Alaska Governor's New Campaign

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Even though he is not running for re-election, Gov. Steve Cowper of Alaska is campaigning as hard as any candidate these days.

But instead of pursuing a second four-year term at the helm of the Last Frontier, Mr. Cowper is crusading for the creation of an educational endowment that, he argues, would provide a stable supply of money for Alaska's schools in the next century.

The oil royalties that currently provide most of the state government's revenues are already declining and cannot be counted on in the decades to come, he warns.

Mr. Cowper's solution is to set aside some of the earnings of the Alaska Permanent Fund--the massive account, currently worth $10.2 billion, that was established in 1976 with the state's first revenues from the the Prudhoe Bay oilfields--for a new Education Fund.

By the year 2000, he estimates, the Education Fund would be large enough to become a self-sustaining source of money for schools.

The 51-year-old Democrat's proposal has faced significant opposition in the state, however, from those who warn it could endanger the hefty earnings checks the Permanent Fund distributes each year to every resident.

While Mr. Cowper denies the plan would undercut the annual payments, his efforts have run into trouble in the Republican-controlled state Senate. The House backed the proposed constitutional amendment this year, but the Senate has not yet taken a vote on the measure.

So Mr. Cowper is spending his remaining months in office criss-crossing the state, trying to mobilize public pressure on the Senate to approve the plan, which would be placed before the voters in November 1990.

"It's like running a campaign, which indeed it is," the Governor said in an interview. "I'm spending about as much time on that as if I were running for re-election."

Expecting a Dividend

Each year, nearly half of the Permanent Fund's investment income goes back into the fund to cushion it against inflation, and a small percentage goes into a reserve, or "rainy day," account. The rest goes to residents as a per-capita dividend.

This year, the fund earned $800 million, which provided every man, woman, and child age 1 or older with a check for $873.

Alaskans have not only come to expect the annual dividend, but that it will continue to grow each year.

Mr. Cowper maintains that he respects the Permanent Fund as much as anyone, but that it is time to make adjustments that will guarantee educational excellence.

"I watched in some pain in 1986 and 1987, when there had to be a substantial reduction in the state budget both years," he said. "Education took a hard hit. The main constituency for education can't vote."

The Governor proposes to set up the Education Fund by diverting some of the money that goes for "inflation proofing" the Permanent Fund.

Beginning in 1991, the state would turn over at least 40 percent of Permanent Fund earnings to the Education Fund, which would be allowed to build up until the turn of the century. At that point, the legislature could consider spending the earnings of the Education Fund on elementary and secondary schools.

"At the end of that time, we figure there will be enough money in that fund basically to endow public education in this state," he said.

Long-Term Solution Backed

The Education Fund would be a long-term solution to the struggle for adequate education funding, according to its chief advocate. The idea has also been endorsed by the National Education Association of Alaska and other education groups.

"If we can take the time to solidify something for our future youth, we would do a real disservice by not taking that step," said Carl Rose, executive director of the Association of Alaska School Boards.

As he travels around the state giving speeches, Mr. Cowper's biggest challenge is to convince voters that the plan would not disrupt the flow of dividends from the Permanent Fund. In fact, dividend checks will continue to increase each year, he argues, to more than $1,000 by the year 2000.

But to many Alaskans, Mr. Cowper knows, the idea of tampering with the fund is fiscal blasphemy.

"There is a kind of religious belief here on the part of some that the Permanent Fund should never be used to do anything but send money to the people," he said. But that attitude must change, he argues, as the state faces fiscal limits.

Before Mr. Cowper has a chance to test public support for his proposal next November, 14 senators--two-thirds of the total--must approve a bill calling for the referendum.

Mr. Cowper urges listeners to contact their senators, who he fears could derail the proposal."The state Senate is timid; they are frightened with an issue like this," he said.

'A Popular Ruse'

A leading critic of the plan is Senator Rick Halford of Chugiak, who is also a candidate for the Republican gubernatorial nomination next year.

"I do not think it is genuinely for the benefit of education," he said. "I think it is a popular ruse to use Permanent Fund income in the general budget and release the general funds now going for education for other spending."

Mr. Halford contends that the Education Fund is merely the latest of several attempts by the Governor to tap into the Permanent Fund.

"Alaska is facing a difficult transition back to the reality that most other states have had to remain in all along," said Mr. Halford.

"In the end it is a value question," responded Mr. Cowper. "It's a statement by the people of Alaska to see whether they want to take everything they can get, or whether they can share the legacy of Prudhoe Bay with those who come along later."

Vol. 09, Issue 13

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