From the perspective of the community where the state ferries’ headquarters is located and the region severely affected by the ferry system’s decline, confidence in state leaders has waned.
Not just the leaders of today, but the leaders for the past couple of decades.
Over that time, the state studied the Alaska Marine Highway System to near death. AMHS changed course with every administration, wasting millions of dollars and time that cannot be regained.
Experts on ferries and ferry systems — for the most part — were ignored.
It’s hoped leaders aren’t about to follow that example with state finances.
Like with the ferry system, both the Walker and now Dunleavy administrations, have addressed these finances. And like the ferry system, experts are speaking up about the Alaska Permanent Fund and the future of Alaska’s fiscal well-being.
The trustees of the fund’s corporation are sounding the alarm bell that Alaska is positioned with a 50% chance of a fiscal failure within the next 20 years, according to an Anchorage Daily News article late this week.
The trustees, who hold apolitical positions, are recommending two possible solutions to the state Legislature and Gov. Mike Dunleavy.
They infrequently, over the past 44 years since the fund’s inception, have offered suggestions.
The trustees’ analysis shows that the $66 billion fund is vulnerable regardless of market conditions. The fund provides dollars for both the permanent fund dividends paid out in the fall and government services. Moving forward, state law would require a larger dividend than statutes allow for in good times. In bad times, the dollars for expenses paid through the fund would be insufficient.
The trustees are recommending — without preference — one of two solutions. The first would combine the two accounts of the permanent fund, one of which is currently constitutionally protected from expenditures and the other that is applied toward PFD’s and government services. The second would require that the funds for PFDs and state services be maintained sufficiently using permanent fund dollars to cover their expenses.
A constitutional amendment to accomplish the first has been proposed in the House. Twenty-seven of 40 House members and 14 senators would have to support it, along with the governor and voters in the fall election.
It is the most complicated to execute of the two options, according to permanent fund officials. But it also is least vulnerable to politics. The second option would allow greater spending by legislators and governor of the day.
Neither of the two options affect the amount of PFDs.
The trustees, armed with their analysis of the situation and their expertise, have made their suggestions to the politicians.
It is imperative for Alaskans that they adopt one of the options and that it is done soon. This shouldn’t be allowed to become a repeat of how the ferry system was handled. Or not handled.
Without a decision between the two, the state has a 50-50 chance of going down with the ships.
The House proposal appears to be the most fiscally prudent. But, like the trustees suggest, chose one or the other. Just choose.