Candidate Dunleavy never saw need for $1.6 billion cut

During his campaign for governor, Mike Dunleavy offered voters a pleasing picture of larger Permanent Fund Dividends, more Troopers, more criminals in jail, better schools and painless budget cuts of $400 million to $500 million that no one would notice.

He falsely claimed the state had 2,000 empty but funded jobs that could be cut to save $200 million. He claimed the state could save $100 million with a voluntary plan to consolidate school district health care plans. He claimed that making Medicaid more efficient would save $150 million.

That was the three-part painless plan to get the budget down to where it could be sustained, about $4.1 billion to $4.3 billion. He said the budget would be balanced in no time because oil production would increase by hundreds of thousands of barrels per day in the next few years.

I wrote about his imaginary budget numbers in considerable detail.

In a debate in Juneau on Sept. 6, he said that the price of oil was high enough that his 2017 talk of cutting $1.1 billion was irrelevant, and new oil was on the way, so there was no need for gigantic cuts.

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

Dunleavy served on the Senate Finance Committee during most of his five years in the Legislature and spent countless hours on the inner workings of the state budget.

He now claims that what he said during his campaign about those painless $400 million to $500 million budget cuts was wrong because he didn’t understand enough about the state budget. He’s not putting it in those words, of course, but that’s a fair interpretation of what he told Alaska News Nightly.

He now claims we need to cut the budget by $1.6 billion because oil was $74 in early September and now it is about $61.

“I had no access at that time to the inside workings of government,” he told Alaska Public Media, referring to the much smaller budget cuts he offered in his painless plan during the campaign.

“I was not part of the administration. Now that we see where we’re at, we understand where our revenues are at, we’re going to put together a responsible budget that have expenditures not exceeding revenues. And I think that’s what people wanted when I was running for office.”

I was going to say that this is the most absurd and flimsy argument a veteran state senator could possibly make to justify a reckless plan to cut state services, one conceived after the election by an imported budget director with no connections to Alaska.

(Any member of the public has easy access to state Department of Revenue information showing that a $1 per barrel drop in the price of oil meant a loss of about $75 million a year in revenue. No access to the inside workings of government? Nonsense. Check the document below for the relationship between oil prices and revenue.)

But here is a flimsy claim that surpasses that one. Dunleavv is telling reporters that he is not cutting the budget at all. He is building a new budget, a much smaller budget, but it is new so there are no cuts.

Brilliant. This will fool everyone in the first grade.

“What we’re doing with this administration is, we are not cutting,” Dunleavy told KTVA. “We are building a budget from the bottom up, from zero up. We’re going to build that up to where we reach our revenues.”

Changing the words won’t erase the reality of budget cuts and jobs lost. Mouchine Guettabi, an economist with the Institute of Social and Economic Research, says about 20,000 public and private jobs could disappear with a $1.6 billion reduction.

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Dermot Cole8 Comments