Outside of writer Craig Medred you’d be hard pressed to find many Alaskans these days arguing for the Alaska State Legislature to stay in their opulent new digs in downtown Anchorage known as the Legislative Office Building (LIO). With the Governor rolling out a financial plan asking average Alaskan’s to swallow the bitter pills of reduced services, lower PFDs, and new taxes, legislators holding court in Alaska’s equivalent of a palatial estate has a something of a “Let them eat cake” feel to it.
The optics of the situation are as bad as they could be. As you might expect, legislators are now actively looking to cut out of their LIO lease and perhaps move a few block away to the Atwood Building. In theory the move would eliminate the Legislature’s day-to-day black-eye and allow them to assert, if only implicitly, that they too are making a sacrifice in these tight budget times. Then everyone is happy, right?
In the cold, calculating, bean counter rationale you’d expect from a business trade journal like the Alaska Journal of Commerce, they’re stepping up to say “Not so fast.” In a pair of postings yesterday AJOC warns a decision by the Legislature to pull out of the lease early would have serious repercussions.
The first post, a straight news story by Tim Bradner, tells how the Alaska banking community is concerned about the broader effects to the State’s business dealings if the lease is broken:
“If the Legislature were to renege on the 4th Avenue building lease and move to the Atwood Building, the cost of rentals for any agencies would climb because building owners will build in a risk factor for a similar lease cancellation by the state.
There may also be broader ripple effects, for example if the state moves to borrow money for state capital projects and to finance future state retirement pensions through bonds as Gov. Bill Walker is proposing.”
The second post is an editorial from AJOC. That piece argues the breaking of the lease, taken along with the Governor’s veto of $200 million in previously earned but not paid oil and gas development tax credits earlier this year would result in the business community concluding the State of Alaska simply can not be trusted to honor its obligations.
The editorial staff writes:
“A shortsighted action bowing to political pressure or just the optics of the whole thing will signal to private investors that the state can’t be trusted when times get tough, and they sure aren’t getting easier any time soon.”
AJOC suggests the Legislature shouldn’t cut and run from its lease obligations, but rather stay, take the substantial political heat, and send a message that regardless of how unpopular to the masses, the State of Alaska honors its business deals.
Make the politically unpalatable decision today because in the long run its what is best for the people in the long run? Ya, that sounds exactly like our state Legislature, doesn’t it?
Read the pieces for yourself. They’ll never win a popularity contest, but they do make good business sense.