An unlikely coalition of Alaskans, ranging from business and union leaders, to Alaska Native Corporations and past politicians, are launching the Alaska’s Future campaign. The initiative is promoting long-term solutions to the state’s fiscal crisis, and the group says the Permanent Fund needs to play a crucial role.
GCI CEO and Alaska’s Future co-chair Ron Duncan says the state’s $3.5 billion-plus budget deficit is a problem that needs solving sooner rather than later.
“What I concluded was that if the legislature leaves Juneau this year without fixing at least half the problem, we’ll have to stop investing,” he said.
Duncan says GCI has plans to spend more than $220 million dollars building capital facilities in the next year, which would bring high-speed broadband internet to over a dozen new villages. But, if lawmakers don’t fix the fiscal crisis, Alaska could be facing a dramatic population drop — which he estimates to be pushing 25 percent. In that scenario, he predicts — crashing property values and limited state services.
He says that could affect whether GCI and other private sector business invest in the state.
“When we and other private investors stop investing, you’ll have a recession triggered by the private sector,” Duncan said. “And anybody who can look ahead is gonna understand that you can’t continue to expand to put new capital in, to hire new people when the economy is on the verge of collapse.”
Duncan says all paths to bridging the budget gap appear to point toward using some portion of the Permanent Fund earnings reserve. But, touching the fund is generally viewed as politically unpopular.
“Since that seems to be the largest-single political impediment to getting the problem solved, that we should try to build an extremely broad-based coalition to say, ‘It’s OK to use the Permanent Fund,'” Duncan said. “So I started with the people who would be the least likely to agree with me on any other issue.”
One of those people was Vince Beltrami, president of the Alaska AFL-CIO labor union organization. Beltrami’s first job with the IBEW was as an organizer, where he attempted to unionize a large group of Ron Duncan’s employees.
“I was really alarmed that he actually contacted me out of the blue, but it just spoke to how big of an issue this is,” he said.
Beltrami says there’s only one major piece of legislation that is key to solving the state’s budget issues – one tapping the Permanent Fund’s earnings reserves. If it’s not passed, he says once the state’s budget reserves are depleted, the Permanent Fund could be gone shortly thereafter.
“I’m worried, not only for the workers I represent in the state of Alaska, for their jobs and our home values and the future, but that we have a strong economy where our children and our grandchildren will benefit and will also have the same opportunity that we’ve had – educationally, economically – in the state and that they’ll also be able to continue to receive a permanent fund dividend into the future,” Beltrami said.
So, essentially, the group says the state needs to tap into the fund in order to save the dividend.
NANA president Helvi Sandvik says that sustainability along with a strong state economy is especially important in rural areas, where there are few private sector jobs and residents rely heavily on state services.
“In rural Alaska, I see friends and family pooling their money, so that they can afford to maybe buy a snowmachine, so that they can go out and go hunting, or they can maybe afford to buy an outboard motor so they can afford to go fishing,” she said. “So, those PFDs really make a meaningful contribution.”
Aside from GCI, union groups and NANA, the Alaska’s Future coalition has other supporters like CIRI and former-Governor Tony Knowles, among others.
Anchorage Democratic Representative Les Gara says he welcomes all ideas when it comes to fixing Alaska’s fiscal problems. But, he questions the group’s hiring of two national conservative campaign workers, Michael Dubke and Ben Sparks. Sparks, the group’s executive director, helped elect Dan Sullivan to the U.S. Senate. Gara is concerned the partisan past of both men could undermine a collaborative political process in the legislature.
“These guys are gonna say that they’re not gonna work on campaigns, but if you look at their resumes, everything they’ve ever done is to use millionaire and corporate money to attack people in campaigns – that’s their talent,” Gara said. “So it’s really very curious why anybody thinks they have anything to lend in terms of helping us understand our fiscal problem.”
And, Gara says, the Permanent Fund is only part of a solution to that fiscal problem. That is a point GCI’s Ron Duncan agrees with.
“The Permanent Fund only solves the first step of the problem,” Duncan said. “That fills, at most, $2 billion of what, by the time the session ends, will be a $4 billion gap. We need targeted cuts; we need new revenue measures; we need to do other things as well. But, if we don’t do the Permanent Fund first, we might as well not worry about those other things because they don’t make any difference.”
Duncan says the group isn’t pushing for any one piece of legislation over another, as long as the legislature ultimately takes steps to correct Alaska’s fiscal crisis.