Gov. Mike Dunleavy has done what none of his predecessors ever considered. He’s divided Alaskans who qualify for the Permanent Fund Dividend into two classes: Those who still get the money free of charge, and those who have have to give something up to get it, including some who stand to lose a lot more than they’ll get back.
That’s the effect of his $400 million of line-item vetoes that the legislature couldn’t override.
The story isn’t finished yet. The legislature can pass a bill that pays out $1,600 instead of the $3,000 or so per the statutory formula Dunleavy has made non-negotiable. However, he’s already promised to veto that too.
A few days after the budget vetoes were announced, former Attorney General Jahna Lindemuth catalogued how they irresponsibly target public health, welfare and education. She pointed out the supreme irony between Dunleavy’s “war on criminals” and his $6 million veto to the Village Public Safety Officer program. Taken collectively, she wrote, they violate Article VII of the Alaska Constitution.
Whether she’s right or wrong is an argument for lawyers and judges. But it’s clear to me Dunleavy has trampled on the spirit of the constitution’s promise “that all persons are equal and entitled to equal rights, opportunities, and protection under the law.” He’s placing an unequal burden on some, so he can give all Alaskans the full PFD.
This isn’t an entirely new situation. When Gov. Bill Walker vetoed of a portion of the PFD appropriation in 2015, the reduced payout caused greater hardship to families and individuals struggling to make ends meet. However, the income tax he proposed was intended to distribute the pain more uniformly. The legislative majority refused to consider it or any of the new taxes that were part of his plan.
Ignoring Walker’s attempt to solve the budget crisis is the first fiction of what Dunleavy calls “our state’s fiscal reality.” The others are that new state taxes aren’t an option. And using any of the Permanent Fund to pay for state government is inconsistent with the law.
So it’s on the backs of some residents that the rest of us will “earn” the extra $1,400 in our PFDs.
To understand how wrong this is, think back to 2008 when Gov. Sarah Palin added the $1,200 resource rebate to the dividend. It was originally proposed as an “energy rebate” to offset the record high cost of oil. Imagine the public outcry if residents with the highest heating bills got a bigger rebate. But as Rep. Bob Lynn explained, changing it from “energy” to “resource” allowed us all to get the “same amount of money disingenuously dressed in different language.”
Dunleavy is no less disingenuous by claiming he’s giving us all an equal dividend. Because “to contain costs and reduce dependence of individuals on state funds,” he vetoed the entire benefit program that provided $76, $175, or $250 each month to about 11,000 low income seniors. The full PFD will effectively give only $116 of that back.
Meanwhile, there’s about 20,000 millionaires living in Alaska who aren’t being taxed to get their full share.
The massive $130 million veto from the University of Alaska’s budget led to furlough notices being sent to about 2,500 UA staff members. For many, the loss of income from two weeks of unpaid leave will be more than the extra $1,400 in their PFD check.
And they’re the lucky ones. According to the chancellor of the Anchorage campus, up to 700 jobs, including tenured faculty positions, are likely to be eliminated. Dunleavy’s veto that suspended the state subsidy for school bond debts means layoffs are likely at the K-12 level too. The Alaska Head Start Association estimates the veto to that program will cost 150 jobs.
And job losses are likely to stretch all the way into the private sector
What’s worse is Dunleavy isn’t finished. “With an overall reduction of $678.8 million this year” he says, “next year we can close the state’s remaining deficit of $730 million.” Which means to keep his artificial fiscal reality afloat, he’ll be further dividing Alaskans between the class that’s freely entitled to the PFD and those of whom he demands a sacrifice.
• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector. He contributes a weekly “My Turn” to the Juneau Empire.