Alaska’s budget — our call to duty

Alaska is in a pre-crisis situation and it requires our attention. The finger of doom is pointing directly at me and my fellow Alaskans. Government spending and our home-grown savings plan are in jeopardy. Do you understand the issues?

First, the savings plan. There are two primary and separately managed parts to our permanent fund/savings plan, they are the corpus and the earnings reserve. The permanent fund corpus is constitutionally protected and cannot be used without a vote of the people. It is our major investment of about $45 Billion dollars. The earnings reserve holds about $6.4 billion in reserves and about $1.2 billion in dedicated Permanent Fund Dividend distribution and corpus inflation proofing (adding money to the fund). Please hold onto the thought that we are not in crisis.

We can maintain pre-crisis spending for about 15 years (some folks say 20 or 30) if we just open up the permanent fund and give it to government at a spending rate of about $5.2 billion per year. Even if we didn’t open up the corpus of the permanent fund, we can maintain/supplement governmental spending for three to five years with permanent fund reserves (not the dividend) and constitutional budget reserves of $7.5 billion, for three to five years. So, we have the wherewithal, and the time, to pull ourselves out of this situation. The question is do we have the will?

Alaska’s forefathers (Governor Jay Hammond never claimed to do it alone) anticipated situations like ours by building the permanent fund. They gave us an incentive to pay attention to that large bundle of money by ensuring that we are reminded it exists for our benefit through receiving our annual dividend. The fund and our dividends are intended to be our renewable resources. They are the resource we will use to replace the nonrenewable resources that are removed from our land in order to pay for our day-to-day lives and government — the oil, the fish, the fur-bearing animals, the trees, the jade, the gold, the molybdenum, the lye, the coal, etc. Those are the things that pay for our lifestyles through jobs and/or subsistence. All of these resources, including the permanent fund, are carefully managed and monitored. We may think that they are too carefully managed, but we do have that rainy-day fund that may yet save us.

So, we have taken the good times and rolled with them. We’ve spent everything we could to employ tens of thousands of us, increase our infrastructure, educate our children, guard the health of our people and otherwise improve our lives. Now is the time that we need to pay attention. Now is the time when we must decide to spend the rest, carefully dole it out, or leave it as is.

The governor has proposed very little in the way of cutting spending. His proposal is to take the money and spend it on government. He indicates that he is protecting the permanent fund and our dividends by putting governmental mineral revenues into the fund and basing our dividends upon royalty amounts and other similar revenues. One concern here is that basing our whole economy on oil money is what got us into this fix. It’s our government’s predilection for spending that has us considering the hard decisions. It’s also the prescience of Alaska’s forefathers, who prepared a savings plan for the boom years that is securely out of the reach of government. We have increased that amount through wisely managed investment of those funds. Only we can answer the question of whether or not to stop the spending until it hurts, or make a grab for the cash and let government continue to spend. Only the legislature can control the spending, but we can control the legislature.

The governor is also proposing increasing revenues through fuel taxes, cigarette taxes, alcohol taxes, income taxes and general sales and/or property taxes. Only the legislature is standing between you and your money going to pay more for more governmental revenue in the form of taxes, fees and fines.

Our legislators are crying out for our guidance. They are sending emails with testimonial opportunity dates, surveys with questions we can answer and reaching out to us on the radio and television. Do you have a perspective on the issues and are you communicating with your representation? Please, join me in responding to their call for our points of view.

Valley Republican Women is holding a budget presentation on Thursday, Feb. 18, at Mat-Su Family Restaurant with a no-host dinner at 6:30 p.m. and three budget-related presentations beginning at 7 p.m. Seating is limited. Presentations on the situation and some suggested solutions will be made at this event. VRW encourages your participation.

Beth Fread is an Associate Broker with Jack White Real Estate. She can be reached at Beth@BethsValleyViews.com.