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Sunday, December 15, 2019
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Legislature: Correct the spending problem

By DAN SULLIVAN

I have been a keen observer of the Alaska political scene for more than five decades, including 15 years as an elected official.

The recent special session debacle represents perhaps the most dysfunctional several weeks of our state government in ‘’inaction’’ as I have ever witnessed.

Unlike many pundits and editorial writers, who try to lay the blame on the 22 legislators who convened in Wasilla, the real problem was with the majority of legislators who decided to ignore the governor’s proclamation declaring a special session and identifying the location outside of Juneau, as he is allowed to do by statute.

What could possibly have been accomplished by convening in Juneau? The majority lacked the 45 votes necessary to overturn vetoes. The majority even lacked the 40 votes needed to call their own special session.

Clearly, the cards were held by the minority and the governor, and they were in Wasilla, ready to work with the majority on possible compromise solutions. The majority members were like my friend Bob, who went to Vegas and promptly sat down at an empty poker table and demanded to play. He was politely informed that you have be at a table where the cards are being dealt.

It is my belief that if the majority had gone to Wasilla and engaged with their colleagues, they would have likely agreed on restoring certain budget items through veto overrides and could have likely got the governor’s concurrence as well.

Instead, they engaged in what I consider to be a childish power play, essentially saying, ‘‘We’ll meet where we damn well please, even though we will accomplish nothing in the process.’’ Many members of the majority group are friends and people I have politically supported over the years. It is time for these folks to swallow a little pride and work with the other 22 members for the good of Alaska.

Therein lies the rub, of course. What is best for Alaska and in particular, what is the fate of the Permanent Fund dividend? The people of Alaska have diverse opinions on this hot topic and legislators are clearly torn about the path forward as well. Is it the people’s money, the rainy-day fund or some combination of the two?

Many Alaskans are clearly skeptical of letting government get its hands on another source of revenue, and given the unsustainable spending of the past 15 years or so, it’s not hard to sympathize with that position. This is even more evident when the spending over the last few years has been funded by using our savings accounts to pay for recurring costs. It’s not how any of us would ideally fund our household budgets.

What has been lost in the discussion is the fact that Alaska has been in this position several times in the past few decades, generally as a result of crashing oil prices.

We survived these down times by tightening our belts and becoming more efficient. We survived without once tampering with the statutory formula for calculating dividends. In good times and bad, the formula has worked for Alaskans.

Like the price of oil, the investment returns that fund the PFD has had its highs and lows and Alaskans have seen dividends as low as $600 and as high as $2,200. Alaskans accepted the dividends, both high and low, because they believed in the fairness and honesty incorporated into the formula.

We accepted the results because we knew that politicians wouldn’t be able to access the fund and spend it like they have done with the Constitutional Budget Reserve. Armed with a court ruling, our legislators and the previous administration have broken that trust and the money grab is on.

One thing I have learned about government is that it will spend every dime you give it, justify it, and ask for more.

I urge our legislators, particularly the rogue majority, to sit at the table where the cards are being dealt, and work with the governor and minority members to correct the spending problem that is threatening Alaska’s financial future.

Dan Sullivan is the former two-term mayor of Anchorage.

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  • Had all Legislators gone to Wasilla we would not have this CBR sweep problem. The sweep only became a problem because the House Finance co-chair earmarked certain seemingly vital projects for funding only by the CBR. She must have thought her gamesmanship would force the Minority to cave. She was wrong and now we have the CBR sweep problem. One pure reverse-sweep vote would have fixed this problem – easily.

    • I suggest you watch Gavel Alaska as Senate Finance is discussing this issue right now.

  • Yessir we saw a bunch of amateurs show up in that Thrilla in Wasilla and watched a clown show that resulted in two powerful majority leaders lose their leadership positions. And we’ve also seen that it was the Gov. who caved in favor of the Juneau site, where Alaskans can watch what goes on with Gavel Alaska. Further, we’ll get to see if it’s a spending problem or a PFD problem.

