By JIM CRAWFORD

 Let me say that again: “Alaska is not broke.”  

As a banker in Alaska for about 50 years prior to retirement, I have a time-consuming habit of reading lengthy financial statements, since the devil is always in the details.  

I was most pleased a dozen years ago when I discovered Alaska’s “Comprehensive Annual Financial Report” (CAFR), required by federal law.  The CAFR is the audited financial statement report that shows the actual income and expense and balance sheets of our whole state government. 

The report shows anyone exactly how our Alaska money is managed.  You can find it at http://doa.alaska.gov/dof/reports/resource/2019cafr.pdf.  

Studying the CAFR reveals one truth: managing assets through legislative appropriation is not working. 

Take the POMV (percentage of market value) system that draws money from Permanent Fund Earnings in a convoluted way. We have a standing law on the books that clearly says to Legislators: “Pay the dividend of 50% of permanent fund earnings to Alaskans and you can use the other 50% for government, if you need it.” 

Instead, legislators adopted a different approach, and nine legislators were retired this year in the primary election as a result. Legislators who thought that they could spend our dividends on larger government, rather than follow the formula, lost their right to represent us.  They were wrong, and paid the price for being rebellious public “servants” who forgot whom they worked for. 

After reading the CAFR for fiscal year 2019, I came up with a plan that could manage the assets of the state of Alaska better than now.  The plan is a bridge, because we need the economy not to tank during our rebuilding effort to produce more revenue from increasing oil production on the North Slope.  

There is good news. In addition to our current oil production of the legacy fields on the North Slope at around 490,000 barrels per day, there is another 1,063,000 barrels per day ready to go into the pipeline. In turn, two times more production means multiplying the revenues for Alaska by three.

These are actual oil discoveries awaiting development investments either by infrastructure investors, the producers, or both. Those new barrels of oil solve all our financial problems – if we do not kill the golden goose by voting yes on the disastrous Ballot Measure 1, or chase another producer out of Alaska.  

Defeating Ballot Measure 1 is an immediate action that must be taken for this plan to work. 

So, how do we bridge the few years we need before we produce enough oil to get out of the pickle we are in?  By remembering, “we’re not broke,” and using our strong financial assets to meet our fiscal needs.

Here are some of the state agencies with billions of dollars of overcapitalized balance sheets that can help us through consolidation:

University of Alaska                                       Net position $1,820,190,000

Alaska Housing Finance Corporation            Net position $1,571,423,000

Alaska Industrial Development Corp             Net position $1,374,903,000

Alaska Energy Authority                                Net position $1,543,000,000

Non major components                                  Net position $1,461,757,000

Total available capital                                    Net position $7,771,273,000

What I mean by “overcapitalized” is that each of these organizations have real money on their balance sheets, but do not use this money for their missions.  

How you can tell if it is “overcapitalized?”  If the agency had this money last year and the year before and the year before that – it is overcapitalized.  This growth in government does no good for the Alaska people. Let us put this “lazy money” to work in the Constitution Budget Reserve, wipe out the Legislature’s prior borrowings to the CBR, and invest it or make it available to the General Fund. Solve the budget wars and build our bridge to a very bright future.    

Of course, we still need to shrink state government, but following this simple plan and remaining patient can provide the resources required to get us through the right-sizing process.  

After all, just like the Alaska Permanent Fund, it is our money – Alaskans’ money.  And in the immediate future, we must vote NO on Ballot Measure 1 to preserve the PFD. 

Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage with his bride of 36 years, Terri.  The Alaska Institute for Growth is a local think tank which studies and reports on and may sponsor projects of sustained economic growth for the Alaskan economy.   Mr. Crawford known as the Permanent Fund Defender was a member of the Investment Advisory Committee, appointed by Governor Hammond to plan and execute the Alaska Permanent Fund Corporation.

By ART CHANCE

I went to a fundraiser for a citizens group dedicated to challenging the Municipal Assembly’s decision to close Assembly meetings to in person testimony for a period.  

They have re-opened them, but Mayor Berkowitz still has the dictatorial power to close them at his whim.  

The group is going to sue, and the objective is to nullify all decisions the Assembly made while meetings were closed to in-person testimony.  I support the endeavor and will help them as I can, including reaching for my checkbook.

