Wednesday, November 20, 2013

The battle over the tennis courts becomes curiouser and curiouser ...

The morning papers reveal that, despite appearances to the contrary as recently as yesterday morning, the vote over whether to use state funds to build indoor tennis courts in Anchorage won't occur during the same month as the Anchorage School Board starts the process of making significant cuts in the city's school budget.  Instead, the vote on the tennis courts has been put off to the Assembly's next meeting, in early December.

Facing a nearly $40+ million deficit over the next two years, the School Board doesn't have the same luxury of putting off dealing with the situation it faces.

The latest reason for the delay appears to be a statement made yesterday by House Finance Co-Chair Bill Stoltze suggesting that Anchorage Mayor Dan Sullivan used "deceptive practices" in arranging for the state grant.  That may -- or may not -- sort itself out before the next vote.

But in the midst of everything else what interested me most about the controversy yesterday was a comment made by Ed Hendrickson, among other things the Vice President of the Alaska Tennis Association.

As I have outlined before on these pages, Hendrickson is a smart guy.  His day job is Chief Financial Officer of Alyeska Service Company, the operator of TAPS.  He is on loan ("seconded," as they say in the trade) in that job from ConocoPhillips Alaska, one of Alaska's major producers and a fairly profitable company as these things go.

Yesterday, in response to an opinion piece by the owner of the Alaska Club about another way for the city to spend the same public money, Hendrickson had this to say:
The Alaska Tennis Association believes that sport and recreation activities produce a healthier population, both physically and mentally, which in turn places less stress on our health care system. Sports also contribute to economic growth through business investment and community employment. 
Essentially, Hendrickson is arguing that the tennis courts should be viewed as an investment, which will produce a return in terms of lower health care costs and also in terms of increased investment and employment.

Really?  Hendrickson's Alyeska resume states that, among other things, "[h]e has extensive expertise with ... economic evaluations [and] long-range planning ...."   If he truly believes that argument he is fully capable of producing an economic evaluation showing the return that Alaskans would realize from an investment in tennis in terms of lower health care costs and increased business investment and employment.

He hasn't.  

Moreover, as one of the the three largest taxpayers in the state, if ConocoPhillips believed that building tennis courts would help to reduce public expenditures elsewhere, I have to believe they would be considering contributing to the investment themselves.  One of the reasons production tax rates in this state are -- and with the upcoming referendum on SB 21 threaten to remain -- so high is because of the current level of state spending.  You would think finding ways to reduce state spending is something that should interest COP and its fellow oil companies.

But, ConocoPhillips hasn't offered to contribute toward the cost.  Instead, Hendrickson -- one of its senior executives -- is arguing that the entire cost should be born by the state.  

While he may fail to see the irony, I don't.  Let me make it clear:  the industry shouldn't be asking for increased state spending -- especially on non-core services -- out of one side of its mouth at the same time it is arguing for reduced state revenues out of the other.  Its time to put up or shut up.  If you want to see this state again become attractive to investors, then help identify ways to lower state spending.  And good lord, whatever else you do, don't add to the problem.

According to the Alaska Dispatch (but oddly enough unreported in the Anchorage Daily News) one of the three suggestions before the Assembly on dealing with the issue is that sponsored by Assembly member Amy Demboski.  Under that proposal, "all of the tennis court money [would be sent] back to Juneau to be re-appropriated for other uses."
“I do not support using the legislative funding for any tennis court project,” said Demboski.
Especially in light of the funding shortfalls being addressed elsewhere in town, that is the fiscally responsible position to take on this issue and my view as well.  If the Alaska Tennis Association wants to take another they should produce a study showing that taxpayers -- including the state's largest investors -- will be money ahead in the future if they spend some of it now.

Until then, I will just continue shaking my head -- and wait for the other so-called "fiscal conservatives" on the Assembly (and most of them claim they are) to step up and support Demboski's proposal.