Here is a sampling of editorial opinions from Alaska newspapers:
May 14, 2016
Ketchikan Daily News: Cost of do-overs
Do it right the first time, and it won’t be necessary to redo or undo it.
That’s a lesson the Alaska Legislature is in the process of learning or learning all over.
The topic is its attempted acquisition of Anchorage office space; it’s been a trying effort, to say the least.
- The Legislature entertained the idea of buying a downtown building with a pricetag of $32.5 million for office space.
- Gov. Bill Walker said he wouldn’t allow that given that the state has a $4 billion deficit. Hats off to the governor.
- Anchorage Superior Court Judge Patrick McKay piled on, stating that the Legislature’s 10-year lease extension of the downtown building’s office space was illegal and invalid. It should have been subject to competitive bidding requirements.
- With that the Legislature came up with a $12.5-million building in the middle of Anchorage. Compared to the Legislature’s rent of $3.4 million annually, this seemed like a bargain - the preliminary selling price is equal to about four year’s rent at the downtown location.
- The Anchorage Borough Assembly went on the record against a midtown location for the Legislature, preferring it be downtown.
- Gov. Walker didn’t balk at the idea of a cheaper building, and presumably the Legislature would do the deal right this time.
But not so fast. The risk department of the Washington-based Everbank, which loaned about $28 million to the Legislature’s landlord at the downtown location with the understanding the Legislature would be the tenant allowing for the necessary payments, piped up. It suggested the Legislature re-read the legal agreement signed by its representative at the time, Rep. Mike Hawker of Anchorage. Essentially, the bank threatened the state with a lawsuit to the tune of about $27 million based on its interpretation of the pact.
The courts undoubtedly will be given the opportunity to continue to sort this out. The bank indicates an appeal of McKay’s decision is likely.
Of course, all of this will take Alaskans’ time and money, both of which the state is running out of quickly. The Legislature’s time should be spent on eliminating the deficit. It’s money, too. And, legislators certainly shouldn’t be adding to the revenue shortage, something that was occurring in December 2014 when Hawker signed the agreement. At that time, the price of a barrel of crude had dropped to around $60.
Everybody makes mistakes. Clearly, the $32.5-million building is a big one. It’s so big that most Alaskans, including legislators, will see the harm in not doing a deal right in the first place next time around.
As the Legislature, for that matter anybody working on behalf of the state, confronts issues as representatives of Alaskans, no factor other than what is best for the state should be uppermost in decision-making. It’s the state first and foremost; other loyalties are secondary. Maybe the office-building situation will serve as a reminder of that as the Legislature focuses on Alaska’s revenue problem. There are solutions, and it will find the right ones. It will do it right the first time. Not only because it’s the right thing to do, but because it has to. Too much depends upon it.
This is a serious matter. That’s a phrase applicable to both the legislative office space topic and the revenue issue. It’s how the bank concluded its letter to Alaska. Indeed it is.
May 13, 2016
Juneau Empire: Two buildings cost more than one
We’re not mathematicians. That’s why we prefer to dabble in words and not numbers.
Fortunately, it doesn’t require a declaration of the Alaska Office of Management and Budget for us to know that heating, powering and maintaining two buildings is more expensive than one.
That’s why we’re scratching our heads at the Legislative Council’s 12-1 vote last week to purchase a new office building for Anchorage lawmakers.
Just because the most recent building, considered by some lawmakers a deal at just $12.5 million, is cheaper than the current Legislative Information office ($32.5 million) doesn’t mean it’s a smart purchase. That’s like deciding to purchase a Subaru instead of a Ferrari when you can’t afford gas money for either.
Sen. Anna MacKinnon says purchasing the building from current owner Wells Fargo will be cheaper than renovating the state-owned Atwood Building and paying for interim office space while renovations take place. This statement underscores a major problem with our Legislature as a whole: They refuse to look beyond next year. Purchasing a $12.5 million building may be the cheaper option (that’s if the Wells Fargo building requires no renovation) over the next few years, but elected leaders should be thinking long-term savings. This lack of foresight is how Alaska ended up with a $4 billion deficit to begin with. Somewhere along the way, we forgot that oil prices go down as well as up.
This newspaper said just a week ago that the City and Borough of Juneau should avoid putting public dollars toward the Juneau Ocean Center because this isn’t the time for state or local governments to begin building new things. We must take care of what we already have. The same argument holds true for the Legislative Council’s persistent attempts to buy a building, even though it already has one that will suffice.