I was in a discussion with some attendees of some influence, including a sitting legislator, and there was some interest expressed in revisiting the Open Meetings Act statute and using the original “Sunshine Law,” introduced by then-Alaska House member Ted Stevens back in the Sixties as the starting point.   

Uncle Ted’s version didn’t pass and one of its features that didn’t make the final version was a proposed misdemeanor criminal penalty for public officers who violated the Open Meetings Act.   

Most of the early statutes addressing the ministerial authority of the State included penalties, usually misdemeanors, for State officers and employees who violated them. In my time with the State I never saw criminal charges preferred against a State employee for violating some State act, but we all knew they were there. By the Seventies and Eighties criminal penalties for State employees had become unfashionable and most of the later statutes don’t include them.

As I have argued in other writing, it is a fundamental problem with the organizational culture of the State that it is nobody’s job to make sure the State follows its own rules and laws. In my observation the retirement of longtime members of the workforce has left an organizational culture whose only guiding principle is “we’ve always done it this way,” and few State employees have a clue as to their actual statutory powers and duties; they could plow right over laws and not know it.   

The Commissioner of Administration has made some noises about an inspector general function and a fraud, waste, and abuse investigation unit, but to my knowledge nothing has come of it, and it is getting a bit late in the administration to do something and have it survive the next election.

The most difficult task in writing an open meetings law is defining a “meeting.”  This caused a lot of controversy in Alaska and around the Country in the early days of sunshine laws and open meetings laws. It settled down to a grudging consensus that gatherings of public officers that could produce an action that had the force of law were meetings for the purposes of the laws. But there can still be controversy, especially in the executive branch.

It is pretty straightforward in the legislative branch; a gathering that can result in a decision on the passage or failure to pass of a bill, a repeal, a confirmation of an appointment or rejection of an appointee are clearly subject to open meetings laws. 

Legislative caucus meetings held as deliberative meetings that do not result in a decision with the force of law, are not public meetings. This gets some grousing but it is generally accepted. 

It gets to be an interesting question if posed regarding a majority caucus that has the votes to pass the law or take the action. If the decision is made in caucus, taking it to the floor and just voting your majority makes the minority’s votes a mere formality. Fortunately, nobody has ever put that question to the courts to my knowledge.

It becomes more complicated with the executive branch.  Executive branch officers don’t make laws but they do interpret them and they also promulgate and implement regulations. 

Is a division director, a commissioner, and a lobbyist discussing a policy decision over drinks and dinner at the Baranof Hotel in Juneau a meeting for purposes of the Open Meetings Act? Is a meeting of a commissioner and his directors behind a closed door in the department conference room that results in a decision to take an action, a meeting for purposes of an Open Meetings Act? Is a cabinet meeting that results in a decision a meeting for purposes of an Open Meetings Act? These questions have never been seriously asked, although they have been threatened, and I lived in fear of the answer that our liberal and generally hostile-to-Republicans judiciary might give.

I always took the position that formal contract negotiations with the unions were public meetings, and the unions hated it. I knew that once the Legislature, public, and press saw how boring it was, you’d never see them again. That said, I believe all those cozy agreements to keep negotiations closed, limit press contacts to joint releases, and the like are illegal.   

The biggest driver of the cost of government is the cost of labor, and that cost is largely dictated by the labor agreements; the public should be able to see it done. That said, I’ve negotiated the general terms of a whole labor agreement with just the union’s negotiator out on my boat or on a cocktail napkin in a bar. So, I don’t know how you do business if all the business has to be in a formal public meeting. I think the right answer is much like the answer for the Legislature; the only thing that should be public is something that results in a final product.

In sum, I believe we should revisit the aging Open Meetings Act which dates to a time when the only means to appear other than in person was by telephone on a shaky phone system. The attitude toward that was something like the one-time attitude about voting absentee; you needed a good reason to vote absentee.   

As soon as we got a functional phone system throughout Alaska, the Legislature made telephonic participation from the LIOs so that people in the remote areas didn’t have to make a $1,000 or more trip to Juneau to give five minutes of testimony.  

 I believe the closing of Assembly meetings in Anchorage was a product of a combination of arrogant elitism and ideology.  The very last thing they wanted was to have a “horde of deplorables” descend on them and question their enlightened views. 

We need to fix that.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon.