• Inside this issue
• Our duty as citizens
• Sorry, taxes are not the answer
• Suggestions from Senator Robin Taylor
• Welcome to the international marketplace
• Privatization is a good place to start

Our duty as citizens.

We have been told for years that there is a pending fiscal problem that will have a dramatic impact on our lives as Alaskans. Unfortunately, we have become addicted to what can only be viewed as entitlements and it is difficult to expect our elected officials to have a different attitude than we citizens have.

Let's take a minute and reflect on our state constitution: Alaska State Constitution Article I Declaration of Rights SECTION 1. INHERENT RIGHTS. This constitution is dedicated to the principles that all persons have a natural right to life, liberty, the pursuit of happiness, and the enjoyment of the rewards of their own industry; that all persons are equal and entitled to equal rights, opportunities, and protection under the law; and that all persons have corresponding obligations to the people and to the State. SECTION 2. SOURCE OF GOVERNMENT. All political power is inherent in the people. All government originates with the people, is founded upon their will only, and is instituted solely for the good of the people as a whole. Read these again. Citizens have a natural right to the "enjoyment of the rewards of their own industry." Blessed by oil royalties and investments, many of our citizens have lost sight of "individual industry." Our state government has established a precedence of services and entitlements that are becoming difficult to fund but expected none the less.

The source of government is important and why Common Sense is bringing you these newsletters. " All political power is inherent in the people. All government originates with the people." This means it is up to us as citizens to make the changes we need in government. We have to elect people who will be fiscally responsible and have the courage to make the changes needed. We can't quit with an election. It is critical that we remain involved letting our elected officials know we support their efforts.

Sorry, taxes are not the answer.

Government spending needs to be controlled before taxes can be considered. At the last meeting of the Fiscal Caucus, former state Senator Arliss Sturgulewski urged the taking of small, politically feasible steps for dealing with the state's finances. She is right - dramatic changes to government are difficult to implement. She is also correct that the changes need to be started soon. She is wrong, however, in promoting taxes. Unless we gain control of our spending, taxes will never catch up. Sen. Sturgulewski mentioned the 10-cent-a-drink alcohol tax increase as good public health policy. The truth is that this tax will just augment the general fund. Public health policy can only be advanced through a change in the constitution allowing "dedicated funds." In a flyer distributed during the last legislative session, Senator Sturgulewski pointed out how little of the Tobacco Tax income is spent on health issues. Another idea she promoted is the constitutional amendment proposed by Permanent Fund trustees. This amendment would only limit funds currently available to the Legislature and removes a valuable fiscal planning tool. There is seldom a suggestion to cut the size of our budget or increase efficiencies in our government. At every turn when this idea is mentioned, there is someone who says it can't be done. The list of reasons it can't be done is endless but if you believe them all we will end up in a position where it simply must be done and by then our choices will be severely limited.

The vastness of our state is often touted as a reason for the high cost of government. While this is a factor, the 2000 census shows 433,156 Alaskans live in the Municipality of Anchorage, Fairbanks North Star Borough, Juneau City and Borough and Matanuska-Susitna Borough. Certainly, none of these places could be considered remote and difficult to serve. This 433,156 is out of a total population of 626,932. And a whopping 42% of the state's population - some 260,283 people live in Anchorage.

Transportation and technology should be shrinking government expenses but the effects are not reflected in our budgets. Nothing seems to stop the endless tide of special interests who want to increase their take from the budget.

In an editorial, the Anchorage Daily News described Alaskans as "spoiled trust-fund kids. We expect to get a lot from government and to pay very little. We are takers more than builders." The Daily News concluded with, "This corrosive culture, more than any distant "fiscal gap," is what should concern Alaskans and the legislators they elect. It is why legislators need to put the state on a more sustainable financial footing -- and do it soon." The Daily News is right and that "sustainable financial footing" is a smaller, smarter government.

Welcome to the international marketplace

In the last seven years Alaska has seen a dramatic decline in our timber industry and an alarming slowdown in mining and fishing. Tourism and oil are the only two industries we have that are doing well. Most of the companies dealing in any of these industries have their pick of places in the world to do business. They are in Alaska because it benefits their companies and their company shareholders.

We are competing in an international marketplace and it is quite possible to drive these corporations away. We already have a daunting regulatory process that can add millions to the cost of a project. Random acts of taxation can drive them out of Alaska.

This newsletter is being sent to you because as a leader in Alaska it is critical that you help support strong fiscal responsibility. Fiscal responsibility isn't just a plan - it must be the approach to everything our government does.

Suggestion from Senator Robin Taylor

Dear Chuck: Well at least you and I have remained consistent on the subject of taxation and fiscal restraint. Seems strange to me how many get carried away on the siren song of taxation every time a tough decision has to be made. This next session the big push will be for tax increases on the Oil industry as even the "liberal" Republicans will soon realize that without some growth in the private sector and significant cuts in government, that all of their "little" tax and fee increases won't be enough to pay the bill.

In other words you have to go after really big fish to feed this monster size government of ours. I guess no one really listened to the CPR formula that I came up with a few years ago. It is still the only solution that will work in the long run.

C = cuts and consolidation of government functions; P = Privatize were possible every function of state government. i.e.., DOT maintenance - British Columbia did it ten years ago and now has 27 contracts that take care of all road maintenance in the province, they have better roads and are paying less. R = Resource development and sales, Alberta today has over 50,000 people employed in direct timber related jobs and does this on a timber base that is only 75% of the timberlands owned by just the State of Alaska! In British Columbia one job in every six is timber related. New York State cuts more timber than is currently cut annually on all of the state and federal lands and forests in Alaska.

Yes Chuck we need a good dose of CPR, who knows maybe Common Sense for Alaska could even advocate for such a solution or endorse such a process? I hope Common Sense will continue to advocate for CPR or something like that, as the tax and spend label is not just something that you call democrats anymore.

Sen. Robin Taylor

Privatization is a good place to start

Anybody who has worked on a board or commission knows the frustration of working hard for seemingly nothing as your recommendations collect dust. I want to commend Kathryn Thomas for her efforts and see if we can dust off the suggestions.

Recommendation from Kathryn Thomas For several months volunteer citizens have reviewed the functions and activities of various departments in state government. I've participated in many, many meetings, where I've heard the common concerns and questions from each subcommittee as they attempted to complete their reports. How much does it cost to perform the work or provide the service? How are the overhead and management costs allocated?? All subcommittees reflected a level of discomfort in not having good financial information available to them, something that they commonly use as management tools in the daily operations of the business world.

There second concern was if their effort and time would be in vain. Will Alaska have the ability to recognize, acknowledge or implement their efforts?

These are the same concerns that we have on the Commission; Was the budget and cost information adequate for us to make well informed recommendations? How do we go forward and complete our report? What's our Strategy? As I've given considerable thought to the concerns of the subcommittee members and my own concerns as a Commissioner. I have focused on the development of a future strategy for privatization, outsourcing, managed competition and delivery of services in an efficient, economical method. I am forwarding to the Commission the following recommendation. Check out the complete document here.