PALMER — As Gov. Mike Dunleavy spoke to 61 assembled listeners at the Palmer Moose Lodge on Wednesday, he detailed the justification for his first budget.
Released Feb. 13, 2019, Dunleavy’s first budget attempted to match revenues with expenditures, a campaign trail promise. During Dunleavy’s second attempt this fall, he rolled out a flat budget, instead shifting the burden of conversation to elected officials.
“We tried to demonstrate that in order to fix Alaska through reductions, it’s going to take a lot of agreement and it could be painful for some. Many people in Alaska did not like that, so this year we rolled out a flat budget. We rolled out a flat budget because we want to have that conversation with the legislature,” said Dunleavy.
Dunleavy discussed a myriad of issues during his nearly hour of lecture-style historical analysis of Alaska’s economy, the journey through statehood and its strategic position as a hub for shipping. Dunleavy spoke no ill words of former Governor Bill Walker, but noted that his repeated attempts at introducing a tax had failed. Prior to being elected, the price of oil was above $80 a barrel in October. When Dunleavy assembled his cabinet and administration in December, the price per barrel had dropped below $60 a barrel.
“We had to make some difficult decisions quickly.This was one of the bigger reasons why we rolled out the budget that we did. It was a budget that quite frankly, honestly shocked a lot of Alaskans. It was a budget that caused a lot of consternation and discussion that still reverberates today, but nonetheless it was a budget that demonstrated that our government is this big, we have revenue that’s this much, $1.9 billion, and then you have one or two ways of dealing with this. Either reduce the size of your budget or increase your revenue,” said Dunleavy.
Dunleavy’s main takeaway was that neither resource development nor preservation of lands should exist on their own.
“I believe we can do both,” said Dunleavy repeatedly.
Dunleavy discussed a myriad of minerals, metals and rare earths found in Alaska and the development possibilities of mining alongside the possibilities of renewable energy. Dunleavy spoke without facetiousness about Alexandria Ocasio-Cortez (D-NY) thinking that an economy should be moved away from fossil fuels and built around renewable energy. Dunleavy discussed using renewable energy in rural Alaska and the Eklutna hydro project among his arguments that both can coexist in Alaska. Overlaid on the topics of resource development and land preservation was Dunleavy’s discussion on the changing politics globally and particularly on the West Coast of the United States.
“The politics on the west coast are changing when it comes to resource development, especially fossil fuels and right now the way it looks is Alaska is the only sovereignty north of Mexico that is still friendly to resource trans shipment and development,” said Dunleavy. “You’re getting all these groups across the country, more and more and with social media it’s becoming for lack of a better term weaponized. You have people that have never visited Alaska, never seen Alaska that are now pouring money into causes and groups to stop resource development in the state of Alaska.”
Dunleavy discussed the decision by the Seattle City Council not to do business with others doing business in the Arctic and Goldman Sachs recent decision to do the same. Dunleavy said that Goldman Sachs officials will be traveling to have a discussion with Dunleavy and his administration about their decision. Dunleavy noted what he referred to as a renaissance in the arctic, pointing to the $1.1 billion invested just this year.
“If you want programs, if you want jobs, if you want a future for Alaska, if it cannot develop its resources which was the very reason why we purchased Alaska and which was the very argument we made to the federal government to allow us to become a state, I need some ideas in how we’re going to make Alaska a viable state going into the future for our kids and our grandkids because what a lot of people would like is to turn Alaska into a national park, a big preserve,” said Dunleavy. “The question I have for people as we move forward is how are we going to pay for the services that we want. How are we going to create the Alaska that we want for our kids and grandkids if we cannot develop and why would we not want to develop here in America, in the state of Alaska to provide jobs for Alaskans, to provide wealth for Alaskans, to provide revenue for our programs and to protect the environment.”
Dunleavy noted that Alaska is only a nine-hour flight to any industrialized area in the northern hemisphere and lauded the growth of Ted Stevens International Airport. Among other cargo and shipping pontifications, Dunleavy questioned if a Naval presence may be in Alaska’s future. With an Army and Air Force presence as well as a Coast Guard to protect more miles of coastline than the rest of the United States combined, Dunleavy presumed that a warming arctic and increased cargo would require a Naval presence in Alaska. As always, Dunleavy said that he would be continuing discussions with elected officials and Alaskans to determine the best way forward as the second half of the 31st legislature starts next week.
“It’s changing so rapidly. We’re going to need to work closely together, all Alaskans to craft an Alaska we can all be proud of, not just for today but for our kids and our grandkids,” said Dunleavy.