Dunleavy budget gimmicks take $900 million hit on Alaska local governments
State officials have always known that the easiest way to cut state spending is to force local governments to pick up the slack.
But all Alaska governors of the past have now been exposed as slackers in the pass-the-check game.
Gov. Mike Dunleavy has taken the lead with an assortment of budget gimmicks that would create an immediate $900 million impact on local governments, according to an analysis by the Alaska Municipal League.
This attempted sleight-of-hand, which candidate Dunleavy forgot to mention, has almost been lost in the ballyhoo about his plans to deal with the so-called $1.6 billion deficit.
The pending collapse of the gimmicks will make it harder to preserve the lie that Dunleavy actually has put forward a “permanent fiscal plan.” It’s not a fiscal plan and it’s not permanent.
“The governor’s proposed budget amounts to cuts, cost-shifting and clawbacks that amount to nearly $900 million as an impact to local governments,” wrote Nils Andreassen, executive director of the league of 165 local governments.
That total is for the next fiscal year alone. In the years ahead, add $2 billion with the cumulative impact of ending school bond debt reimbursements and rural electric subsidies.
The biggest items in the Dunleavy gimmick collection are the proposed heist of $440 million in petroleum property taxes and $32 million in fisheries taxes from local governments. The property tax heist from the North Slope, Valdez, Fairbanks, Kenai, etc., has received no hearings in the Legislature, which is appropriate for a bill that has a no chance of passing.
The same is probably true of the attempt to seize fish taxes from coastal communities, though that one has had a couple of hearings. There has been strong evidence about the harm the Dunleavy plan would do to 50 communities, but there has been no justification from the governor and temporary budget director Donna Arduin.
Dunleavy and Arduin have also failed to justify the plan to cut education by more than $320 million, most of which would fall on local school districts and municipal governments.
A majority of legislators don’t like the Dunleavy approach and most recognize that Arduin won’t be here to defend them if and when they decide to run for re-election.
Layoffs in the thousands and local tax increases would be the natural result of the Dunleavy gimmicks. The governor downplays the impact by talking only about the state workforce.
“The idea that we’re going to be cutting thousands of jobs—this budget I believe contemplates about six to seven hundred jobs may be reduced if this budget is fully implemented,” Dunleavy said in an Alaska Public Media TV interview.
That’s not the real story. The Legislative Finance Division analysis of Dunleavy’s budget says it would reduce 342 state jobs from the current fiscal year, which would mean a total workforce of 20,074.
But 268 of those jobs would be eliminated by privatizing the Alaska Psychiatric Institute, a transfer that is in limbo. That means the Dunleavy budget would actually lead to a net reduction of 74 state jobs in the next fiscal year.
This doesn’t count the thousands that would be lost in school districts, local governments and the University of Alaska under the Dunleavy/Arduin budget.
Dunleavy claims to have a permanent fiscal plan, but the gimmick collection is no more reliable than the fiscal fantasy he sold voters during his campaign—that they could have higher dividends, no taxes and no cuts in public services.