Jim Crawford: Legislature is hiding money and then asking for more - Must Read Alaska
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Jim Crawford: Legislature is hiding money and then asking for more

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By JIM CRAWFORD

The fourth Special Session of the Legislature sputters on. There are no discussions of the new facts, only repetitions of the hardened positions of conservatives who are advocates of a 50/50 formula like the one that served Alaska so well for 38 years vs the liberal opponents (whether they are called Democrats, Democrats disguised as Independents or RINOs (Republicans in name only).  

The pollsters tell me that 80% of those who intend to vote are pro dividend.  

The last time we Alaskans voted on this issue was 1999. As Permanent Fund Defenders, our job is to identify pro-dividend voters and anti-dividend legislators and prepare the troops for the upcoming battle and election to remove those who don’t work for the people.  

Legislative power brokers focus the public’s attention on continuing the budget shell game. Here’s reality: The only purpose of the initial budget is to be able to tell the constituents that you cut the budget. Then you’re free to decorate the Christmas Tree supplemental budget with enough cash to meet or exceed last year’s spending. That’s how incumbents say with a straight face, “I cut the budget.” They’re hiding the money and the blood trail exposes the game.  

Can we agree on facts?  

1. Audited financial statements of Alaska are prepared by independent accountants.  

2. Financial statements are the one true source of what was earned and what was spent.  

3. The Comprehensive Annual Financial Report is federal law that requires each state to report its audited income and expense for the prior year. That’s where the rubber meets the road.  

If you want reality in state spending, read and compare the budget with the CAFR.  If you screw up the CAFR report, the state loses all federal funding.  That’s a sledgehammer voters can use to smoke out the budget fabricators.  

Can we all agree that all dollars earned should be counted?  What is reported is the General Fund, a shrinking part of the overall financial income of Alaska.  And not all the earnings of the Permanent Fund.  Legislators’ favorite hidey hole is state agencies masquerading as dedicated funds.  

Alaska’s Constitution says you can’t have dedicated funds without a majority vote of the constituents. Legislative power brokers operate on a different theory.  If they’re not caught dedicating funds, they get away with it. Just ask former Gov. Bill Walker, who refused to transfer $199 million of royalty payments to the Alaska Permanent Fund Corporation.  

He also refused to transfer money owed to the Constitutional Budget Reserve according to Legislative Audit Director Kris Curtis: 

“State of Alaska’s General Fund rents and royalties are not reported in accordance with generally accepted accounting principles and management declined to correct the misstatements. Misstatements include an unreported General Fund prior period adjustment of $199.0 million for overstated General Fund royalty revenues of $99.8 million in (fiscal year 2018) and $99.2 million in (fiscal year 2019), and an understatement of $199.0 million due to other funds,” Curtis wrote in her Independent Auditor’s Report to committee members dated Feb. 22.

The root cause was the decision by Department of Natural Resources officials to transfer mineral royalty revenues owed to the Permanent Fund to the General Fund instead, according to the audit report. Additionally, the Constitutional Budget Reserve, the state’s primary — and dwindling — savings account “is materially misstated by $1.6 billion” and Revenue Department officials have also declined to correct the error”, she wrote.

But special interest groups continue to demand more money. I hope you caught the op-ed piece of the American Association of Retired Persons and Alaska Municipal League. The Alaska AARP Advocacy Director, Marge Stoneking and the Executive Director of the Alaska Municipal League, Nils Andreassen explained their advocacy to pour more money into the Alaska bureaucracy.  In their op ed, they identified Legislative leaders who cut the dividend and   agreed to tax increases.  

The private briefings were exclusively for Senator Jessie Kiehl, Peter Micciche and Natasha Von Imhoff.  The House briefings were for Representative Andy Josephson, Ivy Spohnholz, Bart LeBon and Adam Wool.  Thank you for identifying opponents of the dividend.  

The conversations were to identify the “broad based taxes as part of the broad-based revenue measures” (taxes), that would solve Alaska’s fiscal crises”. No discussion of future private sector economies or suggested cuts in Jabba the Hutt government.  For contrast, let’s look at the CAFR for Alaska. Audited financials bring reality. You can read them at: doa.alaska.gov/dof/reports/resource/2020acf.pdf.  

AARP and AML said they “were pleased to see the Fiscal Plan Working Group’s recommendation for adopting a broad-based revenue measure, in addition to other revenue measures, as part of a comprehensive solution. “Over the past five years, budget cuts have fallen heavily on local governments…”

According to the audited statements: “The total expenditures charged against General Fund appropriations during FY 18 amounted to $9.1 billion. There was a slight increase, $18.8 million, from FY 17.” 

“The total expenditures charged against General Fund appropriations during FY 19 amounted to $9.65 billion. There was a slight increase, $564.6 million, from FY 18.”

“The total expenditures charged against General Fund appropriations during FY 20 amounted to $9.83 billion. There was a slight increase, $178.2 million, from FY 19.”

For three of the five years, state expenses exceeded the budget and increased. Only in the Legislature would increasing the budget $762 million be a slight increase.

Neither the AARP nor the AML speak for the 75,000 seniors who had their dividends traded out for budget increases.  80% of Alaskans agree that the statute on the books should be honored.  Prior budget games resulted in a dividend less than half of what it should have been.  

