Opinion: When will the real conversations about Alaska’s future begin?

Spring in Alaska brings back familiar patterns. Temperatures reaching the 50s. The snow begins to melt, creeks fill up, mountains of dog poo appear on the lawns, and buds of green start to emerge on the trees. Equally noticeable are the budget deliberations in Juneau, which one way or another end up focused on the amount of the Permanent Fund dividend. But there’s a behavior pattern that builds to this endpoint. The governor proposes the maximum dividend, legislators do a bunch of arm-waving about the budget deficit, the education budget comes to the forefront, the Anchorage school board proposes to cut programs, education advocates call for increases in the budget, legislators host town halls, and, eventually, new taxes come into the conversation. Local media interview parents and students about the potential discontinuation of their favorite sports program or the closure of elementary schools.

Then the tug of war emerges — new taxes versus a cut to the dividend. The conflict is obvious if you pay attention, despite the rhetoric. Several types of taxes are mentioned, such as oil industry taxes, corporate taxes, S-Corp tax, personal income taxes, sales taxes, excise taxes on gasoline. This blur of taxes creates confusion and frustration. This is about the time when one or two local economists espouse about the value that the dividend brings to the Alaska economy. A brave journalist might write an article about how the Alaska economy has been in decline for a decade or so, and people don’t like to hear that. Last-minute machinations occur in Juneau as the session is about to end. A compromise education budget emerges along with the amount of the dividend, which is well below the maximum the governor proposed months earlier.

Another mediocre outcome for the state has occurred. Everyone is unhappy, but we got through it, right? Or maybe not, as we still have the threat of the governor’s vetoes.

I like what comes next: Several legislators write about how we haven’t solved the fiscal problem, just delayed it another year. It’s their courage I admire, and it likely assists them in addressing their self-image concerns.

It’s uncertain when or what crisis will prompt it, but eventually, some bold influencers will admit we can’t afford to pay the dividend. Hopefully, they reside in the Legislature or the governor’s office. They will also acknowledge that it’s illogical to tax some residents in order to fund unrestricted payments to the same residents and others who do not have a demonstrated need. In fact, it’s uniquely un-American. If this type of money transfer had positive economic impacts, it would have been adopted by all government entities in the United States long ago.

When we get to this point of honesty and courage, then the real conversations will begin — the ones that lead us to a solid fiscal plan for the state of Alaska.

Al Bolea is a retired leadership trainer and former distinguished visiting professor at the University of Alaska Anchorage. He’s also a retired oil and gas executive.

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