with Alaska issues: mayor of Juneau, member of the Alaska House of Representatives, Alaska lieutenant governor, director of the Institute of Social and Economic Research at the University of Alaska Anchorage, former UAA chancellor, and former staff to Gov. Jay Hammond.
The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.