A Call to Leadership

When, after being in session for 160 days, I began to hear both the House and Senate leadership talking about passing just a budget and going home, I was reminded of a meeting I had last summer with a professor from the University of Potsdam.

He was traveling around the world, talking with people associated with the world’s largest sovereign wealth funds—many of which were associated with mineral-rich regimes. His research was focused on how the funds were being used to replace falling revenues from commodities as price and production fluctuate over time.

As I discussed the difficulty the Governor was having in moving the Alaska legislature to make significant changes before we fall off the fiscal cliff, he interrupted me. He said Alaska is facing the same problem seen facing decision-makers throughout the world. The problem is so common, he poses the same question every semester: “How can I incentivize a decision-maker (or a body making decisions) to take action now that prevents an unfortunate outcome later in the future?”

Because here’s the conundrum: If a decision-maker takes action to prevent a draconian outcome—without evidence that inaction would have been far worse—the populace could retaliate. For fear of retaliation, decision-makers fail to act to avoid the crisis they know is coming. Instead, they wait for the “safety” of the crisis to justify action.

We are seeing this play out in Alaska. For three years, the legislature has failed to take any significant action to resolve the state’s fiscal crisis despite ample evidence of the ultimate outcome of inaction. Every time a legislator avoids a difficult decision by blaming someone else, finding an insignificant issue to hide behind, or leaning on tired ideology to justify inaction, it shows he or she is not inclined to act until all of the state’s monetary reserves are depleted—so the “safety blanket” of a crisis can then justify action.

I don’t mean to diminish the difficulty of the decisions facing the legislature. From a purely political perspective, eliminating government services and programs is nearly impossible to do. Imposing new taxes is unpopular at best. Reducing the size of the permanent fund dividend or limiting oil and gas tax credit payments is incredibly controversial.

However, no one ever promised that governing a state of such immense size and diversity would be easy. Leading is hard and often unpopular work. It cannot be done within an artificial bubble of party politics where creative thought and bold decisions are met with re-election threats from nondescript party leaders whose only apparent concern is whether the winning team has an “R” or a “D” on the jerseys.

You cannot lead when an inordinate amount of energy is used to develop strategies to pin blame on the other body, the other caucus or the other branch of government. You cannot lead when the bloggers and radio talk shows are accepted as the surrogate voice of the people. You cannot lead when keeping a job becomes more important than doing the job.

I hope I’m wrong. I hope there are still true statesmen leaders in the legislature who are as frustrated as the rest of us with legislative inaction. I hope they are willing to step forward and say “enough is enough.” I hope there are such leaders whose reasonable voices are silenced by caucus politics.

I hope we have leaders who are willing to accept that an uncertain political future is a price worth paying to ensure fiscal certainty for the state they have sworn an oath to serve. I hope we have leaders who are ready to reject party and caucus politics to find a compromise solution that all parties can accept as fair and balanced. I hope we have leaders who are ready to get the job done for the people of Alaska.

Randall Hoffbeck is the Commissioner of the Alaska Department of Revenue

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