Brennan: Could common sense work?

By Tom Brennan |

Online publisher and radio personality Brad Keithley raises the question of whether Alaska’s economy is improving or just getting worse more slowly. The answer, of course, is yes.

The economy is improving, at least in comparison to its recent depths, but the boom days of peak oil are gone for good. I’m not arguing with Brad. I’d lose. But it all depends on how you look at things, especially the things that you can change.

The future for this state’s oil industry looks strong, especially with development underway on major finds in the National Petroleum Reserve and future development on the coastal plain of the Arctic National Wildlife Reserve seeming likely.

If both areas meet their highest expectations we can expect oil to play a major role in the state’s economy for decades to come, hopefully until the world wends its way through the carbon age. Meeting those expectations will, of course, require that state and local governments exercise restraint both in taxes and in their own growth.

Keeping down the growth of government at all levels will be essential. In the past, spending has gone wild whenever revenue levels allowed — and that has given this state some very expensive tastes. We have entertained mega projects that could never make economic sense and spent huge amounts of money on them.

I’m not talking about Gov. Bill Walker’s gas pipeline, but that thing could still prove to be a boondoggle. I’ll reserve judgment on that for now. A large market does exist in Asia and perhaps we’ll be able to tap that. Key decisions are still to be made in places like China and Washington, D.C.

One thing that we can and should control is government growth. It will be difficult because there are increasing needs in areas like crime control and even health. Among other things our population is growing older. Meeting such challenges will require an approach focused both on the need and the state’s ability to pay.

I made a proposal sometime back for a state hiring freeze and I still think that would go a long way toward solving the problem. Don’t fire anybody or lay anybody off just to meet this goal — unless the individuals just can’t meet any state needs.

Doing this would require an ongoing reassessment of each department’s employee requirements, reassigning and retraining people as necessary to cover normal attrition. But do not add to the state’s hiring rolls. Keep what you’ve got and reallocate the resources as best you can. Only bring in new people if they have a specialty you need and don’t have.

Over time this approach should result in downsizing of the state bureaucracy, which has grown tremendously when oil money was flowing. The government workforce grew to take advantage of revenues available, and it met the public’s demands for services. Government employment is now too large for available revenues.

It seems to me state leaders need to loosen the borders between departments and move capable people to positions that are needed and that they can be retrained for, wherever they exist. Some services will need to be curtailed or handled differently to account for the diminished human resources — but the public will have to bite the bullet on that one and go back to the size government we had a relatively few years ago.

The classic example of misuse of state revenues just because they were available is the plush Legislative Information Office building constructed at state request in Downtown Anchorage. The Legislature walked away from the lease when revenues went south and other space opened up in a Wells Fargo building in midtown.

The Downtown LIO has sat empty for about two years. The owners, who built the place to state specifications, have sued the state for the $37 million they put into the building. The Anchorage Community Development Authority has purchased the building and will lease it to the Anchorage Police Department for a new headquarters. Who zapped who in that deal is an interesting question and it’s a positive development that the building will now be put to good use, but it seems a perfect example of government overreach based on poor judgment.

Surely a change to good judgment can get us out of the government’s looming hole. We have the makings of a strong economy, with oil as a major element but with other segments of the business community growing as well.

I may be naive but surely a common sense approach to government spending could work — even here.

 

3 Responses to Brennan: Could common sense work?

  1. Randy S Griffin Fairbanks Alaska August 5, 2018 at 9:56 am

    Common sense (like not hiring unneeded personnel for state government, and not spending on uneconomic, wasteful projects, but, yes, allowing personnel to transfer and train for other departments where they are needed) is possible if more of the citizens become more enthusiastic and supportive of common sense.

    In past years many citizens could care less about such matters, because wastefulness in government did not cost them anything. In fact, they might have gained from wastefulness, because they may have caught some of the drippings.

    But Alaska has now entered a new window of opportunity for encouraging citizens to support common sense. In the last couple of years. the amount of the Permanent Fund dividend payout has been in a state of flux as the legislature struggles with the needs of vital government services (education, roads, public safety) within the environment of severely reduced revenues coming to the state.

    As citizens become aware that the size of their PFD is dependent on the amount of common sense that is applied to government spending, then they will become enthusiastic proponents of common sense.

    The worst thing in the world, would be to enshrine the present fixed statutory formula for determining the size of the PFD into the Alaska state constitution. This would cut the present and recently acquired link between the size of the PFD and what goes on in the rest of the state government. The old fixed statutory PFD formula is only linked to the last 5 years of earnings of the Alaska Permanent fund. It has almost no linkage to how well or how poorly we manage our state budget. So, if we go back to the old PFD formula, many people will go back to not giving a hoot as to how the state budget is managed.

    Putting the old PFD formula in the Alaska constitution will virtually guarantee the imposition of a state income tax, and the morphing of the PFD, from a true and honest dividend, into an income transfer welfare payment. The people who will pay a state income tax will care about applying common sense to state spending, but not the masses of people who will pay very little or no state income tax. All they will care about is getting their free PFD money and other benefits from the government.

    If the PFD is enshrined in the Alaska constitution, masses of immigrants and others with their hand out will flood into Alaska. Crime will continue to surge in Anchorage.

    There is nothing wrong with immigrants as long as they are industrious and contribute to society.

    Enshrining the PFD in the Alaska constitution will destroy Alaska.

    Reply
  2. Lee Jordan August 5, 2018 at 12:31 pm

    My friend, greed and power override common sense every time. Lawmakers are politicians whose ego demands they must be voted back into office. Special interests that profit from bigger government help their allies win. Sound ideas such as you outline just don’t fit the mold as it is now fashioned. All we can do is pray that common sense will some day again come to the fore.

    Reply
  3. Morrigan August 5, 2018 at 9:28 pm

    Respectfully disagree.
    .
    The size and scope of Alaska’s 2018 Lobbyist Directory alone should suggest a common-sense approach to government spending may have gone extinct generations ago.
    .
    The secret prenuptials between Alaska whose government can’t control its crime wave and Communist China whose government started a Social Credit Score to control everybody suggest we’ll need much more than good judgment to escape the looming hole awaiting us on our present course.

    Reply

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