Even though I am a numbers guy, I realize that numbers don’t make good campaign slogans. However if we are going to separate fact from fiction, the numbers can’t be ignored. We need to ask: how does that work? What does it cost to provide the services we want and guarantee all Alaskans the largest sustainable dividend? Only the Walker/Mallott team is providing honest answers – and that should matter to every single voter.
The fiscal crisis that Gov. Bill Walker inherited was long in the making. That state had lived on a single highly volatile commodity to fund services for over 30 years. When oil prices dropped from over $100/barrel to less than $35/barrel, the revenue coming in no longer came close to covering the cost of essential services. Our credit rating plummeted, investment dried up, and Alaska businesses paid the price. Rather address the problem, the legislature blew through $14 billion in savings and misled the public into believing that the fiscal crisis was political fiction. To many, winning elections became more important than fixing the problem.
In contrast, the Walker administration told the public the truth. For four years, the governor fought for a sustainable fiscal plan that would provide economic stability and protect the longevity of the dividend. They brought state spending to its lowest level since 2007 by cutting over 100 programs, 40 facilities and 3,000 positions. That helped, but still left a multi-billion dollar deficit. Without decisive action, it looked inevitable that the legislature would end up spending money from the Permanent Fund, eventually drawing it down entirely. So the governor and both chambers of the legislature capped the dividend, and passed legislation that provided for a sustainable use of permanent fund that would protect a sustainable PFD.
Under Walker’s leadership, Alaska is no longer a state that crashes with the prices of oil. We’ve gone from a budget that was over 90 percent reliant on oil to one that is less than 30 percent reliant on oil revenues. Eighty percent of the deficit is closed, our credit rating is restored, and every Alaskan will get a PFD that is larger than average, and projected to keep growing.
The two other candidates in this election have done substantial damage to years of effort to educate the public about the fiscal situation. They propose “plans” that avoid the truth, seeking to capitalize on anger without offering real solutions.
Mike Dunleavy says we can keep the historic dividend formula and simply take the “other half” of earnings as a draw for government. It sounds great but in fact is not mathematically possible. An historic dividend plus the draw necessary to fund essential government services creates a far larger draw on the permanent fund than is sustainable over time. The Permanent Fund is not a magical, endless pile of money, and providing services in the largest and most remote state in the country is expensive. Dunleavy’s campaign promises would increase the deficit by almost $1 billion. He says he will make cuts to balance the budget but the simple truth is that there aren’t $1 billion in cuts to be made without eliminating basic services like safety, education, and infrastructure. There’s a reason he won’t be specific about the cuts he’d make: he can’t make them.
Meanwhile, out of one side of his mouth Mark Begich criticizes the decision to reduce the PFD but out of the other, he offers a plan that includes a reduced PFD. His numbers don’t add up. His proposal for a 50/50 split would increase the deficit by $350 million. How will he pay for it? He promises unspecified “efficiencies” and revenues only as a last resort. But when pushed for more details, Begich remains as non-committal as Dunleavy.
The Walker/Mallott team has had the courage to put forward a comprehensive fiscal plan every year since taking office. They are the only ones who have demonstrated the courage to grapple with the numbers, tell the public the truth and offer real solutions. They won’t give you tall tales, and poll driven double speak. They will give you real numbers and real solutions. That’s leadership, that’s statesmanship, that’s what we should demand from our governor.
• Randall Hoffbeck is the former commissioner of the Department of Revenue. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.