Some 275 business leaders attended Gov. Michael Dunleavy’s budget presentation at the Anchorage Chamber of Commerce on Monday. The room was at capacity for the Make It Monday Forum.
They heard the professorial Dunleavy, with a rapid-fire command of facts about a budget that had, year after year, dug the state into an Alaska-sized hole with a government that tried to be all things to all people.
They heard the policy wonk Dunleavy speak for 40 minutes without notes, walking the audience through a series of charts and graphs that described the choices the state faced when he was sworn into office, and what he decided to do about it. Oil was up to $85 a barrel in October, but down to less than $55 by the end of the year, a 35 percent drop in three months. His budget, with all its amendments due in February, needed to reflect the honest reality of where revenues were actually going to be.
And they heard the — dare we say — humble Dunleavy explain that he laid out his initial budget to get a conversation going around the state. That conversation is going, he acknowledged, getting a chuckle from the audience.
“It’s been a good discussion,” he said.
If they listened carefully, the business leaders might have also heard the Dunleavy who was signaling he has the ability to compromise on spending with the Legislature — if he gets to put his constitutional amendments on the ballot so that the people can actually vote on them:
- Should there be an income tax without a vote of the people?
- Should there be a spending cap on government?
- Should the Permanent Fund dividend be constitutionally protected?
If the people want to pay more than $5,000 apiece to the state government every year, then he’s fine with that, he said. If they want to donate part of their Permanent Fund dividend to state government, that’s OK, too, he said.
But as with Colorado’s TABOR amendment (taxpayer bill of rights), the people should be allowed to make such important decisions.
The banquet hall in the Dena’ina Center was respectful and attentive, in some ways a room of people getting their dose of cod liver oil — they didn’t necessarily like it, but they were going to try to not make a face.
But they were also discovering something else: This was not the governor they’d been told about by the mainstream media. This was a guy who had complete command of the budget situation, unlike his predecessor. And while they may not have liked the hard truth of the message, they could not argue with the math.
Dunleavy didn’t blame former Gov. Bill Walker, but he said that excessive spending over the past four years had drained $14 billion from the state’s reserves.
At this rate of spending, in a few short years the Permanent Fund dividend will be no more, even under SB 26, the restructuring bill that passed in 2018, he said.
He also said that Walker’s solution had been to impose new revenues in the form of income and other taxes, and to slice the Permanent Fund dividend in half. Dunleavy said that approach was not supported by voters.
Dunleavy said he came into office and worked the budget from the other direction — figuring out what revenue was available, and then providing all the government that could be provided for that amount.
After 40 minutes and seven questions from the audience, Dunleavy may have even won a few converts from what is typically a moderate Anchorage crowd. He at least earned some grudging admiration.
On Tuesday, it’s off to Glennallen, Tok, and Delta Junction for the same discussion with other Alaskans, as he leads the fiscal solution discussion far and wide across the state.