'Into the Valley of Death Rode the Six Hundred'

Listening to a discussion of state positions to be eliminated under the Duleavy budget, I thought of the “Charge of the Light Brigade” by Alfred Lord Tennyson. There were numerous references to “the 600.”

“Was there a man dismayed? Not tho’ the soldiers knew, Someone had blundered.”

“Someone had blundered” applies to the Dunleavy Debacle, a budget plan that won’t go over well when nearly every member of the Legislature finds a reason to oppose all or part of it, ranging from school cuts in every community, to dismantling of the University of Alaska.

Visiting budget director Donna Arduin told the Senate Finance Committee that Gov. Mike Dunleavy’s budget would eliminate about 625 jobs from a portion of government, though the exact number seemed to be open to question. The Associated Press said the right figure is 460.

But there is little point in focusing on this narrow slice of the job loss proposed by Dunleavy. It’s misleading.

Sen. Bill Wielechowski asked Arduin about an Institute of Social and Economic Resarch estimate that said public and private job losses from the Dunleavy budget cuts could reach 16,000. This would include the state, school districts, local government, the ferry system, health care, etc.

Arduin challenged the number, not with research, but with supply side thinking.

"Reading of that analysis it takes into account one side of that equation, which is an analysis of the resulting reduction in government jobs,” said Arduin.

“But the analysis does not take into account the other side of the equation, which I referenced earlier in the presentation, which is the benefit to the private sector of having more money through dividends and having less money going to government and or available and less threat of tax increases or taxes to private activity."

She said that Ed King, economist for the Office of Management and Budget, will research the question, and provide analysis to prove her point.

“Again, the reduction of 600 government jobs will be more than offset by the positive effects to the private sector,” she said.

The comment about the “other side of the equation” puzzled ISER economist Mouhcine Guettabi, one of those responsible for estimates of a total job loss ranging from 16,000 to 20,000.

“Of course the losses will be in the thousands,” he said, when I asked him about Arduin’s view of “the 600.”

“Our analysis examines the initial government losses as well as those accrued by the private sector,” said Guettabi. “Also, the 600 number does not account for the university, K-12, health care, etc. I honestly do not understand the offsetting job gains being referenced. We are talking about eliminating $1.6 billion in spending. Total payroll for oil and gas is $1.7 billion, retail $1.1 billion.”

It also doesn’t account for the ferry system or for what local governments might have to do to offset the proposed state confiscation of $420 million in local property tax revenue from oil and gas facilities.

“The private sector is not isolated from the government losses. People eat, buy things, etc. There is no conceivable way under which eliminating that much money from an economy that is already struggling actually helps it. I would love to see this analysis that shows that,” Guettabi said.

The thousands of state and local government workers, as well as thousands of private sector employees whose jobs may be eliminated have been placed in a tough spot, leaving them uncertain about the future.

“Theirs not to make reply. Theirs not to reason why. Theirs but to do and die. Into the valley of Death, Rode the six hundred.”

Dermot Cole4 Comments