The Governor's Roadshow in Wasilla

I attended the governor’s roadshow where he walked the audience through a powerpoint slideshow that explained the reasoning behind his budget and then answered questions submitted by the audience. To his credit, he allowed the tough questions to be read. But he didn’t seem capable of answering them with anything but variations on the need to cut spending because we have a big deficit. Particularly absent was any consideration of a multi-pronged strategy. He convincingly explained that an income tax wouldn’t fix the problem, and that using the PFD wouldn’t fix the problem. But he never explained why we couldn’t use a combination of budget cuts, an income tax, and a portion of PFDs.

As a lifelong Alaskan, I have heard stories of wasteful government spending, and on occasion I have seen it first hand. I recognize we need to cut the budget. On that, Governor Dunleavy and I can agree. Where we differ is on how much and how to go about handling the rest of the deficit. The vast majority of Americans pay a state income tax. Indeed, that vast majority of conservative republicans pay a state income tax. Why should Alaska be any different? Alaskan’s have survived with smaller PFDs. Why can’t we now?

Governor Dunleavy also neglected to mention the $400+ million in federal funds the state will forfeit by repealing medicaid expansion. That’s money that will completely vanish from our economy. That’s health coverage for 50,000 people. That’s 3,700 jobs that disappear. That’s houses on the market as people are forced to move in order to find work and a blow to the private sector as the demand for new construction declines. And that’s just to save 30 million a year.

My biggest criticism is that the governor and his team haven’t done their homework. He mentioned increased enrolment in homeschool programs, but that is actually one of the most expensive ways to educate students once you take into account a parent must forego working. He mentioned privatizing the marine highway, but has no idea if that’s economically feasible. I would have loved to see him come prepared with a long list of specific things we could do as a state to save money. For example, what’s his plan for reducing specialist medical procedures that sometimes cost 10 times more in Anchorage than in Seattle? Unfortunately, his modus operandi appears to be cut first, ask questions later.

He claimed a spending cap would signal to investors that Alaska wouldn’t institute a predatory tax on businesses in the future. But spending caps can be changed. All else being equal, if I were an investor, I would choose a state that had an income tax. A fiscally responsible state government would have a diverse revenue stream. That would provide the fiscal certainty that businesses need in order to have the confidence to invest in our state.

Every once in awhile I hear people give Dunleavy credit for starting the debate. I consider his actions irresponsible. Just releasing his budget has created enough uncertainty that Mat-Su regional has already put $67 million in expansion projects on hold. That’s real work that Alaskans will miss out on this summer.

It is not fiscally responsible to increase the size of government handouts when we are trying to balance the budget. It is not responsible to push the costs on to local governments. It is not responsible to deprive local governments of their ability to collect their fair share of taxes. It is not responsible to deprive people of healthcare. And it is not responsible to deprive this generation of their right to an education.

Whether we like it or not we are going to pay one way or another. We are going to pay in the form of more local taxes, more expensive higher education, a less skilled workforce, a poor healthcare system, more crime, more homelessness, more drug addiction, or a reduced PFD and/or an income tax.

We can try to solve our problems by giving everybody $3000 and hope that they’ll be able to fend for themselves, or we can invest in services that have a bigger bang for the buck than we could possibly achieve on our own.