Juneau is very familiar with the notion of having two buildings where one will do. We’ve learned a painful lesson through the experience of building a second high school and a second community pool. We enjoy these facilities, but now that we’ve been confronted with the bill, they seem much less necessary.
The majority of Alaskans we’ve heard from are OK with the idea of getting less from the state. We have to be. The Legislature shouldn’t treat itself differently. If the rest of us are expected to sacrifice jobs, services and public safety, those making these decisions shouldn’t increase their own luxuries.
On Thursday, the Alaska Senate Finance Committee approved a state capital budget that contains $12.5 million for the new building. What was left out? $7.2 million for a new village school in Kivalina. That payment is, we believe, required by a lawsuit the state settled.
For the sake of a new office building in Anchorage, the Alaska Legislature is sacrificing the children of Kivalina. It is putting the state at risk of a new lawsuit. This is atop the lawsuit already being threatened by the bank that funded renovations to the existing Anchorage Legislative offices. The Kivalina school is just one example among many of where money is needed but won’t be received if unnecessary spending isn’t curbed.
We don’t know whether to cry or laugh.
A new office might make legislative staffers more efficient, but that new office isn’t essential. We’ve heard time and again from legislators this year that only essential services can be offered in this budget. Lawmakers should listen to themselves.
Gov. Bill Walker previously said he’d veto any attempt to purchase the Anchorage LIO for $32.5 million. He has declined to say whether he’d do the same for this building. We hope he will again vow to veto this proposal for the sake of fiscal conservatism and Alaska’s shrunken revenue.
Our simple hope is that politicians who call themselves fiscal conservatives will act like they are.
May 15, 2016
Fairbanks Daily News-Miner: Legislature should help UA transition
Changes on the way for the University of Alaska system, as sketched out in a memo from UA President Jim Johnsen last week, look to be seismic. Just how much they will affect the state - and Fairbanks in particular - was demonstrated on the News-Miner’s front page Friday. On a normal day, the news that the university was opting not to hire any of the four finalists for the vacant University of Alaska Fairbanks chancellor position would have been the day’s top story. But the magnitude of the changes planned for the university, of which holding off on hiring a permanent UAF chancellor was just one part, were sufficient to push that news off the front page altogether.
The road ahead for the university won’t likely be smooth. If the university were a jet airplane, President Johnsen would be attempting to land it with one sputtering engine. The students, staff, faculty and many members of Alaska’s communities are along for the ride, hoping that the situation is handled with expertise that will minimize the damage.
Though the magnitude of the cuts to the university’s budget - as much as $50 million of an allocation that stood at about $350 million last year - is apparent, details of the university’s plan to deal with that cut haven’t yet been finalized. It’s possible money will be restored to the university budget before the Legislature gavels out of session, but with the session’s end weeks overdue already and the new fiscal year starting July 1, the university can’t afford to sit on its hands in the meantime and is moving ahead with what it considered a worst-case scenario when the session started.
If at all possible, the members of the Legislature should restore some of the university’s allocation this year, if for no other purpose than to afford a little more time for President Johnsen and the Board of Regents to put into place the changes and cost-cutting measures planned under the university’s Strategic Pathways plan. The items the university is pursuing - single accreditation, potential reductions in athletics programs, combining university departments and centralizing course offerings - will be hugely disruptive to not only the university’s day-to-day business but also could have significant negative impacts on classroom instruction. It’s hard to maintain a high-quality education experience when a department is moving across campus during the academic year, for instance, and the only professor who taught a handful of classes required for a major is being forced into an early retirement.
Many of the changes the university is considering could indeed make the system more efficient and cost-effective. Reducing duplication of offerings across campuses is an appropriate goal, and some of the university’s departments, such as the nursing program through UAA, show how that goal can be achieved with minimal disruption to students. But there’s no denying a 14 percent systemwide cut delivered mere weeks before the new fiscal year starts will have a major, immediate negative impact on university campuses and the communities they serve.
The university should by no means be immune from the cuts taking place throughout the state budget. But when tampering with the gears of the machinery that provide for the state’s future, a solution focused on a budget number rather than outcomes for students and the state could be damaging to a generation of Alaskans and have downstream effects far into the future. Given the magnitude of the changes the university is being told it must make, it would be only fair for the Legislature to afford the university funding that will allow them the time to make those changes responsibly.
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