Thursday, March 5, 2020

A Time for Truth

Gov. Dunleavy Dares Alaskans to Consider Possibilities


Alaska has a strong governor by design. Our constitution provides for the governor to be at least 30 years old and have lived in the state seven years, like most states, but two—California and Washington—allow the governor to be a minimum of 18 years old. I submit those states appear lately to be run by children no matter how old their elected officials are.

We in Alaska need to have adult conversations about our economic future.

The Executive Branch is where most money is spent in State government, and the governor’s Office of Management and Budget is the only place where anyone really knows where all state money is located.   
Because the governor controls the levers of power in our system the person in that position can do great good or great damage.

I submit that our last one-term Democrat Gov. Bill Walker did great harm. Together with legislators who say one thing at election time and go to Juneau to form cowardly coalitions to do the opposite, Alaskans are suffering from a lack of confidence in our state government. Budgets continue to grow as revenues decrease. How can voters be complacent as duplicitous politicians year after year drive the state operating budget into a fiscal ditch? Gov. Walker made nice with the Chinese Communists, promising a Gas Line will be pulled out of his magic hat, while conspiring with the majority coalition in the Alaska Legislature to violate the statutory formula for the Permanent Fund Dividend, stealing money from the People’s Fund for more bloated state government and non-profit corporation plunder.

Alaskans woke up when they got a fraction of their legal PFD under
Walker and his gang, but the games continue anyway.

We may be giving our kids the lowest academic outcomes in public education among all of the states but most Alaskans know intuitively they must balance their own budgets. Some become infuriated when special interests continue to take from the state where our expenditures for government services are far higher than anyplace else in the country. But, ultimately the very people who shoehorned Bill Walker into the governorship also showed him the door at the end of his term.

Since then the children pretending to be adults have been throwing a fit. But when Gov. Dunleavy decides to conduct a series of Town Halls to talk to Alaskans about what their vision is for the future of Alaska given current economic dynamics, we can assume he is sincere. He has been through a baptism by fire after soundly beating Anchorage School District graduate and Democrat governor candidate Mark Begich in November of 2018, and Dunleavy now needs validation of what voters expect given state budget realities.

While Alaskans were filling a Chugiak High School auditorium to learn about options for dealing with our state's financial crisis, these people were seeking signatures from voters whose candidate lost in the last election, for their ill-fated recall petition. This was not a likely venue to find many who wish to recall this governor but part of a public spectacle including illegal signature gathering Outside. 

Make no mistake about it, this governor won the election decisively:

Michael Dunleavy/Kevin Meyer won in the 2018 election with 145,631 (51.44%) votes over Democrats Begich/Call’s 125,739 (44.41%) votes. All others who wasted their votes only totaled 11,764 (4.15%) combined.

Yeah, I know I need a haircut!

I attended the governor’s Town Hall on March 2 at the Chugiak High School and found it very enlightening. As a teacher by training Gov. Dunleavy provided an instructional overview to what the problems are and some possibilities for addressing them. Specifically, three constitutional amendments are proposed, to 1. Require a vote of the people for any establishment or increase of taxes, (SJR 4/HJR 5) 2. Require a vote of the people to change the PFD program, (SJR 5/HJR 6) 3. Establish a baseline to limit spending to no more than the average of the appropriations for the last three fiscal years, plus 50 percent of inflation and population, or 2 percent, whichever is less. Additionally, as proposed the amendment to the constitution implements a constitutional savings plan, that directs unexpended funds each year to the Alaska Permanent Fund and to a savings reserve fund (SJR 6/HJR 7).

No gimmicks, no “trust me” scenarios; this is the governor’s proposal and it will require Alaskans to embrace it or we continue to play political take-away with the children whose unions run our public education system and state employees, sponsoring politicians who assure unions can negotiate salaries, benefits, and conditions of employment from both sides of the negotiating table. 

I will never again vote for a politician who takes a penny of union payoff money again.

Perspective of the Current Situation

H&SS Commissioner Adam Crum discussed State Cronavirus efforts.
Before opening the Town Hall for discussion of participant’s ideas, Gov. Dunleavy provided an overview of what has happened since he was elected in November of 2019, with a cameo appearance by H&SS Commissioner Adam Crum to talk about the State’s active efforts to protect Alaskans and deal with the threat of the Coronavirus. For more information about that readers may go here:

As a trained educator, Gov. Dunleavy approaches the job in a different mind-set than any previous governor of Alaska. That may be why unions and public employee teachers are afraid of him. Having also trained as a teacher myself, I recognize the formula for convincing parents that every teacher really cares, and has the best interest of every child at heart even beyond their own personal interests. However, I learned the difference in what they say in this regard and the reality in many ASD teacher lounges. The problem the unions have with Dunleavy may have to do with the fact he was also an administrator and school board member so the union doesn’t scare him when it backs an opponent who floated through ASD on his family name.

In the introduction to the Town Hall by Director of Communications Dave Stiren, participants were told their ideas and thoughts were invited and if they were not comfortable in this setting they could fill out a questionnaire or contact the governor’s office directly. One of the first people to jump into the que--wearing his Recall Dunleavy button prominently on his chest--was treated respectfully and quickly ran out of questions.

