GUEST COMMENTARY: Spending cap would help restore trust in government

Trust in government is at an all-time low. Every year, the well-respected research firm Edelman Data &Intelligence surveys thousands of people across the world to measure attitudes about trust and credibility.

Throughout its 21-year history, the report has revealed fascinating insights into which institutions are deemed credible and trustworthy.

This year, business has emerged as the most trusted institution, replacing government. Business is the only institution deemed ethical and competent, and outscores government by 48 points on competency alone.

These attitudes reflect the stellar response to COVID-19, with business finding innovative and safe ways to continue delivering their goods and services, and the rapid development of a vaccine.

While those of us in the business community appreciate finding ourselves in the top spot, we realize Alaskans must trust their government for important policy decisions. This year, those decisions are especially urgent. In the spirit of being helpful, the Alaska Chamber offers a solution to restore some of the trust Alaskans have lost in state-level leadership.

A real, meaningful cap on state government spending would go a long way in showing Alaskans government can be trusted with public funds. The concept of a spending cap is not new or complicated. Individuals and families usually match their spending to their income, and they understand that blowing budgets is bound to catch up with them eventually.

Alaskans want government to acknowledge this basic tenet of budgeting. While the concept of spending from emergency savings under extraordinary circumstances may make some sense, watching years of deficit spending created by past years of overspending has contributed to the dramatic erosion of trust in government.

The State of Alaska technically has a spending cap in place now, but it lacks teeth. This is why the State was able to ramp us spending so dramatically a decade ago when oil prices were high, and money was rolling in.

Because no effective spending limits were in place, the size and scale of the state’s operating budget grew many times faster than the ability to sustain such growth.

Now we find ourselves with the unpleasant reality of annual budget cuts just to get the state back to a place where it can pay for basic services. No one enjoys that painful process, and we sympathize with state leaders trying to solve problems with no easy solutions.

That is why the Alaska Chamber has such a strong record of supporting governors who take our fiscal crisis seriously. Even when the business community does not like every aspect of the solution, we have always encouraged our politicians to develop a long-term fiscal plan to give all Alaskans confidence in our future.

This brings us back to supporting a real spending cap. If state leaders plan to ask Alaskans to contribute more to state revenues, they must guarantee that dramatic overspending will not recur once more money is available. We know aspects of a comprehensive fiscal plan will be difficult.

But, if they occur in concert with a robust spending cap, Alaskans will trust that their sacrifices of today will not be wasted tomorrow. Any realistic fiscal plan requires this to be in place at the same time as the sacrifices the citizens will make, so the time to establish a cap is now.

In plain terms, we encourage our state leaders to put a cap in place that shows Alaskans government is legally prohibited from long-term unsustainable spending again.

Crafting law that guarantees downward pressure on spending also forces legislators and the governor to make tough choices; if only a set amount of dollars can be spent, real choices about what to fund will be mandatory.

Several municipalities across the state have lived and thrived under the constraints of tax caps for decades, the Municipality of Anchorage being the most well-known example.

While taxpayers in Anchorage grumble at waste in local government, imagine how much worse the situation would be if no cap had been in place! Given the widespread lack of trust in government, state leaders codifying tough spending limits are likely the only way Alaskans buy into the idea of creating new revenue streams.

Once trust in government is restored, or at least improved, the state can move forward with making the tough decisions in front of us. That sets up the entire state, including the business community and the Alaskans who work within it, for success.

Allen Hippler is the chairman of the Alaska Chamber.

03/03/2021 - 9:23am