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.