Dunleavy proposes cutting non-existent state expenditure to save money

When former Sen. Mike Dunleavy is pressed to name specific items he wants to cut from the state budget, the first one he likes to mention is a small transportation project.

”$4.5 million fast rail study from Mat-Su to Anchorage, I would eliminate that,” Dunleavy said during the debate broadcast statewide Thursday.

But you can’t eliminate something that doesn’t exist.

While Gov. Bill Walker proposed a $4.5 million pilot project, the Legislature rejected the request after Dunleavy quit the state Senate in January.

Dunleavy also likes to say that he wants to eliminate “climatologists.” I think that means he doesn’t want the state to spend money studying climate change. He is unaware of the need for this research and its importance to the future of the planet.

The non-existent rail study is emblematic of the Dunleavy approach to the state budget, carelessly tossing out things to see what sounds good.

In 2017, Dunleavy said he wanted to cut $1.1 billion from the state budget over four years. It would be the equivalent of nearly wiping out what the state spends in general funds on the University of Alaska year after year.

He never gave details on what to cut, simply saying that it would be difficult. He doesn’t talk about his $1.1 billion plan anymore and claims the recent rise in oil prices made his long-term plan for fiscal sustainability irrelevant.

One of the few specifics that Dunleavy has mentioned about future budgets should worry anyone interested in the future of Alaska and its economy.

Dunleavy says he wants to “pay back” to Alaskans the $2.4 billion in additional money that would have been paid in Permanent Fund Dividends had the state not reduced dividend amounts from 2016-2018.

This is irresponsible, given the fragile nature of state finances. He’s trying to buy his way into the governor’s office with promises of a giant Dunleavy dividend.

If elected, he will have a hard time backing away from this recklessness.

If the money were to be included in a single check, the dividend in 2019 could be $5,000 or $6,000 per person.

Dunleavy has not offered any analysis to show how a giant dividend would fit into state finances for either the next few years or the long term. His comments on this are as reliable as his take on the commuter rail study.

Neither Dunleavy, nor former Sen. Mark Begich have distinguished themselves by placing the Permanent Fund Dividend above all else in state government during this campaign and acting as if everything else is secondary. It doesn’t work that way after the campaign nonsense ends and governing begins.

Of the two, Dunleavy is worse because his plans are a complete fiscal fantasy, while Begich has been more realistic.

For Dunleavy, keeping everything as vague as possible is the best way of hiding difficult choices about reductions in public services, the imposition of taxes and the risk of the next fiscal collapse.

Republicans in the Legislature, most of whom accepted the dividend reductions as did Democrats, would probably not want to be seen as trying to slow down the giant Dunleavy dividend. Enough Democrats would probably go along to make it happen.

With Dunleavy leading the way, this would destroy the fiscal discipline necessary to keep the fund for future generations and keep a tight hold on annual withdrawals—the only way to preserve the fund. The needs of the moment have the upper hand when getting elected is all that counts.

The Permanent Fund is large enough that the full impact of excessive early withdrawals would not be seen until long after the current crop of elected officials has been replaced.

The Permanent Fund belongs not just to those alive at this moment, but to future generations, who have no say in how it is managed.

Dermot Cole4 Comments