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Saturday, January 18, 2020
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Sen. Giessel gives vision of next session in front of resource crowd

THE QUEST FOR THE $100 BILLION PERMANENT FUND

By ART CHANCE

I can’t remember the last time I was up bright and early for a 7 am meeting, but there I was at the Alliance/Resource Development Council breakfast, listening to Senate President Cathy Giessel deliver a presentation on the upcoming legislative session that can best be described as the “same ole.’” 

The room was full of movers and shakers, wannabes, politicians, and media. The crowd was polite, but no more, for Giessel, who is the political equivalent and has all the bedside manners of Nurse Ratched. 

On the way out I asked a friend, “If she were a Democrat, what would she have said differently?”   We agreed that had she been a Democrat she’d have probably railed a bit about increasing oil taxes but otherwise any Democrat would have made pretty much the same pitch. 

Speaker Bryce Edgmon was supposed to attend with Giessel, as the two are inseparable these days. But he was a no-show, having begged off for illness. He didn’t need to be there anyway; Giessel did a good imitation of a Democrat.

She couldn’t tell us enough about the wonderful collaboration she has with Speaker Edgmon. 

Senator Giessel didn’t give any details but hinted at proposed cooperative agreements with the village or regional corporations for “local control” of education in the rural areas. 

For those who know anything about the Indian Self-determination Act, this looks a lot like the scheme in which the federal government gives federal money to tribes and other tribal/Native entities and the entity runs the programs. 

Of course, that is precisely what the Regional Education Attendance Areas are supposed to do.  Giessel tried to justify it by saying the locals would run it at least as well as the State. 

But the State doesn’t “run” rural education; it sets some standards that it barely enforces and sends the money to the local district/REAA, which is exactly the way federal agencies manage Indian Self-determination Act grants and contracts.   

My money-laundry detector is going off on this one; if they want to have even less control than the State already has, then they are aiming for no control at all.

Then there was talk of revenue and taxes, taxes, taxes and in this portion we got a cameo from Giessel’s sidekick, Sen. Finance Chair Natasha von Imhof.  They were a tag team on the latest revenue fad — the magic $100 billion Permanent Fund.   

Giessel says if we stop with that nasty Permanent Fund dividend, we can get the Fund to $100 billion in 14 years, while von Imhof says 18 years.  I know people who think we could get most of the way to $100 billion in the corpus with a stoke of the governor’s pen ordering an honest accounting of the money currently in the State’s hands, and sweeping all of the appropriated but unexpended funds, sub-funds of the General Fund, and all the various other funds listed only in the small and obscure print in the Comprehensive Annual Financial Report, if listed at all.  

I’ve been saying for years that the State was stuffing money in coffee cans and mattresses. When the Department of Revenue, the Division of Finance, and the Office of Management and Budget gives the Legislature and the plebes that “General Fund Revenue Available for Appropriation” figure, they’re telling you what they want you to know. In fact, there is a whole lot of money laying around out there in various hidey holes and slush funds.

 $100 billion in the corpus is purported to be the level at which we can support recurring spending on Permanent Fund earnings alone, at least in good years, with no regard for revenue from other sources.  

They whispered a few sweet nothings about that requiring spending limits, but you knew they really didn’t mean real limits.

I’m usually critical of binary propositions; few things are as simple as Door A or Door B, but this is truly a binary proposition: The Republican president of the Senate either thinks we are too ignorant to deal with State finances so she can’t tell us the truth, or legislators are themselves too ignorant and self-absorbed to understand State finances.  

I worked for the Legislature awhile and dealt with them I lot; I well knew that if you couldn’t reduce it to three bullet points and give them a plausible deniability strategy if anything went wrong, you weren’t getting anywhere with the Legislature.

I didn’t hear a thing in the presentation that hasn’t been around for the 45 years I’ve been in Alaska. Back in the Gov. Jay Hammond era, the whole idea was to turn oil revenue into the revenue created by the oil revenue.  We’ve been talking about who should run rural education since the Seventies. We’ve been talking about whether or not to have an income tax since the first barrel of oil flowed. We’ve been talking about general or special “temporary” sales taxes for just as long. 

The people who “run” this State are like the elites in DC: They’re famous for being famous and powerful because they are powerful. And they are clueless.

If you did not catch the presentation, word is Giessel and Edgmon was the program for the Democrats’ Bartlett Club meeting at noon at the Anchorage Senior Center.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon.

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  • I’d appreciate finding out where all the money in the “ various hidey holes and slush funds” is that Governor Dunleavy’s OMB and Legislative Finance can’t find…

    Asking for a friend.

    • Well, I doubt you’re a friend or asking for a friend. Both OMB and LegFin are mostly congenital Juneau ‘crats who think Democrat governors are the natural order of things. They’ll play honest, but only if you know how to ask them the precisely right question. LB&A did a damning audit of DNR’s SFY 17 finances in which they conclude that DNR held on to $1.6 Billion in a sub-fund that should have been placed in the PF Corpus. There are similar examples everywhere. Oh, and LegFin isn’t under the Governor’s direction; talk to Giessel and Edgmon.

