BUDGET CHALLENGE PROVIDES OPPORTUNITY

Alaska offers big challenges and great opportunities. That is true whether you are fishing Bristol Bay, drilling on the North Slope, or working in Downtown Anchorage. It is also true with the state budget -- our current budget challenge contains the seeds of opportunity. We have the challenge of reconciling low oil prices with the impact these prices have on government spending -- we are roughly $1.2 billion short on a $2.3 billion general fund budget. We have the opportunity to develop and implement a budget process that serves the twin requirements of fulfilling state obligations and fostering a strong, stable economic climate. With creativity and courage, we can wean ourselves off the boom and bust uncertainty that results when oil markets dictate budget revenue.

Even still, no one wants to be in this situation. No one likes taxes and everyone is leery of using Permanent Fund earnings. We all wish the price of oil would regain robust health. Also, the budget has seen real dollar cuts for six years running, and it has not been adjusted for either inflation or population growth. No one who has studied the budget suggests we can cut our way out of this hole -- if there were large cuts to be made, they would have been made. Obviously, we will continue to hunt for areas that can be responsibly cut, but we must move past the focus on cutting and shift our focus to building.

It is time to build because a budget means more than numbers on paper. It represents real services, real jobs, and real money -- it is our roads, our schools, our Troopers. The budget reveals the level of support we show for infrastructure, for public safety and for education. These state "expenditures" -- more accurately "investments" -- permit us as individuals to make the most of our opportunities. We need roads, airports, and ferries to get our goods to market. We need good education not just to prepare for a world rapidly changing with technology, but also to insure that our students can compete on the fundamentals. Our ability to prepare for the future is jeopardized when we focus on cutting the budget instead of achieving quality government. That is why we have to shift our focus. Government is like anything else we buy -- quality is at least as important as price.

Moving from the premise that a certain level of government is necessary for life, liberty and the pursuit of happiness leads to the reality that we have pay for it. Unfortunately, the price of oil is so low that our shock-absorber savings account -- the Constitutional Budget Reserve -- will be depleted in short order. We are running out of easy money. To date, Governor Knowles has advanced the only legislation to solve that problem: part budget cut, part income tax and part excess earnings from the Permanent Fund. While the Governor's proposal may become the solution, or provide the skeleton for a solution, it is important to emphasize that his proposal is merely one proposal and does not relinquish the responsibility of other Alaskans to explore other solutions.

To that end, the House and Senate Democrats are initiating a series of conversations about the budget. We invite all Alaskans to join us in Legislative Information Offices around the state as we engage economists, business leaders and budget experts in conversations seeking a long-term solution to our budget crisis -- contact your legislator for a schedule of events. These conversations are intended to complement the effort begun with last month's successful Economic Forum. There, business leaders made two pleas to the legislature -- act now, and do it in a bipartisan way.

We have begun to act and are starting the decision-making process. At this juncture, we must put aside personal biases, think about options and listen to what Alaskans are telling us. Many people and organizations have developed sustainable budget plans -- the Rose Plan, the Rieger Plan, the Cremo Plan, and the Long Range Fiscal Plan, to name a few. Another such plan may even emerge from this legislature. Our obligation this session is to move forward, to debate, and adopt a sustainable budget plan.

I hope that when the dust settles we will have reached a decision that we can take pride in -- both in the substance of the proposal and the process by which we arrived at it. If we exercise the bold, innovative thinking that led to the creation of the Permanent Fund, we will find a way through this thicket. Tough times bring out the best in our character -- and we will need the best in our character to put together a solution that satisfies the interests of all Alaskans. It is a big challenge, but, as Alaskans, we have the opportunity to emerge from this adversity stronger than when we went in.

Phone: 1-888-465-4919 (toll-free)
Fax: 1-907-465-2317
E-mail:

Representative_Ethan_Berkowitz@legis.state.ak.us

Web page:
http://www.akdemocrats.org/bios/berk.htm

Snail-mail:
Representative Ethan Berkowitz
Alaska State Capitol, Room 404
Juneau, AK 99801




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