Friday, August 2, 2013

Short Takes| Getting down to where the rubber meets the road ...

Yesterday afternoon, Alaska House Education Committee Chair Lynn Gattis announced the Speaker’s appointees to the House Sustainable Education Task Force. The task force was created by passage of House Resolution 8 during the 2013 regular legislative session.

The Task Force is Co-Chaired by Rep. Gattis, R-Wasilla, and Rep. Tammie Wilson, R-North Pole/Fairbanks, Chair of the House Finance Subcommittee on Education & Early Development. Filling the slots created by HR 8, members include Rep. Charisse Millett, Co-Chair House Energy Committee, Andy Baker, NANA member, Jerry Covey and David Nees, Educators, and Andrew Halcro and ... me, Business persons.

As outlined in HR 8, the purpose of the Task Force is, among other things, is to examine "the efficiency and effectiveness of public education delivery in the state, including (1) the ability of the state's public schools to prepare students for various rewarding careers; and (2) all aspects of public education funding in the state."

I applied to serve on the Task Force because it is a key place where the rubber is going to meet the road on state budget issues.  As the readers of these pages will know I have written and spoken extensively over the last few years on state fiscal policy.  My concern, shared by an increasing number, is that the state is heading toward a serious fiscal crisis, brought about by unsustainable state spending levels.  As a report earlier this year by the University of Alaska-Anchorage Institute of Social and Economic Research (ISER) put it, "[r]easonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash."

The solution to that challenge is to reduce state spending, now, to sustainable levels.  As the ISER report explains, "What can the state do to avoid a major fiscal and economic crisis? The answer is to save more and restrict the rate of spending growth.  All revenues above the sustainable spending level of $5.5 billion ...would be channeled into savings."  Similar to an individual's 401(k), the savings in turn would create an investment "nest egg" from which revenue can be drawn in future years to sustain state spending when oil revenues are no longer able to do so. 

Education spending currently is the largest consumer of General Fund monies in the state Operating Budget and, even though spending on health and social services is growing at a faster rate, when combined with the University budget education spending will remain so through the end of this decade.  The size and rate of growth in education spending over the last few years has been one of the largest factors contributing to the increase of overall General Fund spending to record and unsustainable levels.  If the state is going to avoid the "economic crash" forecast by ISER, state education spending levels not only have to be stabilized, they have to be reduced.  

Literally, we are at the point where today's spending levels are robbing the state of the ability to pay for even basic education services for tomorrow's generations.

I view this Task Force as being a critical component of the efforts to address the state's fiscal crisis and look forward to participating in its efforts.  We will keep readers updated on its progress on these pages and elsewhere.