Economic realities __________________________________________________
alaskanabroad.typepad.com
From Sen. Kim Elton's newsletter, Off The Record:
My legislative colleague from Anchorage, Republican Rep. Ralph Samuels, gave fair warning as he began his Alaska economic assessment speech to the gathered conferees. You are not, he said, going to like what I'm about to say. And nobody did.
But I'm not arguing with his assessment.
In my words, his assessment can be summarized by noting that irrational hope amounts to a dumb economic strategy and high oil prices hide an immutable truth. Strip away high prices for a volatile commodity and we have to acknowledge that oil production is declining, a gas line is iffier than we want, and--even if some entity agrees to build a gas line--it won't be built in time for a smooth transition from an oil economy to a gas economy.
It's a hard message for a person who depends upon the goodwill of voting constituents to make because no elected official wants to outline a problem in which the only solutions are: 1) raise taxes; 2) cut services like education and roads; 3) use permanent fund earnings; or 4) come up with a devil's brew of the first three.
It is time, right now, for the legislature and governor to revisit the Percent of Market Value approach to managing our $38 billion Permanent Fund. With the POMV, we can protect the corpus of the fund, pay a constitutionally-protected dividend, and cushion the coming revenue crunch.
September 23, 2007 | Permalink |
