Dunleavy changes story again on radical budget Senate GOP rejected two years ago

Seven months ago, candidate Mike Dunleavy told a Juneau audience that he had abandoned his radical 2017 plan to cut the state budget by $1.1 billion because oil prices were high enough to allow for higher spending.

So I was surprised to hear him say Tuesday that if only his plan had been adopted two years ago, the state would be on Easy Street.

During the campaign, Gov. Bill Walker questioned Dunleavy about the former senator's announcement in early 2017 that the "path to fiscal sustainability" required a gigantic budget cut of $1.1 billion over four years.

Dunleavy’s fellow Republicans in the Senate believed it was too radical and that Alaskans would want no part of the cuts in services required under his plan as soon as he was forced to reveal specifics about education, the ferry system, health care, etc.

He never identified services to cut two years ago, but promised that “taxing Alaskans, and/or taking the PFD to cover the large fiscal gap is not necessary.” At the time he said he would be happy if people stopped asking, “What do you want to cut?” as the first question.

Without identifying his targets, he proposed cuts of $300 million annually in fiscal years 2018, 2019 and 2020, and $200 million in fiscal year 2021.

During the debate last September, Walker pressed him on what services he would cut to save $1.1 billion.

“I’m still not sure where you’re going to cut an additional $1.1 billion out of the budget as the budget was on Jan. 12 of 2017,” said Walker.

That’s when Dunleavy said he had abandoned his 2017 plan. There was no need to cut $1.1 billion because oil prices had risen and the problem had vanished, according to Dunleavy.

He told Walker he had only proposed the $1.1 billion in cuts “when oil was at $26 a barrel” and that cuts of that magnitude were not needed with higher oil prices.

"Today it's at $74 a barrel. You don't need to cut a billion dollars today, in today's environment,” he said last September.

“What we need to do is make sure that we get the budget down somewhere in the neighborhood of $4 billion and then that, if we do that, we could sustain a budget growing at about $70, $80 million a year.”

Walker corrected Dunleavy on oil prices. "The price of oil in January 2017 was not $26. It was nowhere near that," Walker said. He said he would keep asking the same question about the $1.1 billion in cuts at every forum.

We know now there were not enough questions and not nearly enough answers during the campaign.

Candidate Dunleavy never said anything about eliminating the ferry system, making major cuts to schools and the university, confiscating property taxes and fish taxes and eliminating the subsidy for the Pioneer Homes.

I mention this because at a press conference Tuesday Dunleavy changed his story once again on the $1.1 billion plan. Now he is portraying it as a lost opportunity.

He lamented the refusal of the Legislature to go along with his ideas in 2017 and said it would have saved us from our current financial problem.

”I submitted a concept when I was in the Senate on a step-down approach, which would have gotten us there if the Legislature adopted it,” he said. “And we’d probably have about $4 billion more in our savings and we’d have a sustainable budget.”

Remember that he never identified what he wanted to cut or the consequences of his cuts. That means we have no idea what the $4 billion would have come out of.

Budget confusion remains the problem with the Dunleavy approach today—he won’t defend details of his budget cuts and wants to talk only about the Permanent Fund Dividend, setting up a showdown with legislators who see the flaws in his plan, just as many did two years ago.

He wants to have Alaskans vote on constitutional amendments that deal with only what he wants to talk about, suppressing an equally vital discussion on public services, taxes and the tradeoffs that make governing far more difficult than Dunleavy ever acknowledged with his $1.1 billion fantasy plan.

Dermot Cole6 Comments