Fiscal stability solves many problems

Tucked away in Alaska’s recent bond upgrade from Moody’s Investor Service was a not so subtle qualifier. “Our rating of Aa2 with a stable outlook is predicated on the assumption that the state will ultimately make the hard decisions necessary to address its structural budget problem”.

And after reading three unrelated news stories, it’s becoming clear that policy makers should listen to the educated people who rate our credit worthiness.

From overweight students in Anchorage to over crowded schools in the Valley to over worked wildlife management around Alaska, it’s time to recognize that the lack of budget stability has created wide reaching cost shifts. After years of reducing resources while management responsibilities have increased, those hidden cost shifts are now starting to show.

If we don’t start to manage the cost of government, the cost will manage us.

The first news story detailed a recent health study of Anchorage School District students. The report done in partnership with the Alaska Division of Public Health analyzed height and weight data from 41,261 students in grades k-12 from 1998 to 2002. The findings showed that over one-third of children in the school district were overweight or at-risk for becoming overweight.

In 1984, 5% of American kids were overweight; today 15% are and another 15% are on the edge. In 1969 80% of kids played sports every day: today 20% do. The average teen gets between 10 and 15 percent of their daily calories from soda.

While government’s roll shouldn’t include being a nutritional nanny, the fact is government is getting stuck with a larger bill every year. The direct medical expenditures in Alaska for obesity alone are estimated around $195 million annually. Meanwhile Medicare continues to be the fastest growing expense in the state budget.

It’s time to manage our losses.

In order to reverse this health trend we need comprehensive changes, but those changes require stable resources. Stable resources to increase physical education and access to infrastructure that promotes fitness. Stable resources to replace food service and vending machine contracts that provide schools with revenue through the sale of unhealthy lunchroom options.

But stable resources only come from a balanced budget.

The second news story concerned the rapid growth in the Mat-Su Valley and the corresponding pressure on government services. “Were growing at a rate of 500 new students a year and we’re not building a new school a year” said Bob Doyle, a school district official. All Valley schools are at capacity and the school district just approved $1.4 million for twenty portables.  

For the last decade the Valley has become the trendiest destination in Alaska. Lots of affordable housing, privacy and the commutes are easier with recent highway improvements. Economic forecasters predict the Valley will be hot for years to come.

The challenge for the borough government is paying for growing demands while protecting a growing economy. A community dividend targeted for education, highways, and public safety infrastructure could aide local growth while easing the burden of local property tax payers.

But this too requires a balanced budget.

The third news story was a proposal by the Fish & Wildlife Department to raise hunting and fishing fees. According to the department, increases are necessary because of under funding by the legislature. “The bottom line is we’re strapped,” said a spokesman. Adding that a failure to raise fees will impact game management, which in turn might decrease the availability of hunting seasons and bag limits.

Once again the lack of stable resources has allowed crisis to fill the vacuum. Three separate stories, three similar conclusions. Fiscal discipline should never be confused with cost shifting.

For years the question over a fiscal plan has been who pays? But as it turns out, it costs us all. From the health of our school children, to the health of our schools, to the health of our game management programs, crisis management is always more expensive.

Stability is essential. The longer we wait to get there, the more costly it’s going to be.

And if you won’t take my word, take Moody’s.