Budget surplus is Alaska's best-kept fiscal secret

Spectrum, by Jim Crawford

The best-kept secret in Alaska this year is the $300 million budget surplus just confirmed by the Constitutional Budget Reserve. This secret was disclosed after the close out of the budget. The secret should have been provided to economists and bankers who continually predict the demise of the reserve. The public's distrust is well earned by managers "cooking the books." Secrecy defines the debate of the state's fiscal status. But let's celebrate this budget surplus!

After a decade of inaccurate predictions, the Constitutional Budget Reserve increased from $1.9 billion to $2.2 billion. It should be more by June 30. But every forecast in the budget debate was negative. Not one editor, not one spend-happy advocate disclosed Alaska's surplus. The official estimate until last week was a budget deficit of $55 million. Now we know the truth, a surplus of $300 million.

The Constitutional Budget Reserve was established by the Legislature as a shock absorber for swings in the price of oil and revenues. It is part of a fiscal plan established by the Legislature a decade ago. Then and now, Alaska had excess revenues that conservative legislators did not want to spend. They knew government spending was too high. They were right then and now. Their fiscal plan kept spending steady but controlled.

Their fiscal strategy included parking money in agencies so that it would not be spent. That's how Alaska Housing Finance Corporation and Alaska Industrial Development Authority ended up with $3 billion not needed for operations or bond ratings. Moody's, the Wall Street rating agency, describes AHFC's balance sheet reserves as "exceedingly high." Unnecessary is another equally accurate description.

It's a happy day in Alaska when our budget surplus is confirmed. Next year's budget with historic highs in oil prices and increasing prospects for further resource development could provide equally positive news. With reserves of $2.2 billion in the CBR and $3 billion in AHFC and AIDEA, we can confidently plan for Alaska's future without the need for income taxes, sales taxes or raiding the Alaska Permanent Fund.

That's good news for all Alaskans. Let's pull together, deliver on resource development and deliver on the gas line. Let's use our fiscal strength. No other state in the union matches Alaska's financial reserves or our prospects for an expanding resource economy.

Legislators fully funded education this year and maintained budget discipline even in surplus. Congratulate them and thank them for not putting on an income tax, sales tax or raiding the Alaska Permanent Fund. Those measures, which withdraw personal income from our economy, are unnecessary.

When looking for surplus funds, don't miss the mini permanent funds of Anchorage, Fairbanks and Valdez. Local governments park reserves then demand more money from the state. Towns should not be asking to increase debt when they have millions in cash surpluses. Let's enrich the debate with an agreement that excess funds held by either local or state governments should be liquidated prior to asking for debt or tax increases. Let's celebrate our good fortune and use the money we have on hand.

Spring is a time for renewal of faith in our state and state of mind. We have so many blessings. Let's count them and stop this blood-letting about our fiscal gap. We have many choices and reserves to use prior to any need to raise taxes or raid the Alaska Permanent Fund. Throw a party. Thank your neighbors for having the good sense to elect senators who saw through the phony advice on the fiscal gap and instead chose to stick with their existing fiscal plan. Job well done!

Jim Crawford is the chairman of Alaskans, Just Say No!, a citizens' group opposed to "raiding" the permanent fund.