    • I think both spending and the PFD is a problem. The more that Alaskans are attacking each other over “their” PFD, I’m more inclined to think maybe it’s time to use it specifically for more mental health, substance abuse, and more technical training options for unskilled or unemployed folks and those in jail who can’t afford or don’t want to got to the University. Hopefully, more mental health options would decrease the number of suicides Alaska has. Substance abuse options would hopefully keep people out of jail and decrease crime. And no one can get a decent job without some kind of training. More welders, medical assistants, phlebotomists, etc. that the State needs.
      And yes, the State has a spending problem. Every new Gov likes to hire their friends or big-donors.. Nearly every department is top-heavy, including Gov Dunleavy, and full of (over) paid administrators. I support many of the University’s programs (College of Health or UAF’s Arctic Research, for example), but not all their Commissioners, Assistant Commissioners, et al. I support our public school teachers earning decent wages and decent benefits, not all those administrators (the median education administrator, as of May 2018, is $107,720 whereas an Elementary School Teacher median wage is $74,070).
      Our Governors and legislature members, of both parties, have spent exorbitant amounts of money on boondoggle after another. The State is full of waste, you just have to look. Yes, the State has both a spending and a PFD problem, IMO.
      Here’s my cite: http://live.laborstats.alaska.gov/wage/

      • Remember here S that in order to keep these employees one must pay according to what they could earn in other States. You may not believe that education administrators deserve their wages but you are talking Principals (for the most part here) and they are already qualified teachers and have extensive administrative training to boot.
        Evidently you think we can get some South American refugees to take up some of these positions. That was a joke, by the way.

        • Dear Mr Yankee – How many principals do you think one school needs? It seems in this day and age most schools not only have a principal but a couple, at least, vice principals. With that said, how is it that as the highest per student spending in the nation we are not anywhere near the top in performance? Despite having a majority of skilled teachers? Our PS system is big big big business and far more expense than it needs to be and there is more going on than reading, writing, and arithmatic’.

          • Well Elizabeth it does take more than just a principal for high schools and I remember having a vice principal who dealt with disciplinary issues back in the 50s in Spokane, WA (I graduated in 61).
            But of course you have voted yourself the resident expert on school administrators and their need. That is based on your training, where exactly?

  • Say it with me.
    .
    Cuts. Cost. Money.
    .
    I know it’s counter-intuitive I know some will read that and say “what?! of course they don’t cost anything, less is less” You know because state budgets are just like home budgets when times get tough you buy less stuff.
    .
    But complex budgets aren’t like home budgets. The governor’s reckless and feckless actions have caused the UA to have it’s credit rating lowered. That means it and ultimately we will pay more for the same services. Just like when a credit card company blows up your APR. You pay more for borrowing the same money. It’s pure waste.
    .
    Think on that a second — the governor’s stunt has created government waste.

    • There in lays the problem UA needs to restructure their own finance. You can not continue to spend money on an institution that fails to keep their accreditation i.e. UAA teaching programs. That shows ineptitude on their part to think if they do not follow rules and guidelines how can we expect them to be financially responsible.

      • Or perhaps we are starting to realize that UA doesn’t have a problem? That it’s the leader in arctic research and that boosts the economy of Alaska?
        .
        Let’s be honest, the people who have a problem with UA don’t care that it makes money for the state they dislike gender studies and the like and the so called financial problems provide an excuse.
        .
        The lawsuits, the loss of grants, the loss of tuition, the opportunity costs. These cuts are expensive.

        • Your comment is incoherent. Those of us who support absolutely support consolidated, accredited teaching and nursing programs, as well as the STEM courses in which the UA system excels, as well as the traditional canon which actually produces well-rounded, educated adults, correctly want to cut useless programs which do not “make the state” any money and actively take money from real programs by “needing” a host of non-teaching bureaucrats, in addition to the waste of time and money paying unnecessary teachers to teach unnecessary classes in functionally useless neo-Marxist “critical theory” (the opposite of critical thinking) nonsense.

          • Without your specifically showing that those “unnecessary classes in functionally useless neo-Marxist ‘critical theory’ nonsense” exist other than in your mind, yours is the comment that needs repair IMO. You should have these classes on the tip of your tongue Mathew Carberry-let’s have a few, just off the top of your head!
            Wouldn’t we all want to be on the committee that chooses which courses qualify as useful but your comment hasn’t shown the incoherent bit about the above poster IMO.