      • The university did the same thing with unoccupied staff positions. UAF in particular would fund all authorized positions, but not put people in those positions. It amounted to a multi million dollar slush fund.

      • I think Governor Dunleavy knows better and is a competent enough executive than to allow a bunch of nefarious deep state actors within OMB to hide bunches of money under his watch when he’s aware of our state’s fiscal situation.

        • Yeah, right.

    • Ok
      step 1. Contact Jim Crawford
      step 2. Ask him to send you his work on this.

  • If the villages or regional corporations want “local control” of education in the rural areas then they should provide the funding. The notion that the state should provide education funding to villages or regional corporations without control over how the money is spent is insane. It is a formula for waste and corruption. Long ago I learned that he who pays the bill determines how the money is spent.

  • So you are saying she never mentioned working cooperatively with the governor? How about the rest of her caucus, did she say nothing about that? Wondering…

    • The only thing remotely good that she said about the Governor was how wonderful it was that he was collaborating with Sen. Begich on the education scam they seem to be cooking up.

  • Thanks, Art, for opening our eyes even more re the R leadership in the senate. I have serious problems with the state making cooperative agreements with the village or regional corporations for “local control” of education in the rural areas. The Native corporations/villages will just go to the federal govt (taxpayer) and get loads of money and they will ALSO demand the same funding they get from the state as well. This parallels the Medicaid Expansion scheme by Valerie Davidson, DHSS Commissioner, who wanted ME to backfill the BIA/Indian Health Service funding from the feds. Question: What will happen to those non-Native kids in the Alaska Native run rural schools? Will they be excluded? Will these children be required to learn Native languages, cultures, etc? This reeks of money grabbing at the expense of Alaskan children and their education.

  • I am impressed by your ability to spend half your article bashing Giessel for supporting Dunleavy’s rural education proposal without once mentioning Dunleavy by name.

    This is some next-level propaganda.

    • Well, actually, I bashed Tom Begich for being an avaricious Democrat and Dunleavy for being suckered into it, but Suzanne is nicer than I am. But then, we can ask what cookie jar you have your hand in. If you’re going to act like a tough guy; use your whole name.

    • I’m good at this stuff.

  • Giessel and company are in their own world…..not the one you and I live in. She tried the same screwball speech with the retired federal employees, and the comments on the speech afterwords were “pity” Giessel in her confusion. The plan should be to get another person in the job for that district she is from. That would be the best thing to happen. Last year, her community wanted to get rid of her and they haven’t changed their minds yet.

    • Do they have a strong candidate to primary her?

  • Independent auditors are what is needed to put last administration and its governing board of trusties — if you can call them that — under the microscope!!! All these democrats want is to keep spending without constraints.

  • Senator Cathy Giessel sent me a fundraising letter last month – a featured appeal item was “putting the brakes on State spending.” I think she means they didn’t raise spending as much as they wanted…
    They won’t stop at taking the entire PFD – they want all of it – the corpus too.
    No one is talking about expanding oil production and bring new fields on line, and WHEN that might happen and what it will do for State revenue. We have been warning for 35 years not to grow government too large to support after the oil slows down.
    Fill the pipe, pay the full PFD. Congress, stop stealing.

  • Giessel is a hack, and definitely not a Republican. She lies to her constituents and she is an embarassment to the Republican party. She needs to be voted out of office, and the sooner the better.

    • Giessel won’t be Senate President after the upcoming session. Her own family told me this.

      • Cathy Bohms Giessel. Got it!

  • Thanks for your perspective Art

  • Giessel is not a thinker. And certainly not a conservative. Her roots are in Fairbanks, from a family of hard, union Democrats. Her daddy was a Wien pilot and walked picket lines when the union wanted 3 pilots in the 737 cockpit. Wien said no. Giessel, a trained RN, is most comfortable giving commands and being in charge. Probably a good charge nurse. But a leader in the Republican Senate…? No. Her predecessor, also a Fairbanks Republican, had a much steadier hand with better leadership credentials. I met Giessel’s son years ago at a Libertarian meeting. Brilliant young man. He now lives in Canada. He told me that the State was too powerful and intrusive, and that unchecked control by the few would result in much hardship for Alaskans. The young man was right.

    • Perhaps a bit unfair to criticize someone for having an Alaska father walk the picket line. Unions members during strikes are not noted for cerebral behavior. And ostracization by the union of non-complying members is frequently fierce. Alaska has the fourth highest percent of unionized workers of states in our union. Only the progressive bastions of Hawaii, New York and Washington have higher rates of unionization. That’s curse we must live with until Alaska becomes a right to work state.

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