For nearly a decade, the state has been gripped by a silent but intensifying fiscal crisis, one rooted not in a lack of natural wealth, but in chronic mismanagement, bureaucratic expansion, and a dangerous dependency on federal funds. Despite its vast reserves of oil, minerals, fisheries, timber and land, Alaska has become functionally insolvent without federal subsidies.

The state’s budget is burdened by duplicative programs, opaque state corporations, unfunded mandates, and a government structure more focused on self-preservation than service delivery. The result is a system where even basic obligations, such as paying a full statutory Permanent Fund Dividend (PFD), are no longer met, replaced instead with unstable political compromises and growing public distrust.

Alaska’s core problem is structural. Each year, billions in federal grants arrive attached to administrative strings that grow state government beyond what its own economy can sustain. Entire departments now exist primarily to manage federal compliance rather than serve Alaskans. The cost of this dependency is not only financial. It is also constitutional. When the federal government dictates programmatic terms and the Legislature becomes a reactive funding body rather than a deliberative force, Alaska’s self-governance erodes.

These reforms, detailed in subsequent sections of the Plan, are not theoretical. They are based on audited waste, performance failures, and models already proven in other states.

In tandem, the state budget has become inflated with redundant layers of administration, especially in education, health, and regulatory agencies. School districts operate bloated overheads while outcomes remain among the lowest in the nation. Health and welfare agencies have grown to accommodate Medicaid expansion and bureaucratic casework, not to deliver better care. Permitting and development processes across natural resource agencies are riddled with delays, compliance backlogs, and overlapping jurisdiction. At every level, Alaska’s government has grown to serve itself first, its people second.

This plan does not merely identify these problems. It proposes a systemic overhaul. The solution is not another round of incremental cuts or short-term efficiencies. It is the creation of a lean, modern, citizen-first government. The Alaska Reform Master Plan envisions a state that operates within its own means, pays its citizens their rightful share of the Permanent Fund through the original statutory formula, and reclaims full control over its own governance from federal dependence.

At the heart of this transformation is a single, uncompromising fiscal objective: Alaska must be able to sustainably operate its core government functions, pay full statutory PFDs, and maintain the integrity of the Permanent Fund corpus, even if oil prices average just $40 per barrel. This benchmark is not arbitrary. It reflects a conservative revenue assumption that protects Alaska from future volatility in energy markets while forcing the state to confront its structural inefficiencies.

Achieving this goal requires both fiscal discipline and political courage. Under current conditions, the state’s unrestricted general fund (UGF) revenue – largely derived from petroleum – cannot cover existing spending, let alone restore full PFDs or eliminate new taxes. Operating sustainably at $40 oil would require reducing the size and scope of government by hundreds of millions annually. But this is not only possible, it is absolutely necessary.

The Alaska Reform Master Plan identifies over $600–900 million in annual savings through targeted, structural reforms. These include:

— Reversing Medicaid expansion and consolidating redundant health administration

— Eliminating centralized school district bureaucracies and redirecting funds into Education Savings Accounts (ESAs)

— Reducing administrative headcount across key departments through AI integration

— Ending state funding of capital projects without matching private or federal investment

— Cutting non-essential travel, PR contracts, and redundant outreach programs

— Phasing out federal grants that require long-term state liabilities or compliance costs

These reforms, detailed in subsequent sections of the Plan, are not theoretical. They are based on audited waste, performance failures, and models already proven in other states. And importantly, they are designed to be implemented without increasing taxes, reducing public safety, or cutting services to the most vulnerable. Instead, the state will redirect funding away from bureaucracy and toward direct service – delivered through local control, public-private partnerships, and competitive models that reward performance, not political connections.

Restoring the statutory PFD formula (AS 37.13.145) is not merely a fiscal adjustment – it is a moral imperative and a return to constitutional intent. The Permanent Fund belongs to the people of Alaska, not the government. It was created to ensure that resource wealth would be shared equitably among all residents – not absorbed into the administrative budgets of unelected agencies. Reinstating full PFDs will not only restore trust in government – but it will also provide essential income to families, especially in rural communities where state services are inconsistent and federal programs often fail.

Simultaneously, the Plan protects the Permanent Fund corpus. By restoring discipline to state spending and using only the earnings generated by the Fund – without invading the principal – Alaska ensures that its greatest asset is preserved for future generations. Repealing the Percent of Market Value (POMV) statute, which arbitrarily caps distributions regardless of actual earnings, will ensure that both the dividend and the state budget can be supported by real returns, not artificial political formulas.

In the end, the Alaska Reform Master Plan begins with a simple premise: we cannot solve a structural crisis with temporary fixes. Alaska must adopt a new model of governance – leaner, smarter, and truly sovereign. The Plan offers the tools to make this shift, but it will require a shared commitment from the Legislature, the executive branch, and the citizens themselves. Fiscal sovereignty, economic independence, and constitutional accountability are within reach – but only if we begin now.

The views expressed here are those of the author.

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