Dunleavy budget forces Alaska Republicans to face wrath of Alaskans

Here is an updated version of a column I wrote last fall about Gov. Mike Dunleavy’s history with miraculous budget solutions that don’t involve taxes.

Contradictory and implausible claims about state finances from Gov. Mike Dunleavy are nothing new. His track record in the Legislature included a series of unworkable budget ideas.

In early 2016, Dunleavy said everything would be perfect if we could cut the budget to $4.5 billion, excluding dividends.

He wrote that "we should be in a fairly good position to have a sustainable budget of $4.5 billion going into the future that could be sustained through the revenues we currently bring in as well as a draw on the earnings reserve account" of the Permanent Fund.

At that time it was an article of faith among Republicans that $4.5 billion was the magic number and it would lead us to nirvana with no cuts to the dividend, no taxes and no reduction in any service people cared about.

But by 2017, Dunleavy had a new magic number, one that required cuts of $1.1 billion over four years.

"Taxing Alaskans, and/or taking the PFD to cover the large fiscal gap is not necessary. Substantial reductions, however, are needed so existing resources currently at our disposal can be deployed to get us on a path to a sustainable budget," he said two years ago.

His said there would be "No income tax, no state sales tax, no broad-based taxes. No new taxes are required." The former teacher said his math had been checked by "several people."

With the statistics he distributed for his imaginary budget, Dunleavy included the comment that "future Alaskans can decide to tax themselves" if they wanted to.

He never identified what reductions he had in mind. His $1.1 billion fantasy would have eliminated at least 15,000 jobs across Alaska. Even his fellow Republican budget hawks thought he was promising the impossible, which is why it failed to advance in the Senate.

This was about the time that Dunleavy complained in a radio interview that he wanted people to stop asking "What do you want to cut?" as the first question. It made him uncomfortable.

He said the first thing to do was to figure out how much Alaskans wanted to spend, instead of dealing with all the controversy that comes with announcing cuts and getting attacked. Settle that spending number and the cuts would follow, he said.

"It's a lockbox. And then you kind of duke it out, if you need to … inside that lockbox," said Dunleavy.

During his campaign for governor, Dunleavy abandoned the 2017 plan for massive cuts and went back to something approaching the 2016 plan for a larger budget. About state spending, he said, “I do not have a specific program I would like to reduce or eliminate.”

But three months after the election, he claims that he made a $1 billion mistake in his campaign. He says the sustainable budget is now about $1 billion below his campaign target. He can’t explain why. “I was not part of the administration,” is not an explanation.

He also repeatedly made a $2 billion mistake in the size of the Permanent Fund earnings reserve, inflating its contents even on the day he took office, by $2 billion.

The press in Alaska, with a few exceptions, has failed to examine the details of Dunleavy’s budget pronouncements or check his ever-changing numbers.

That might change now that he is proposing to cut or eliminate all sorts of things that he never suggested he would cut or eliminate, giving every Republican legislator a chance to face the wrath of Alaskans.

Dermot Cole1 Comment