Commentary: Alaska needs to plan ahead

This editorial appeared in The Anchorage Daily News.

Anchorage Rep. Mike Hawker is pretty perceptive when it comes to Alaska's financial situation. As co-chair of the House Finance Committee, Rep. Hawker led this year's work on the state operating budget, which passed the House last Friday.

That budget allows spending of $9.7 billion – almost $14,500 per Alaskan – while requiring Alaskans to pay zero state sales tax and zero personal income tax. Included in the budget is money to hand out Permanent Fund dividend checks in the neighborhood of $1,500 per Alaskan this fall.

How do Alaskans manage to live this cushy lifestyle of high public services with minimal taxes?

Oil, of course. But as Hawker warned his colleagues, Alaska's oil production is steadily declining. It is just a third of peak production two decades ago.

With oil prices back down in the $40-a-barrel range, the House passed a budget that more or less holds the line on services. There are no huge new programs and no huge cuts. Still it will take more than a billion dollars from reserve funds to balance this year's budget.

"This is a responsible budget but not a sustainable budget," Hawker said during the debate on the House floor. "It meets the needs of Alaska but also needs to be the beginning of a new discussion about what we expect from government and how we are going to pay for it."

To read the complete editorial, visit The Anchorage Daily News.