Begich is right—Dunleavy numbers don't add up. But where are Begich's numbers?

Former Sen. Mark Begich is right that former Sen. Mike Dunleavy’s portrayal of Iceland as the model for Alaska leaves out the inconvenient truth of taxes.

In a forum in Ketchikan Wednesday, Dunleavy said Venezuela is failing because of poor leadership, poor management and bad policies.

Conversely, he said that Iceland is prospering because of good leadership, good management and good policies.

It has “no oil, no gas, no gold, no silver, virtually no timber and they’ve got an incredible economy based on tourism.”

“They were a fiscal capital of Europe up until a couple years ago. It’s an incredible place. And why do they do it? Or how do they do it? Because they have great management. They have great policies. They have great leadership. They are able to harness the resources they have in their country. Their unemployment is virtually zero. It’s below two percent.”

He said Alaska has bad management and bad leadership. Resource development will fix everything once he is governor. It’s a message based on what he thinks people want to hear, instead of an analysis based on reality.

Begich tweeted that Dunleavy failed to mention that Iceland has a personal income tax rate as high as 46 percent. “Alaskans you’ve been warned—Dunleavy’s numbers don’t add up,” Begich said.

Begich, who didn’t mention the 24 percent sales tax in Iceland, is exactly right. Dunleavy’s numbers don’t work. He won’t talk about taxes. And he won’t provide any specifics about how he would cut a half-billion from the state budget.

Last week he was promising $450 million in efficiencies that would mean no reduction in services. But as I have written here, the savings are an illusion based on faulty information.

He also promises bigger dividends.

There is no Dunleavy fiscal plan beyond feel-good pledges for bigger dividends, lower spending and future oil development.

There is no Begich fiscal plan beyond feel-good pledges for bigger dividends and using half of the Permanent Fund earnings for education. He should come forward with details of what taxes Alaska needs to create a balanced fiscal plan.

Begich has at least revised his public statements so that he is no longer saying that taxes “might” be needed after he makes government more efficient and saves unidentified amounts of money.

“Last, we will need some funding. We will need some revenue,” he said Wednesday. The lack of specifics on taxes from Begich is comparable to the lack of specifics from Dunleavy on budget cuts.

They take that approach because no one calls them on it.

Gov. Bill Walker has offered specific tax ideas, all of which died in the Legislature. Some combination of his unpopular ideas on the dividend and taxation are needed to create a balanced fiscal plan.

“I don’t like taxes at all, but somehow we have to figure out how we’re going to pay for the services that we want,” Walker said. “We want a safer Alaska. We all want a safer Alaska. How are we going to pay for that? And we all want improvements in our state infrastructure, deferred maintenance. How are are going to pay for that?”

The mistake that the state has made for decades is tying the entire state budget to the amount of oil income, which encourages overspending when prices are high and creates a crisis when they are low.

“Without a full fiscal plan it’s really hard to have the stability, the peace of mind going forward,” Walker said.

Dunleavy and Begich haven’t come close to Walker in proposing a reasonable plan to fund state government services, a target that won’t be reached without taking unpopular actions.

Dermot Cole2 Comments