Oil wealth plans; OK, we've got a lot of money, now what do we do?
''Statehood was about the worst thing that happened to Alaska.'' Cliff Hudson , a bluff bush pilot, takes another bite out of a taco and glances out the window of his Talkeetna home, not far from the snow-shod foot of Mt. McKinley.Skip to next paragraph
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Though his eyes follow a bird pecking away at a slab of bacon on the porch, his thoughts are more on an Alaska unencumbered by rules, regulations, and man. ''Statehood,'' he says, retrieving his complaint, ''has brought taxes, politicians, and more people.''
Alaska is no place for understatement. Passions here run as deeply as the permafrost about subjects ranging from hunting rights to highway building.
Today the swirl of frontier politics surrounds what to do with the biggest booty in Alaska's history--oil revenues from Prudhoe Bay. The battle of the revenue bulge grips everyone, from trappers to taxi drivers. It is a debate the rest of recession-pinched America would love to indulge in.
To some environmentalist ''greenies,'' more money means more people tromping around the woods. They'd just as soon see the oil stay in the ground. At the other extreme are the ''boomers,'' who would like to see the oil riches used to underwrite a great industrial leap forward.
Until recently world oil prices had ratcheted relentlessly upward, allowing the state to excite--but not please--almost everyone. The budget ballooned from Legislature often left clutching funds for favorite projects.
At its most extravagant, one lawmaker suggested the state bail out Chrysler Corporation. ''There was a sense that there was enough money to do everything,'' says Rep. Hugh Malone, a land surveyor from Kieni. ''You didn't have to fight with anybody--you just said yes.''
The Detroits were green with envy, if not crimson with anger. In fiscal 1979- 80, the most recent year for statistics, total state and local spending in Alaska (per $1,000 of personal income) ran four times the national average and more than double the rate of the next biggest spender, the District of Columbia. This year, even after slimmed-down revenue projections, the state will have more than $4 billion in its till--close to $10,000 for every person. Yet Alaska is shifting anxiously as world oil prices, and thus state revenues, drop.
With revenue estimates for 1982 and '83 down $3.7 billion from what was expected just nine months ago, funding strategies are sharpening. At least two broad approaches prevail: build up a tidy nest egg for the future, or spend now on capital improvements (such as roads and sewers).
One widespread concern is government bloat. If state operating expenditures continue to clip along at their present rate, Alaska will slip into the red by 1990. Ironically, although ''Seward's Folly'' is a bastion of rugged individualism, government has long been a big business: 40 percent of the jobs here are tied to federal, state, or local government.
A number of leaders, including Gov. Jay Hammond, who can't run again in November, are pushing for a limit on state spending. Voters will take a crack at one such ballot initiative this fall. At the same time, however, the governor would like to see some oil wealth handed directly to the people, letting them decide how to spend it. His approach is to pay residents a yearly ''dividend'' out of the permanent fund, the state's savings account.
This strategy, at press time being challenged before the US Supreme Court, would give more money to longtime residents (''Sourdoughs'') than newcomers (''Cheechakos''). Critics argue this will only lead to a one-night spending binge, fueling inflation but little else. Lawmakers are also squabbling over how much to set aside in the fund. In recent years the state has supplemented its required allotments--one-quarter of state oil royalties--with large appropriations.
But in these ''austere'' times some would like to reduce the outside giving. Currently holding a tidy $3.1 billion, the fund should grow to at least $20 billion by the end of the century--yielding the state, even at modest rates of return, more than three times the amount it used to collect in income taxes each year.
On the other hand, the idea of pouring massive sums into railroads, ports, dams, and other ''infrastructure'' to encourage private development draws fire, too. Some argue that this would just result in the ''subsidizing'' of uneconomic industries, many of which wouldn't create a lot of jobs anyway. Moreover, some lawmakers are wary of building facilities no one could afford to keep up.
''Even if you're building monuments--carving out Mt. Rushmores--someone has to eventually polish the marble,'' says Thomas Williams, state revenue commissioner.
Former Gov. Walter J. Hickel, considered a ''boomer,'' says tax money should be used to run the government and other revenue to spur private development. ''It takes the accumulation of capital to do what hasn't been done,'' he says.