A fresh, more productive approach to legislative budget analysis?

Until proven otherwise, many legislative observers are saying that Alexei Painter, the young director of the Alaska Legislative Finance Division for the past five months, is the real deal: A knowledgeable, politically neutral, good-faith analyst working to inform the Legislature about the realities of the state’s budget.

He’s somewhat of a rarity in liberal-washed Juneau.

Just after being hired by the Legislature, Painter produced his first comparison of where the State of Alaska’s fiscal situation is at, weighing the matters of current policy and current law.

He presented the current Legislature’s policy as one in which the Permanent Fund dividend is the last item funded by the Legislature. But he did so without judgment.

On Friday, he presented a clear-eyed analysis of the governor’s proposed budget, which had been submitted to the Legislature in December. His analysis was neither friendly toward it, nor full of “tone,” as sometimes was the case with his predecessor David Teal.

“The overview provides a starting point for legislative consideration of the Governor’s spending and revenue plans. It does not discuss the merits of budget plans; it focuses on outlining the fiscal situation and presenting the budget in a way that provides simple, clear information to the legislature,” Painter wrote. Indeed.

Painter went on to describe how Alaska is in its ninth straight year of deficit spending.

“Though the State has reduced UGF expenditures by 43% over that time and increased revenue by setting up a structured draw from the Permanent Fund, we still face a structural deficit. During this period, the State has gone from $16.3 billion in reserves to under $1 billion at the end of this year.
The Governor’s FY22 budget request is smaller than the FY21 budget (other than the Permanent Fund Dividend) but still leaves a deficit of over $2 billion, which the Governor fills by increasing the draw from the Permanent Fund beyond the statutory sustainable draw,” he wrote. In fact, that is the case.

“The Governor also draws an additional $1.2 billion from the Permanent Fund for a second dividend payment in FY21, for a total of $3.2 billion in overdraws from the Fund,” he wrote.

That, too, hard to argue with. It’s just the facts.

“The Governor recognizes that this is unsustainable, however, and in his budget release he emphasized that these draws are necessary because of the COVID—19 pandemic. The Governor’s long-term plan calls for balancing the budget in FY23 by adding $1.2 billion of unspecified new revenue, reducing the dividend by $400 million, and further reducing agency operations,” he wrote.

The unspecified new revenue is something that has caught the attention of others, as well. The plan seems vague.

“The legislature faces dual problems: a state struggling with a historic pandemic that has caused record unemployment and economic hardship, and a long-term budget crisis that has drained the State’s budget
reserves. The incoming legislature faces difficult choices that will have a lasting effect on the State of Alaska,” he wrote.

Painter fills in a role recently vacated by Pat Pitney, who is now interim President of the University of Alaska system, and David Teal, who was the budget guru for the Legislature for 22 years, who seemed to lose patience with the Republicans in the Legislature during his final few years, while siding with Democrats who sought broad-based taxes, such as an income tax or state sales tax.

Painter returned to the Legislative Finance Division after serving as a Policy Analyst with the Alaska Office of Management and Budget. He had earlier served for more than five years as a fiscal analyst, senior analyst and capital budget coordinator for the Legislative Finance Division. And he was an economist for the Alaska Department of Revenue. He and his wife own a small bookstore in Juneau, Rainy Retreat Books.

Although he most certainly comes from the Democratic tradition — the son of State workers and a former aide to Reps. Beth Kerttula and Reggie Joule — Painter has found a way to present budget choices in a nonpartisan manner.

A member of CIRI, he is especially interested in Alaska Native issues, and appreciates what policy has done to better the lives of Natives.

“When I think of how Native policies were implemented, I really think about how lucky we are as Alaska Native people. For the most part, we have the opportunity to live close to our original lands and enjoy our traditional values, if we so choose. Compared to California, we have a much better ability to control our own destiny,” he told the CIRI blog while he was finishing up his master’s degree at U.C. Berkeley.

See his budget overview and reports at these links: