Last Thursday Governor Walker’s office issued a press release announcing that, the following day at an in service training for some of its middle and high school teachers, the Anchorage School District intended to start rolling out proposed course materials “to bring Alaska’s fiscal challenge to the classroom.” That was the first I, and from various reactions, a large number of others had heard about the intent to do so.
What caught my eye about the proposal was the following statement in the Governor’s press release: “the lesson plans center on Alaska’s Revenue and Expenditure Model developed earlier this year by the Alaska Department of Revenue.”
As readers of these pages likely already realize I am not a fan of the Department of Revenue’s model. As I wrote on these pages in June, in my view DOR’s model then was short-sited and strongly biased toward requiring new revenue options. While there have been some improvements made in the model since the version I reviewed in that piece, it continues to contain limitations and deficiencies which continue to drive users toward those options.
More importantly, the model fails to identify and lead users to understand — and find pathways to solve — the structural defects in Alaska’s current fiscal model. Following oil price and production ups and downs, Alaska’s historic fiscal approach repeatedly has led to boom and bust cycles in government spending over the last several decades. Rather than address that fundamental issue, which goes to the heart of Alaska’s current fiscal situation, DOR’s model instead merely leads users to try to find ways to fill in the current bust cycle with “new revenues” — largely a PFD cap and broad based taxes. Continue reading