The first session of the 24th Legislature just ended. Not surprising, we again spent too much, and passed too many bills adding to the bureaucracy. But this is Juneau, where there is a long history of overspending and creating more government.
This session, I observed Municipal League mayors beseeching the Legislature for tax dollars, and public (government) T.V. and radio broadcasters demanding government money to compete with privately run stations. The list seemed endless. A parade of supplicants argued their particular need for unearned money was greater than anyone else's and that if their demands were not met, children would suffer, the sky would fall or the moon would leave earth's gravity.
Those pleading their case for government money came to Juneau at a prodigious rate during the 2005 session. In my 11 years in office, I have never witnessed so many special interests asking for more, never having enough for their "essential" programs.
Why the increased requests? For the last several decades, state government has swelled while producers have gradually been ratcheted into a less productive mode. The operating budget has ballooned to over $8 billion dollars, a 3000 percent increase since the late 1960's, including over a quarter billion dollars more than last year. Over time, unions have managed to negotiate guaranteed, generous retirements for over 90,000 ex-government workers, that now have Alaska taxpayers in a $5 billion hole. This will likely be paid for with new taxes or spending the Permanent Fund, both of which I oppose. Pouring government dollars into an economy does not create wealth; it only redistributes what others have produced. As state government continues to dominate Alaska's economy, the private sector is being squeezed into a weakened second-class status.
As the private sector struggles forward, the average Alaskan is earning lower wages. We've evolved into a "Wal-Mart economy" over the last decade with lower paying service jobs replacing high paying oil industry jobs. At the same time, government has picked our pockets with new taxes and fees to make up for lost revenue. The economy is now beginning to show signs of serious strain. It reminds me of a dam that is cracking and starting to leak.
Special interest legislation has made the private sector a difficult place to produce. House Bill 81, passed by the House this session, was typical of one special interest group's effort to eliminate or seriously restrict others through force of law. Homebuilder organizations are not pleased that "handymen" vigorously compete with them, so they hired lobbyists to help pass legislation to restrict these pesky nuisances. Only two of us opposed the bill. The so-called "Friends" of Mat-Su ran shallow gas drillers out of Alaska with campaigns of emotion and great exaggeration. Environmentalists are now after Point MacKenzie's wood chip industry.
If this economic metamorphosis continues downward, (with more government laws, fees, prohibitions, controls), producers will no longer be able to sustain themselves under the weight of a government behemoth.
The sad part of this government-induced economic slowdown is that as people become more desperate, Juneau will probably overreact by further micro managing the economy with even more restrictions and regulations, trying to help. However, it will only sink us more economically. I have repeatedly made these points in public, in private discussions, in newspaper columns, but usually get a roll of the eyes.
This trend is not unique to Alaska. Washington State has an identical financial problem, except it has no North Slope to lean on. United Airlines and many other large corporations such as Ford and GM are on the verge of bankruptcy because of years of government controls. They are seriously considering reducing their employees' substantial benefit and retirement packages. We know what the answer is to revive our economy. Scale back government, and get it out of the private sector and out of our lives. Let government do only what it is constitutionally required. Let people prosper in the searing, but honest test of open competition. Let entrepreneurs go first to their imaginations instead of rushing to hire a lawyer, and our vast and beautiful state will rebound with strength and prosperity.
If we continue with government operating as a father figure, we are doomed. We can turn this around quickly if we phase out much of wasteful government...starting with the "Division of Administrative Services in the Department of Administration!"
Vic Kohring represents Wasilla and the Mat-Su in the Alaska State Legislature.
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