Balance Of Power

Contributed by Wes Keller

Our ignorance of the Alaska Constitution is ultimately causing our fiscal mess! The Alaska Constitution was designed with noble, transparent intent to establish an abnormally strong governor, in part to protect us from the ever-overreaching landlord - the federal government. Also, it was presumed a strong, administrative government was needed to develop an infrastructure designed to fairly serve widely dispersed and diverse Alaskans. 

Success on these two counts is an open question, but there is unsettling evidence showing an extraordinarily strong governor has resulted in an abnormally influential executive branch with a huge appetite and correspondingly weakened legislative branch! 

This reminds me of the old cartoon duck character, Baby Huey, but it’s no laughing matter if Baby Huey is demanding and formidable when its food supply is threatened! Predictably, the weaker legislative branch is unable to do its part. Any vacuum in legislative leadership is automatically filled by the executive or judiciary branch in a declining spiral. 

The Alaska Constitution was ratified in 1956, and authorized a novel ‘tax’ to pay for the government it created. It is not called ‘tax’ in the constitution, but it is a tax by definition. (See for more on this.) 

The 75% revenue gets spent just like tax revenue in other states and avoids political debates usually surrounding tax legislation. This constitutional revenue provision avoids much of the discomfort of competition between special interest groups in times of plenty, but it has created unrealistic spending expectations. Alaskans need to understand and remember what it means for Alaska’s natural resources to be commonly owned and ‘taxed’ before they allow for the expansion. 

If all natural resource revenue had been constitutionally taken the same way as the 75%, we would have clearly established a government patterned after classic communism! Instead, the other 25% instituted our fascinating, radical and unique Alaska Permanent Fund (PF), (Article 9.15). 

This portion of natural resource revenue is specifically restricted to prevent it from being wasted by an already well funded government. Ratification confirmed a compromise between all persons, the people and the state (named in the Preamble and Articles 1.1 and 2): Alaskans gave up potential private right of ownership of Alaska natural resources (see Article 8) in exchange for elimination of distasteful taxation politics. 

This was an acceptable deal if you naïvely assumed the state government would limit itself and elected legislators would act for the “maximum benefit” of Alaskans. Legislators later made laws to allow individual dividends to be paid directly to Alaskans (our PFD checks). However, we seem to be in imminent danger of the strong executive branch influencing the legislature to spend the restricted PF earnings. If this happens, Article 9.15 (PF) will be shown to be nothing but a cruel joke.  

Ratifiers (1956 voters) could not have guessed: 

1.    The wild extravagance of revenue source (the 75%) and how it would someday produce an unappreciated ‘sugar daddy’ government.
2.    The 25% would be so successfully invested, thanks to the standards put in place by the legislature as constitutionally directed.

Then, the legislature would later decide to restrict dividends to keep more in the savings, creating a close to $10 billion reserve!  

Stunningly, this reserve now has enough money to hypothetically pay $4,000 PFDs for approximately eight years and still have more than $2 billion in reserve! This accounting uses the same projections as the governor and confirmed by the legislature! If the state still “needs” money so badly, the legislature could then exercise its constitutional power to tax back what it needs in full political view of all Alaskans! 

Amazingly, Alaskans seem to be falling for the misleading and false guilt trip stating we pay far less taxes than any other state! 

So why has the legislature not simply squashed this lobbying? This is a particularly tough question for me as a recently retired legislator. I am troubled to know some of my closest friends and mentors seem to be folding on this! I refuse to view them as big spenders or liars because I know them well and highly respect them. However, I am convinced they are pawns in a high stakes chess game. Which is the real problem because they are pawns by design! 

Don’t make the mistake of thinking the courts are a source of justice on this issue. Our executive imbalance has resulted in a judicial system priding itself in “justice not politics”, which is a coded way of saying justice is not served by having more public input than they want! The Alaska judicial system is set up to be joined at the hip with Baby Huey!  

•    The governor appoints the attorney general - elected in other states. 
•    The governor appoints all Supreme Court justices. Ultimately the courts are exactly like other state agencies, with a natural conflict of interest related to state spending.  

It is important to remember this imbalance anomaly does not cancel out the best things about the Alaska Constitution. Article I essentially reiterates the US Bill of Rights with the same deference to our God-given human rights. The first words verify sovereignty belongs to the people, not the state! The values of the US Constitution are evident, but weak in the balance needed to restrain some unflattering elements of human nature, such as greed, selfishness, pride, deception and anger.
Wes Keller