We are coming up on 15-months since we took office, began Dunleavy. We knew we had to contain the size of the budget after years of spending through our savings--in the past five years we have spent approximately $14-15 Billion. This is what is known as a structural deficit, meaning given the size of our government--with revenues coming in that are much less--we will use up all of our savings. The reason this was happening was due to oil prices going up, then down, then up. This happened before in the past but Alaska has always been saved by a spike in oil prices.

This time it is different.

Because of the new technology of fracking in the other states, today the United States is the largest source of energy on the planet. We actually export oil now whereas we didn’t used to do that. We export more than Russia or Saudia Arabia and the other big players, Dunleavy continued. During the campaign, the price of oil continued to decline through the summer and by October 10 it had held at $85/bbl.  Today the price of oil is about $51-52, which is lower than it has been for several months. There are a variety of reasons for that, regarding the oil market, but regardless the change has been considerable.

And this has political implications for people who broker ignorance to bolster their untenable economic positions.

To put that into perspective: $85/bbl versus $51/bbl today represents about $2.3 Billion in revenue difference, explained the governor. We had hoped throughout the campaign that we could consider a stepped down budget process—reduce a little this year, reduce a little next year, and over time arrive at a sustainable budget.

Keep in mind that investments in the North Slope Oil Patch have produced an additional 200-300 thousand barrels of oil in the pipeline, Dunleavy continued. We viewed this as a temporary situation. The problem was that on December 27-28 oil reached $54/bbl and the belief was it was going to keep going down. So we made a decision to reduce the budget--instead of a stepped down approach—and present to Alaskans a budget reduced by $1.6 Billion.

Reality can be so difficult for delusional people.

Dunleavy continued: Contrary to what some said in the press and others, that budget demonstrated what the budget would look like regardless of whether it was accepted by the legislature. We wanted to earmark some services and programs for the legislature to consider and look at. The discussion was very heated and the reductions were believed to be too steep, too soon. The end result was we had a contracted budget discussion and what I failed to do—what we failed to do—was to have the discussion early-on. I’ll be the first to admit I should have come out with a discussion with the public like we have here today. We did come out too late and considered as many options as possible, but I can’t undo what happened as far as the communication issue.

In other words, the crybabies who think they are the only people who count in their wishes to spend beyond our means took all of the oxygen out of the room. Some might even say the Alaska Court System piled on because they didn’t like taking cuts, either.

How did we get to this place?

I remember well when the price of oil dropped precipitously right after Democrat Gov. Steve Cowper was elected over Bill Sheffield in 1986 (after promising everything to everybody) he then declared: “All bets are off!” Alaska was saved from fiscal discipline this time by the Exxon Valdez disaster in Prince William Sound.

At the recent town hall Dunleavy reviewed the highlights of how Alaska got where we are at beginning with why we decided to form a Permanent Fund after blowing through the initial $900,000,000 from the 1969 North Slope Oil Lease sale.

That was phenomenal for a state whose budget at the time was only about $200 Million, said Dunleavy. People back then were very concerned that with more development we would potentially receive billions of dollars and continue to spend that money; not leaving anything for future generations.

I was there! I remember the concerns as they were discussed in the living room of Sen. Nick Begich, Sr. and Rep. Tom Fink, both Catholics on two sides of the Alaska Legislature political spectrum. They were able to have a civil conversation and it was all pie-in-the-sky to me. I was just out of East Anchorage high school and helping Begich take care of four kids (Nicky, Tom, Mark and Stephany) while building apartments near Boniface and Debarr Rd. with assistance from East High math teacher Ivan Harrison, a mutual friend.

We Alaskans were so naïve.

That’s how the Permanent Fund became part of the Alaska Constitution, Dunleavy continued. Jay Hammond and a lot of legislators were looking to the future and a lot of Alaskans came up with the Permanent Fund concept agreed to make it part of the constitution—to save some of that money.

The PFD program came later, in the early 1980s, and there continues to be a lot of discussion about what the purpose of the Permanent Fund Dividend is, and what the Permanent Fund Corporation was, continued the governor. From my review of the issue I believe the Permanent Fund was established to save money from finite resource development for future generations--for government and potentially for a dividend program. That’s why it was put in place.

But there’s more!

Two other things happened at this time when Alaskans really wanted to take control of spending; a spending limit was placed in 1981 that was supposed to reign in the spending of state government, said Dunleavy. The problem with that spending limit is the calculations and the formulas were very steeply inclined. So, your limits today would be about $9.7 Billion of state money while in fact our state government is spending about $4.6 Billion. Our total spend is now about $10 billion in combined state/federal money.

The governor's proposed constitutional amendment would update a law that hasn't worked.

Okay kids, what plan do you have? What do you think the governor should do? Should he just solicit bidders from anybody, anyplace for Alaska’s valuable resources and fund state government from savings like the last guy? Are there places in the formula where more can be gained from squeezing non-profits who seem to think they are ultimately entitled to the Permanent Fund?

Or should we just keep whistling past the graveyard?

A real teacher strives to empower students. A real leader tells the truth even when the conversation is difficult. Gov. Dunleavy is asking what Alaskans want instead of waiting until the annual Legislative train wreck coming soon-- providing few solutions and again leaving everybody pissed off.

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