    • Good grief. Dear Mr Clown- the review that lowered UA’s credit rating was occurring before the current ‘cuts’. There is no way any such agency can work that fast. UA has been struggling with financial and management issues for longer than our current governor has been in office.
      You can twist it any way you want but here are some hard facts for you to chew on while you are playing clown –
      —Alaska is 1st in the nation in per capita government spending
      —UA state funding exceeds the national average for state university state funding by 250%
      —Almost half of our state population receives some form of government assistance
      —Government does not produce, the private sector does
      —You do not own the subsurface rights to your property – just had to throw that in.

      • What’s that phrase? You are entitled to you own opinion but not your own facts.

        You are spreading false information. I hope you are doing so unintentionally. The decision was made after the cuts. Yes, credit agencies can work that fast. And they did. You have a credit card, right? You know how quickly they change your rate? Try it for yourself– give your card company a call and say “my income was reduced by 40 percent” and see what happens.
        .
        Here is the evidence from the horse’s mouth. The decision was made after the cuts and was tied to the cuts. By the agency that made the decision:
        .
        https://www.moodys.com/research/Moodys-downgrades-University-of-Alaska-AK-to-Baa1-and-Baa3–PR_905955903

  • Well Dan,
    If you want to “tighten the belt” why not start with the subsidies (i.e. Corporate Welfare) that is handed out to oil companies in the form of over $ 1 Billion dollars a year in “tax credits”?
    “Rising spending and huge deficits are pushing the nation toward an economic crisis…
    One good place to find savings is spending on corporate welfare.
    Some people claim that business subsidies are needed to help fix market failures in the economy.
    But corporate welfare is just as likely to create failures by misallocating resources and inducing businesses to spend time on lobbying rather than on making better products.
    Corporate welfare transfers wealth from average families to favored businesses, and it creates corrupting ties between government officials, politicians, and business leaders.”

    https://www.cato.org/publications/congressional-testimony/corporate-welfare-spending-vs-entrepreneurial-economy

    • Great post, Steve! I agree with you. Billionaire corporates are also spending less on their workers’ wages because their money is spent on lobbying. Corporate welfare is also making it harder and harder for small- and mid-side companies to compete.

    • You take away from the private sector you kill all revenue generation. Without private sector you have no economy government does not create jobs only deficit.

    • Saying that oil companies are subsidized by the state is completely 180 degrees from the truth, especially when speaking of Alaska. Oil companies provide the vast majority of the revenue the state of Alaska brings in. Nationwide government from cities, to boroughs and counties to states, and even the federal government make a massive amount of money from oil companies…they make this money in the form of taxation. If the government decides to not tax something as much or they offer tax credits these are not subsidies. When you get your tax return this is not the government subsidizing you, it is the government giving some of your money back.

      • To keep you honest here Four-flusher, here is Wikipedia definition of “government subsidy:” “A subsidy or government incentive is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy.”
        You have unknowingly described (perfectly) how these oil cos. are government subsidized. Heheh!

        • Only an ignorant person would think taking money away from a company or an individual and then giving it back to them is a subsidy.

          • Four-flusher, the only issue is the giving of credits to certain Oil cos. for their expenses related to exploration. And some of these companies are not paying anything as yet so there is no taking as you suggest. Get it straight rather than just make stuff up.

    • Furthermore, high tax states even know that lowering their taxes or offering tax incentives or credits results in economic growth that far offsets the uncollected taxes.

    • A good point – particularly the lobbying point. I do not though see tax credits as corporate welfare but as incentive for growth, investment and development. Albeit you make compelling argument I still feel tax credits free up corporations to hopefully add more to the economy down the road. Our state still has a spending problem whether we allow for tax credits or not.

  • Well-reasoned statement. What the misfits in the majority coalition has been doing will be remembered as ignoble and pathetic.

  • The Amateurs you speak of where the only ones in the legal place to start with the ID10TS where i the wrong and as such should be punished to the maximum extent. Removal from Office by the Voter will happen for some if not all. If you want the government to have more money send your PFD back and if they try and take the PFD then the government should give us owners of land are mineral rights back.

  • Lord 15yrs of your hands on and Alaska has declined. U admit it yourself . I am sure U R one of AK’s over paid untouchables, that ART Chance tells us about. Folks I can show how Dan Sullivan has wasted thousands abusing disabled man that beat him in court. Using his buddy Kevin Saxby turned Judge and the Anchorage public defenders office to withhold all facts over a decade of dishonesty and he wants to talk about being childish. I have blatant proof

  • This article confused me as I thought it was by Senator Dan Sullivan, until getting to the very bottom of the page where the author identifies himself. Then it made sense.

