Get real on Alaska’s budget with honest talk of cuts and revenue

As the legislative session begins, it seems inevitable that we will once more witness the Legislature's surreal efforts at dissecting the governor's budget to see if they can find where he has hidden all the unnecessary spending.

Some legislators will use the budgetary process to blame the governor for wasteful government spending while ignoring the fact that the administration can only spend what the Legislature appropriates and that the governor has aggressively used his veto pen to reduce past legislative appropriations.

Others will use the time to continue their tired pontifications on the need for a much smaller government, yet will once more fail to have the strength of their convictions to actually propose any real changes. They will pound their chests about hundreds of ill-conceived budgetary changes and claim they could save tens or even hundreds of millions of dollars if the other party wasn't so obstinate, all the while ignoring the impact that those cuts would have on the delivery of the grants, programs and services that the Legislature itself has mandated the administration provide.

[Save our state: Realism and compromise are keys to Alaska's fiscal fix]

Some will simply refuse to do their job and happily spend the last pennies in the state's savings account to avoid making a politically dangerous decision, while others will use the fiscal crisis as a way to continue to feather their political nests by publicly ranting and raving about the terrible thing the governor and their fellow legislators did in reducing the dividend and/or proposing one or more new taxes.

It's time to stop the petty squabbling, silence the unproductive political rhetoric and get real with the people of Alaska. Over the last three years, the governor and serious legislators have done all that they could to reduce the budget while maintaining the programs, services and grants that the public and local governments have come to expect. Difficult decisions to reduce the size of the dividend in order to save money to cover revenue shortfalls and proposals to implement taxes to increase revenue were made only when it became clear that the state's savings accounts were being depleted at an unsustainable rate and that further large-scale spending cuts would have significant economic and social consequences and severely impact the ability of local governments to provide mandated services.

There are only three real solutions to the fiscal crisis: raise revenues, reduce the size of government by actually eliminating certain programs, services and grants, or begin spending from the Permanent Fund earnings reserve.

Raising revenues and the sustainable use of the Permanent Fund earnings reserve have been debated ad nauseam but have become hopelessly gridlocked over the last two years in an ideological battle over the proper size of government. In order to break that gridlock, it is time for the budgetary process to stop looking for pennies in the couch cushions and hold hearings on the real benefits and consequences of reductions in programs, services and grants.

Until the Legislature finally decides to hold real and difficult public hearings on what to keep and what to eliminate, it will continue to fail the people of Alaska by perpetuating the myth that the current level of government services can be provided indefinitely at no cost to the public.

We can no longer afford to waste time on endless politically charged debates on the ideology of cutting Medicaid, the proper level of public school funding, or the size of the state payroll. Nor can we continue to give credence to random and undefined targets to reduce government spending by $200 million, $500 million or $1 billion from the budget. What we need in the budget process are actual debates around well-defined cuts in programs, services and grants.

We need to bring the discussion out of the caucus rooms and legislative offices and hold real public hearings and forums where citizens and local governments can voice their concerns about the impacts of specific government spending cuts.

Only then can the Legislature make an informed decision on whether to eliminate a specific program, service or grant or to raise the revenues necessary to continue its support. Only then will the public have the information necessary to judge those legislative decisions. Only then will we have a clear path out of political gridlock and into fiscal stability.

Randy Hoffbeck is a former commissioner of the Alaska Department of Revenue.

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