Fund use may be the answer, but it raises questions

April 15, 2005

Frontiersman editorial board

It is with very mixed feelings that we give a qualified pat on the back to the Alaska Senate for its vote Wednesday to use earnings from the Alaska Permanent Fund to help pay for the renovation and construction of public school and university facilities statewide. Equal parts courageous and politically suicidal, the decision's final worth will be judged by voters, who had no part in the crafting of the legislation.

When asked about possible use of the permanent fund to pay for government in an expensive, taxpayer-funded election in September 1999, some 80 percent of voters statewide said the fund could not be touched without a vote of the people. Despite the vote, cynics suggested that leaving a pile of money the size of the permanent fund in front of politicians and telling them not to touch it was akin to putting a plate of cookies in front of children and telling them not to touch. It took five and a half years, but it appears the cynics were prophetic.

To be fair, the $344 million draw on the permanent fund's earnings reserve account proposed in Senate Bill 155 will have minimal impact on dividends. But it remains to be seen if this is just the opening course in a legislative feeding frenzy at what was set up to be the public's banquet table.

There is no doubt that the money is being put to use wisely, in a way that will benefit everyone, directly or indirectly. So we applaud the bill's intent, and find this manner of funding far preferable to a new tax or bond issue. But it's still hard to accept that the will of Alaskans about the use of permanent fund money was summarily disregarded.

Senators who voted in favor of the proposal - 13 out of 20, from both sides of the aisle - justified it by saying they were elected to make tough decisions. We couldn't agree more. Alaska's fiscal ship has been tossed too long on the uncertain waves of oil revenue. A more stable, visionary course is long overdue to be charted.

Those who oppose the bill on the grounds that the current price of oil is supplying enough revenue to fund the proposal need to remember the fiscal crisis the state faced a few short years ago when the price of oil dipped below $10 a barrel.

But the contention of senators that putting the proposal to a public vote would result in unnecessary "demagoguery" is nearly laughable considering all the promises, platitudes and political chest-thumping that accompanied the "Vote No" campaign in 1999. One of the loudest proponents of permanent fund protection - Mat-Su's own Lyda Green - turns out to be a co-sponsor of SB 155.

Our other senator, Charlie Huggins, voted against the bill. The proposal goes to the House next, where Reps. Vic Kohring, Carl Gatto, Mark Neuman and Bill Stoltze will weigh in on it. Residents who feel the need to express an opinion should contact their legislators soon, as the session ends May 10.

If the bill clears the House, it still could be vetoed by Gov. Murkowski, who campaigned in 2002 on a promise to not tap fund earnings without a public vote.

The Senate proposal is an important matter that requires careful consideration by all residents. Our school district stands to gain more than $37 million for the construction of three sorely needed elementary schools, plus additional funding for capital improvements around the district and for Mat-Su College.

But there is also a question of accountability that, as with all matters of government operation, requires great vigilance on the part of we, the represented. Weighing this may be most difficult of all.