Letters from the Editor – Failing, flailing

As I write this editorial our student government’s leadership is in Juneau, trying to convince the state legislature not to slash funding for the University of Alaska. It’s a noble effort, but I suspect they’re seeking support from the wrong people; they might have more luck petitioning Yahweh, Vishnu or a deity of their choice. The state budget is barreling toward an economic brick wall–and nobody in the capitol is willing to hit the brakes.

It’s easy to get wrapped up in the worries of cuts and reductions–they’re a threat our school has faced more or less since its founding. But it isn’t just the UA system that faces an existential crisis anymore, it’s the State of Alaska as a whole. The operations of our government, and by association our university, are based on a revenue system that can no longer function.

There are some who believe, given the rhetoric of the new national leadership, that a renewed emphasis on hydrocarbons will bolster the state’s finances. The uncomfortable truth is that cheaper sources like natural gas, combined with the reduced cost of renewable energy sources, indicate that the royalties and taxes charged on oil leaving Alaska will not be enough to keep us afloat.

Even with such a regressive approach to energy production, Alaskans will not be the people to benefit. Production costs in the 49th state are much higher than other oil fields in North America, much less in the mideast. If completed, the Keystone and Dakota Access pipelines will be filled with Canadian, not Alaskan, oil. The environmental deterioration of climate change will continue to ravage our shores and habitats, but we’ll be lucky to see even a fraction of the fiscal benefits.

Our legislators, meanwhile, are ignorantly optimistic about the future of hydrocarbon production in the state. Unwilling to consider income or sales taxes that might lend a modicum of stability to state budgeting, they cross their fingers for a price upswing in the next couple years to bolster their fortunes, playing chicken with a sea change that is not a matter of “if,” but of “when.” No, the legislature has little concern for the long-term ramifications of the state tax system–ramifications that will be faced by our generation and those to come.

Though I hope to be proven wrong, I’m willing to bet the next several years are going to be extremely painful for the state. Without new revenue, the house and senate will override our besieged governor and drain our available savings without any means of replenishing the wells. State services will be cut to the bone, then discarded, without making a significant dent in the size of the deficit. Then, when the situation could be no more dire, they will ignore the cries of their constituencies and gut the Permanent Fund, effectively cooking the golden egg-laying goose and making the future measurably worse for Alaskans.

It doesn’t need to be like this. With a little pragmatism, the legislature could implement taxes that spread the burden between residents, visitors, military and outside workers alike. A willingness to discuss new income could reverse our governmental fortunes. It’d be a painful choice in the short term, but taxes could help us save our state’s remarkable capital resources, which would continue to steady government and enrich citizens well into the future.

But, even with my limited knowledge of Alaska history, I know better than to hope for such sensibility from the Capitol Building. So godspeed to our intrepid student and university leaders, but it might be easier and just as productive to start praying.

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1 Response

  1. Earl Richards says:

    The big three, oil corporations are doing very well, because the former Chief Executive Officer of ExxonMobil, Rex Tillerson, now Secretary of State, retired with a retirement package worth over $180 million.

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