    When a name is common to two political figures, it is very helpful (not to mention more honest) to identify which person is the author at the TOP of the article. Thank you.

  • At least this article touches on the initial purpose and funding of the Permanent Fund – to take the money out of the hands of government officials. Why are we so dead set on letting them take it now? This was not the intent, and I personally do not trust that my government is looking out for my best interests. Cut the damn budget already. People will lose their jobs. People may even move out of state. Tough times are tough times, trying to avoid it by taking what was never theirs is only prolonging the pain. I have never been so disappointed in the idiots running the show, why did they go to Juneau when that wasn’t what they were tasked with? The Governor was simply trying to avoid paying all these yahoos a per diem, most legislators wouldn’t be eligible to receive it if the meeting was in Wasilla. So they go to Juneau to get their per diem, and the idiots supporting them don’t understand why it’s such an issue that we pay them so damn much to NOT do their job. Well done, you’ve helped make a mockery of our state while the world looks on at the infant in the corner throwing a fit because they can’t come to terms with the fact that, NO, they can’t just do whatever the hell they want. Voting these idiots out of office does not even come close to rectifying this infantile debacle.

  • So when does the Governor’s OMB sit at “the table” and answer questions?

    • great question

  • Mayor Dan, what’s this “Correct the spending problem”? Shuffle bits, bytes, bucks, “problem” solved, live happily ever after?
    .
    Your tenure wasn’t memorable for gently depersonalizing lawbreaking, theft, corruption, public-safety threats, so don’t start now! Productive Alaskans may well need your help to continue what Governor Dunleavy started and it’s another leader they’ll be wanting, not a feckless Great Compromiser.
    .
    What devil’s “compromise” do you propose with The Party of Hillary Clinton, Baby Butchery, Obamacare, Benghazi, Fast and Furious, Medicare for all, the silent coup d’etat, open borders, human trafficking, drug trafficking, outright lies, free services for illegal aliens, mob rule, Antifah, et al.?
    .
    You’ve a contingency for when (not if) The Party renege on your “compromise”?
    .
    What’s the “good of Alaska” balanced against demands of movers and shakers who spend $20M annually on Alaska’s lobbyist army which is apparently worth its weight in the buying or leasing of legislators, or against demands of public-employee union-management teams and their “news” media, and their PAC’s?
    .
    My friend the only “rub” seems, sadly, to be the friction between utter corruption and reasonably manageable corruption.
    .
    Have you not read Jim Crawford’s articles on mountains of money local governments stash safely out of taxpayers’ reach?
    .
    Have you not seen commentaries on the ocean of money stashed safely out of taxpayers’ reach in the Alaska Municipal League Investment Pool?
    .
    Then there’s the Denali Commission, plumbed straight into the U.S. Treasury (assuming Alaska’s congressional delegation behave properly), commissioners of which include the Associated General Contractors of Alaska, Alaska Department of Labor and Workforce Development, Alaska Federation of Natives, Alaska Municipal League, University of Alaska, and Alaska’s AFL-CIO… “Double, double, toil and trouble”, no?
    .
    Never mind the Denali Commission kinda lost $100M which nobody can find, still they get money and you get the idea…. Big, renewable bucks are there and only the Six Families say who gets what.
    .
    So… All to the trough, more than plenty for all, may the cat eat them and the devil eat the cat…
    .
    But naught for common folk who simply want their damned royalty checks, for what’s set by law, without the gobshite gospel that seems to accompany everything -not- awarded automatically to the ruling class?
    .
    There’s your “problem”: More money than our Comrade Legislators can spend in a lifetime, and they want more!
    .
    What would you do about that, Mayor Dan? If, say, the wearing of gloves were optional?

  • The locust cares not how hard the farmer works. The parasites will consume it all

  • AMen

  • A well written article and I agree with it. Then I saw who the author was and I was shocked that I fully agreed with former mayor Sullivan. I would never have guessed that would have happened but here it is. Thing is, this is a perfect example of what he wrote about in his article about people needing to compromise. You can learn a lot from other people if you just force yourself to listen and set aside your preconceived notions and biases against that person or group. It isn’t easy, it is hard to do, especially if they wronged you. But, at the end of the day you’ll be better for it and will be more more likely to have accomplished something worthwhile.

