Dunleavy gives first State of the State address

Governor Mike Dunleavy must have been channeling Clint Eastwood in his first State of the State speech last Tuesday, Jan. 22. “If you are a criminal, your days are numbered. This will be a dangerous place,” the governor said.

Tough-on-crime will be one of his top priorities. “There will be no more coddling,” Dunleavy warned.

Dunleavy laid out a lot priorities to legislators, who were meeting in a joint seaaion: The list included new crackdown on crime, a state budget that balanced revenues, a guaranteed Permanent Fund dividend, and to give the people a vote on any new tax proposal or change in the Permanent Fund dividend.

The governor wasn’t clear what kind of taxes he was referring to. Could oil and gas taxes be put before the public for a vote?

Dunleavy outlined a series of commitments and priorities in his speech: “I’m governor today because of the campaign promises I made to the people of Alaska on the issues most of us believe in. I’m here to do exactly what I promised to do. What I told Alaskans I would do,” Dunleavy said.

Stopping the rise in crime is a top priority, but there are others: “We’re going to declare war on criminals. We’re going to get our spending in line with our revenue. We’re going to protect Alaskans’ PFDs (Permanent Fund dividends). We’re going to grow our economy and put Alaskans to work. And we must restore public trust in government and elected officials,” Dunleavy said.

To restore peoples’ trust Dunleavy will propose three constitutional amendments, he said. “One will be a (budget) spending limit and a savings plan. A second will be no change in the Permanent Fund dividend without a vote of the people. A third will be no change in taxes without a vote of the people,” Dunleavy said.

On spending, Dunleavy said “Alaska’s budget is a mess. Expenditures far exceed revenues. We can no longer just ‘kick the can down the road’ on this, waiting for another oil boom. Those days are over. My administration will bring forth a budget that Alaskans can trust,” he said.

“In order to address the fiscal issues that have plagued our state for years, we need a permanent fiscal plan. A plan that will put our state on solid footing for decades to come,” Dunleavy told lawmakers.

Overall, the governor was upbeat on Alaska’s prospects but he warned that financial belt-tightening is essential to future stability and prosperity.

The governor did not elaborate on what he will propose Feb. 13, when the revised budget is due, but Dunleavy said it would consolidate and eliminate duplicate programs, among other measures. The basic outline of the governor’s plan seems to call for a $1.6 billion reduction in spending from the state’s current budget, which is about $4.7 billion in state funds.

In his address to lawmakers the governor’s toughest words were on crime. “Our primary responsibility is to keep our citizens safe. We know crime is out of control,” he said.

Alaska’s rate of sexual assault is among the nation’s highest. “New York City’s rate of sexual assault is 28 per 100,000 people. Anchorage’s is 132 per 100,000 people, five times the rate of New York City,” Dunleavy said.

“Let that sink in. The women and children of Alaska must be safe.  We can no longer stand by and allow this to happen. Our murder rate is horrific,” he said.

The governor pledged a number of new tough-on-crime bills, with the first initiatives to be introduced in the Legislature on Wednesday, Jan. 23. “It will include a rollback, a repeal-and-replace, of SB-91,” of a law passed by the Legislature in 2016 that many blame for coddling criminals and causing crime to skyrocket.

“SB-91 broke the peoples’ trust,” Dunleavy said. “I promise you now, what I promised during the campaign. Things will be different, things will be very different. Together we are tasked with righting the wrongs that have broken the trust of the Alaskan people.”

He said state government, under his leadership, will be compassionate as well. For people who are troubled by addiction and other issues, “we will provide assistance,” he said.

“Politicians often talk about policies and laws, but what Alaskans really care about, are jobs, opportunities and individual freedoms,” Dunleavy said.

The governor’s proposed constitutional amendments will be a heavy lift for the Legislature, however. Asking the public to vote for or against a tax increase is likely a nonstarter because the state Constitution charges the Legislature with the responsibility to determine public needs and raise revenues to meet them.

There may be legal ways that voter approval of taxes could be done but it would create huge uncertainties for legislators working to fund a budget. In all likelihood voters would vote “no” most often.

On the spending cap, legislators have wrestled with concept for years, and there is a spending limitation now on the books, written years ago, but it is considered ineffective in today’s world of budgets and revenues. Recent legislative efforts to update it have failed after lawmakers got bogged down in the details of the proposals. One problem is that there must be flexibility for unexpected circumstances, such as an earthquake or an accident that damages the trans-Alaska oil pipeline. Most of Alaska’s revenue still comes from oil moving through the pipeline, and if the oil flow is interrupted even temporarily there can be big budget impacts.

Despite the complexities, legislators will likely take up the governor’s proposal for a spending limit, as well as putting the PFD into the Constitution. There are issues with this too, however, mainly in whether a constitutional priority for the dividend will crowd out other expenditures that are constitutionally mandated, such as eductation and public safety. As well as it plays to the public it may be difficult to get the required two-thirds vote of both the state House and Senate to approve putting the question on the ballot.

Democrats in the Legislature were measured, and even upbeat, in response to Dunleavy’s speech, or at least parts of it."I am encouraged that Governor Dunleavy promised a permanent fiscal plan, promised to protect the PFD in the Constitution, promised to make our communities safe, and opposed subsidies and tax credits. I look forward to a budget proposal from the Governor that fulfills his promises,” said Senate Democratic leader Tom Begich, D-Anch.

"For our state to truly address crime, support a strong education system, maintain the health of our citizens, and create hope and opportunity, we need a budget that meets our constitutional obligations. I hope his does," Begich said in a statement.

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