Alaska

Citizens of Alaska have grown used to hearing warnings that their government is about to run out of money. The warnings are not groundless. The Constitutional Budget Reserve, which has been tapped 11 times in the past 13 years to bail the state out of short-term budget crises, has declined from $6 billion to $2 billion and has been projected to run dry as early as 2007. That would force Alaska into some hitherto unthinkable choices, such as instituting income or sales taxes or tapping earnings from the state’s other reserve, its $29 billion Permanent Fund, which pays out thousand-dollar dividend checks to every man, woman and child in the state, and is considered politically untouchable.

At the moment, however, Alaska has an excuse for avoiding this troublesome long-term issue. The excuse is the high oil prices that have temporarily restocked the state treasury and removed the fiscal pressures. Alaska will in fact end the current fiscal year with a budgetary surplus.

If that news comes as a relief to taxpayers, however, it isn’t necessarily a good thing for state management practices in the long run. Until this year, Alaska’s most recent revenue scare appeared to be galvanizing its leaders into a serious examination of the long-term fiscal situation, one that might provide an alternative to the chronic need for supplemental budgets and raids on the Constitutional Reserve Fund. Governor Frank Murkowski, who took office in 2003, spent much of his first two years looking for an acceptable combination of fiscal remedies. By the middle of 2004, those efforts seemed to be making progress — but how much further they will proceed amid the current oil price boom is problematic.

Money C Long-Term Outlook Budget Process Structural Balance Contracting/Purchasing Financial Controls/Reporting People C+ Strategic Workforce Planning Hiring Retaining Employees Training and Development Managing Employee Performance Infrastructure C+ Capital Planning Project Monitoring Maintenance Internal Coordination Intergovernmental Coordination Information C Strategic Direction Budgeting for Performance Managing for Performance Program Evaluation Electronic Government • Population (rank): 626,932 (48) • Average per capita income (rank):    $33,568 (12) • Total state spending (rank):    $7,402,469,000 (38) • Spending per capita (rank):    $11,548 (1) • Governor: Frank Murkowski (R) • First elected: 11/2002 • Senate: 20 members: 8 D, 12 R • Term Limits: None • House: 40 members: 14 D, 26 R • Term Limits: None

The Murkowski administration has promoted reform on a variety of other fronts: Shortly after taking office, the governor decided to reorganize personnel management. The personnel system is now completely centralized in Alaska, with every human resource position in 14 individual operating agencies pulled under the aegis of the central Division of Personnel. Alaska has never had a formal statewide workforce plan; the new centralized system may make such planning possible for the first time. The one serious difficulty with the recent round of personnel reforms has come from inadequate information technology that still makes timely reporting of human resources data difficult to obtain.

Alaska’s Department of Transportation and Public Facilities has a somewhat similar story to tell. The department does a good job of tracking and describing Alaska’s road maintenance needs. But the agency also is responsible for overseeing design and construction of the state’s buildings, and generating the data to track capital needs for that infrastructure has proven difficult, not only for technology reasons but also because the legislature hasn’t allocated sufficient resources to the effort. Alaska has no overall capital plan; there is a long-term transportation improvement plan, but it has been plagued by so many cost overruns that it has lost credibility among many in the transportation community.

One potential bright spot in Alaska management is “Missions & Measures,” an effort to stabilize and improve the state’s performance measurement process. This program has been around since the mid-1990s, but until recently was little more than an exercise in pushing pieces of paper around. Now, however, the state’s Office of Management and Budget seems to be focused on a effort to create a workable strategic planning process — one that balances input from the central government and the agencies — as well as steering the agencies to proven practices. “As much as all the effort may have been frustrating and time-consuming,” says John MacKinnon, deputy commissioner of Transportation and Public Facilities, “it is letting us look through a different tint.”

For additional data and analysis, go to: http://results.gpponline.org/alaska

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