  • I would like to thank the Governor for moving the session to Wasilla where some local folks without a company expense account could attend. It was a cowardly act by the 38 outlaws to meet in Juneau (their pleasure palace) for an unproductive session. It was against the law and the outlaws blew through their 5 days for a veto override. So all the fault for our Alaska’s lack of a budget falls in their dishonest laps. The Governor decided an adult needed to make something happen so he called the Juneau session. Keep in mind the folks that assembled in Wasilla earlier are not going to vote your way. The Governor can and should VETO your sorry ass budget bill AGAIN. You work for the people and not the labor unions and their lobbyists. Get real. You only need to cut less than 10% from a budget that funds a university that can’t keep its education program accredited and a marine highway system that can’t figure out how to make a profit on a bar.on a boat Really!!!!

    • Yes, how nice of your (Wasilla based) Governor to move the session to Wasilla so ‘some local folks could attend’. At the expense of the rest of the state. Do you think most of us can take the time or spend the money to travel to Wasilla ? Because Juneau is set up for excellent recording and broadcast capacity, the rest of the state — including Wasilla — could tune in, watch, and listen, either in real time or at whatever time was available to them, to the speeches by the majority of the Legislature. The few clips I saw of the Wasilla set-up were pretty rough and the audio almost inaudible due to the background noise, poor acoustics, and use of cheap handheld microphones. The logistics just didn’t work well and calling the legislature to Dunleavy’s hometown looked like feckless opportunism to those of us in other parts of the state.

      (For the record, I was in favor of the proposed capital move to Willow, but that didn’t happen, so we have to go with what we’ve got, which is that the seat of Alaskan government is located in Juneau.)

  • You can always tell how effective an article is by the number of Marxist Trolls showup to post.

  • It’s sad that uaa lost teacher program accreditation. How bad do you have to be for that to happen?

  • Nicely written article Mayor … SPOT-ON! Clearly, the Legislator’s only want to “steal” the PFD from Alaskans so they don’t have to be perceived as ‘Draconian Budget Cutters’ and, only the Governor and his Administration are fighting for an ‘equitable’ PFD, for Alaskans as well as fighting to ‘Right-Size’ SOA Government..

    Of course, we’ve had the M-Ski’s voice their superior opinions:
    … “I am shocked and disappointed at the callous manner in which Gov. Mike Dunleavy’s Administrations … let down Alaska’s brightest and most promising students.”
    … “Precipitously cutting these scholarships is a significant violation of trust.”
    … “One can only speculate on the impact the Administrations and Legislatures actions may have on the University’s students’ future educational dreams, and most disturbing, their faith in State Government.
    Obviously, he had his day at the wheel with a whole different set of circumstances and he had his chance to contribute something of significance. HOWEVER, what he offered, and what we ended up with, was Daddy’s Little Princess and Alaskans are burdened (shackled) with this disappoint – embarrassment.

    Yes Indeed, we have an ongoing crisis, specifically with respect to Faith & Trust!!!

  • They come out of a different fund. Money is there as soon as Bryce votes on it.

  • Let`s keep feeding the monster and see what happens.

  • As someone relatively new to the state I find it hilarious that a Republican governer and anti-state Republicans are defending a socialist policy that is known literally everywhere else in the world as Universal Basic Income. It’s even better that he’s willing to destroy the state in order to make sure everyone gets a few extra hundred dollars this year. I hope the punchline to Mr. Dunleavy’s joke is as good as the setup has been.

    Loving every laugh.

  • Someone relatively new to the state should first learn how to spell “governor”,
    .
    study the genesis of the Permanent Fund Dividend,
    .
    learn the difference between socialism’s universal basic income and capitalism’s dividend income,
    .
    Then, if popular rebellion against Socialist Democrats’ best efforts to destroy Alaska yet remains a source of hilarity, returning to one’s relatively old environs might be well advised, no?

  • The fairest way to settle the battle over the Permanent Fund Dividend is for everyone to receive the full amount. Then we can all spend it for what we want and need. You can even donate to whatever cause you choose. I don’t appreciate other people making that choice for me.

  • Dan, that is a straightforward and very readable memo. Our family thanks you for it. You were right on target! A long time friend of mine who is gone now, Geo Sullivan , would give you two thumbs up too!-b

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