Once again the Legislature has spent most of the session stuck in a morass arguing about the size of the Permanent Fund Dividend. Let’s imagine an alternate universe where we prioritized economic and population growth to help our state recover after a decade of decline: Key policies we would focus on would be healthy families, education, and deployment of cheap, renewable energy. Here’s why investment in people and energy are key for sustainable economic growth.
We live in a world of highly mobile capital and labor. Skilled workers can live anywhere on earth and bring their companies with them. Alaska is strategically located at the crossroads of global commerce, meaning our growth potential in a global economy is unlimited — if we invest in our own human capital. Unfortunately, over the last decade we have dis-invested in early education, public education, and higher education, leading to declining educational outcomes and a diminished ability to participate in global markets.
Disinvestments in public health have compounded educational decline. Reduced support for maternal and kids’ health have contributed to Alaska’s highest-in-the-nation rates of child abuse and neglect. Abuse and neglect at young ages manifest themselves as higher and unavoidable expenses later on in terms of Medicaid, corrections, and mental health programs. Rather than neglect children at a young age and spend more later, we should invest in kids health, from pre-natal care to support for young families. Our kids will grow up healthier and smarter and we’ll reduce outlays on Medicaid and corrections. The Alaska Department of Health has already outlined how we’d achieve these goals with its Healthy Families initiative. As a legislature, we just have to make early investments to reap long term returns.
After providing support for young kids, they need a great education system to reach their full potential. Fortunately, a great education system is relatively cheap compared to mega-PFDs. For example, raising Base Student Allocation (BSA) funding by $1,250 per student this year costs approximately $300 million, compared to the $1 billion it costs to go from a normal PFD to a mega-PFD of $2,700. We can afford a great school system right now. Back when Alaska invested in schools, we had one of the best school systems in America, and that greatness is achievable and affordable today without raising taxes on a single hard-working Alaskan.
While investment in early education and public education is essential, it is not sufficient. Energy prices in Alaska are too high for our state to be competitive. We have to invest now in cheap, renewable energy sources to drive down prices for consumers and businesses. Right now, even our largest communities pay three times more per kilowatt hour than other cities in the Pacific Northwest, and our costs will skyrocket if we become dependent on imported LNG. Fortunately, the cost of solar, wind and battery storage have fallen so steeply that we can shift to cheaper renewable generation and make our economy more competitive.
Right now, our mining sector is booming to meet demand for growth in solar energy, electric vehicles, and IT. This demand will grow due to consumer demand and a national security imperative to be independent of China and Russia. We should be refining these raw materials and engaging in manufacturing right here in Alaska, given our strategic location for global commerce—but high energy prices are holding us back. The legislature should work with utilities to deploy more renewable energy right now, not just to protect consumers and businesses, but to capitalize on a dynamic world energy market that is rapidly electrifying energy generation and vehicles. This means embracing capital investments in hydro, wind, and solar and passing critical minerals legislation introduced by Sen. Kelly Merrick and Rep. Dan Saddler.
Investing in people and energy could position Alaska to achieve a level of prosperity our state has never seen. Global economic conditions, geopolitical realities, and changing energy technology give us the opportunity to transform our economy for the better. To capitalize on this opportunity, we should embrace the administration’s Healthy Families initiative, aim for our education system to be the best in the nation, and drive investments in cheap renewable energy and critical minerals.
• Zack Fields, an Anchorage Democrat, is in his third term in the Alaska House of Representatives. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.
