Introduction   ·   Proposal   ·   Constitution

Present System    ·    Proposed System (Endowment)    ·    Proposed System (Transition) 

Present System Notes · Proposed System (Endowment) Notes · Proposed System (Transition) Notes

 

FISCAL VIABILITY FOR ALASKA

Introduction

An early bargain, struck by Seward and

A Russian king, bestowed on us this land

Where we can live with whale and bear and tide,

And sleep beneath a sun that cannot hide.

 

Unsatisfied, we griped until the day

That statehood’s passage ended fed’ral sway.

Before that boon, things never had been right,

'Cause distant rule's as bad as rule by might.

 

Foundation laid, we turned to work and play.

But now we know there's one more stone to lay:

Without a full and steady flow of cash,

It's certain that our government will crash.

 

O there's the wealth that Prudhoe’s wells provide,

But how to end this roller coaster ride?

Look not too far — the answer's here and plain:

Just spend of the wealth what it will sustain.

 

And what if there's a need for more?

Some vital charge we can't ignore.

Well then it's time for us to pay

The dreaded tax, or face decay.

 

 

A great gift came along with the grant of statehood to Alaska. Knowing that its government, unlike that of other states, could not raise enough money through taxation to fund operations and capital improvements, Congress made Alaska wealthy by providing it with land that contains oil and gas.
"Money is with propriety considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions." Those are the words of Alexander Hamilton in that classic treatise on government, "The Federalist". He went on to warn us that unless a government’s supply of money is both "regular and adequate " [emphasis added] it will “sink into a fatal atrophy, and in a short course of time perish".  
Our government’s supply of money is anything but regular and adequate. A major component of it, the money that derives from the sale of oil and gas to oil companies and from taxes on production of that oil and gas, is received in installments that fluctuate uncontrollably and in some years are inadequate. What's more, they eventually will end.
Alaska’s greatest need is substantial and sustained spending by government on its essential functions. Therefore, it is absolutely necessary that revenue be adequate and sustainable.
If all of that oil and gas money were invested, systematic withdrawals from the growing investment fund would be reasonably sustainable in all but the worst of market conditions. And to the extent, if any, that such investment revenue were not adequate, it would be supplemented by conventional revenue. No longer would the state's foundation lack that indispensable stone,  

   

 

 

Introduction   ·   Proposal   ·   Constitution

Present System    ·    Proposed System (Endowment)    ·    Proposed System (Transition) 

Present System Notes · Proposed System (Endowment) Notes · Proposed System (Transition) Notes