No thanks.  Senior — and all Alaskans — can choose to spend our dividends without that help.    

Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage with Terri, his editor and bride of 38 years.  Jim is President of Capital Alaska LLC, a statewide commercial lender which analyses and may sponsor projects of sustained economic growth for the Alaskan economy.   Mr. Crawford, known as the Permanent Fund Defender, was a member of the Investment Advisory Committee, appointed by Governor Hammond to plan and execute the Alaska Permanent Fund Corporation.  

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Latest comments

  • Only need to get people out to vote instead of sitting home and b!t*h*ng. Rest assured, the progressives will be getting all of their votes out, sometimes again and again.

    • Get out and vote on the Dominion vote flippers with the rigged rank choice system, the same system that said that Sleepy Joe “Won” Anchorage. We swear it will work this time!

      • Oh, I’ll just mail back the pre filled ballot instead.

  • Jim, I had a chance to speak with a State Senator recently – he presented the fiscal crisis issue in a false dichotomy: “We don’t have enough money, so we have to steal the PFD or pass a broad-based tax.” I asked him what would happen if we doubled pipeline throughput… “Problem goes away,” he replied, “but the feds won’t let us.” We got interrupted and I couldn’t finish the discussion. The Alaska Statehood Act of 1959 says that Alaska is to be “admitted to the union on an equal footing with the other States in all respects whatever”… I believe we have the right to pump OUR oil, and the feds have no right to the quantity of land they control in Alaska. Past time for Alaska to sue the feds. Fill the pipe, stop with the legislative smoke and mirrors. Put the PFD in the State Constitution.

  • Thanks for your timely update, Jim. Rather suspected China flu hysteria was a smokescreen for something else.
    .
    Talk about hiding money in plain sight, the Alaska Municipal League Investment Pool has, as of October 21, $521,005,177.68 of taxpayers’ money ratholed out of taxpayers’ reach.
    .
    Alaska’s Lobbyist Directory shows the Alaska Municipal League Executive Director, Nils Andreassen, makes a pretty penny as AML’s lobbyist.
    .
    One member of the Alaska Municipal League Board of Directors is Suzanne LaFrance, who’s also Chair of the Anchorage Assembly.
    .
    Potential for significant conflict of interest seems obvious.
    .
    Alaska’s Lobbyist Directory shows the state director/lobbyist of the AARP Alaska gets $69.12 hourly, another AARP lobbyist gets $55.29 hourly.
    .
    Works out to about $258,772.80 yearly just to stiff Alaskans, whose lives and livelihoods were wrecked by China flu hysteria, with an income tax…

  • There are two things that must be done to deal with the annual legislative goat roping in Juneau:
    (1) Put the PFD in the state constitution; amount and stated justification
    (2) Create a two year budget like the state of Texas has.

    Why? Every year we witness the same insipidly stupid argument in the legislature over the amount & purpose of the PFD and then lurch into the food fight over the same amount of money each year. A two year budget would give everyone respite to deal with other matters of importance to Alaskans.

  • Alaska is corrupt to the point of death. Not only will we never see the full PFD again, income taxes are inevitable.

    Greed and entitled, indeed Natasha.

  • Thanks for that Jim. Most of us will not take the time to read the audit.

  • Everything Crawford says here is true, and he understates the imbalance as the CAFR doesn’t recognize many postponed commitments. The state budget goes up every year yet the Daily News, Public Broadcasting, Juneau Empire, and Newsminer say the budget has been cut; they often say drastically cut. The state loses money on RR, missiles, campgrounds, ferries, etc. The state funds schools whether local taxpayers contribute or not. Walker threw out the Hammond PFD formula, so here we are. Total state spending is almost $20,000 per man, woman and child! At less than 500,000 barrels a day, six small to medium mines, a very seasonal tourism industry selling trinkets and t-shirts made anywhere but here, and a very subsidized salmon industry our economy could barely support $2,000 per man, woman and child,. We need to elect people who will tell the truth and honestly reduce the size and scope of state government.

  • I am glad someone finally tells it like it is.
    Why aren’t people listening? We all know this is happening but sit back and take it up the chair cushion.
    Just like phony elections! We all know who really won!

  • And next year we will see a vehicle tax, 2% at least
    Tax and spend legislators that hide behind smoke and mirrors.
    We need to vote them out

  • The link to the CAFR page is missing a letter – the link should be:

    “http://doa.alaska.gov/dof/reports/resource/2020acfr.pdf”

  • Taking $1 billion General Fund out of the $13 billion state budget (all funds) is entirely reasonable. Only municipalities and nonprofits, with their six and seven figure lobbyists, disagree.

  • THIS is exactly why we voted (twice) to move the Capitol to the Valley. So we can sit in the audience and watch these thieving snakes and their shenanigans.

    We don’t have an earning problem, we have a spending problem. WAY too much state government eats up our Dividends.

  • Corrupt, disgraced ex-governors are good at hiding money, just as they are good at trying to hide their Lt. Governors from underage girls. Well, maybe not so good, as in the case of Bill Walker. Retired bankers also know how and where to hide money. Voters should demand a FULL AUDIT of the state’s treasuries. Thank you, Jim, for your continued fight.

    • Scott Kendall was in charge of hiding Byron Mallott from the media. It worked for a short while. Now, Kendall is in charge of hiding Mallott’s corpse.

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