Terrence Shanigan: Alaska’s budget bonanza, continued

By TERRENCE SHANIGAN

This article is the second installment in a two-part series.

Previously, we covered the origins of the budget crisis and touched on how it affects issues like education.

Terrence Shanigan: Alaska’s budget bonanza — taxes, PFD cuts, and the Great Juneau Jest

 In this installment, we’ll go over what it means for public safety, Medicaid, and the Permanent Fund Dividend.

Public Safety 

We’ll start this one with a look at the Department of Public Safety. 

Between 2005 and 2025, its budget jumped 62 percent, from $160 million to $260 million, yet Alaska’s crime rate leads the nation at 838.2 per 100,000 (FBI stats). Per the Alaska Beacon, trooper ranks are 17-20 percent unfilled, but this is not a new problem. A report in 2017 showed that AST/AWT carried an average of 77 vacant positions each year from 2006 to 2016. 

Are these vacancies a systemic problem or built into the budgeting equation? 

Corrections spending soared 85 percent, from $200 million to $370 million, but recidivism is glued down at 66.41 percent. It’s like buying a top-tier security system and opening the door. So, how are we measuring performance success for every dollar spent? It isn’t clear to Alaskans.  Carrying a high number of vacancies and then going to Juneau requesting more positions was questioned in the past, but was met with swift condemnation from officials. What other conclusion should Alaskans come to when spending is increasing faster than inflation, yet performance is dropping, and this trend continues over decades? 

In 2022, the Alaska Beacon reported, “Public safety positions, either with the Alaska State Troopers or the Department of Corrections, account for 11 of the top 25 highest paid positions and 28 of the top 50” highest paid state employees. Many law enforcement officers make upwards of $125,000. Several earn above $200,000. This is not a knock against our first responders. The work is challenging, shifts are long, and staffing challenges persist. Still, we must understand the drivers of the high costs of providing these essential services in our community and the pressures of identifying revenue sources to fund them. We need to find a more effective way to bring down crime rates and save more lives.

Medicaid Madness

Next, let’s wade into the Medicaid mess, a shell game with Alaska holding the short stick. 

Gov. Bill Walker’s 2015 expansion of Medicaid compromised Alaska’s healthcare system, with Uncle Sam only footing 90 percent of the bill and Alaska covering 10 percent, about $50 million a year, says the Alaska Department of Health. The total cost to Alaska since expansion is roughly $500 million, with approximately 25,000 Alaska Natives enrolled. Why is this a big deal? The Indian Health Service (IHS) is federally mandated to cover Alaska Native healthcare, but Medicaid expansion (Obamacare lite) found a way to get the State of Alaska to pay part of that tab. It’s like your rich uncle asking you to chip in for his yacht repairs. It’s his responsibility, not yours. Today, for any part of the 10 percent of the Medicaid expansion costs that the State of Alaska has assumed is a portion of this trust responsibility, the state should not be paying. Rather than fix the problem, the legislature proposes to take more of your PFD to pay for it or, better yet, tax you. Come on, Alaska, figure it out!

The kicker? Medicaid fraud and abuse could be siphoning off $100-$200 million annually in Alaska, fake claims, overbilling, or services never rendered. A 2023 audit flagged $80 million in questionable payments, yet follow-up has been slower than a glacier in July. Add in administrative bloat (10-15 percent of costs, per national averages), and you’ve got a program that’s less “safety net” and more “money pit.”  Yet you don’t hear cries from Juneau to fix these problems or calls to seek out waste or inefficiencies. They want a reason to grab your PFD; it’s a strong government economy they seek to build.

The PFD

Now here is where it gets personal: the Permanent Fund Dividend. This isn’t just a check; it’s your backstage pass to Alaska’s resource wealth, a tangible reminder that the oil, gas, and minerals under this frozen turf are owned by you, the citizen, in common. Back in 1982, the PFD was born to share that bounty, and in 1985, 87 percent of Alaskans voted “hands off” in an advisory referendum. Fast forward to today, and politicians are itching to claw it back, floating plans like a 75-25 split, 75 percent for government, 25 percent for you (currently 50/50). It’s like inviting you to a buffet at your house, and the guests hand you a cracker while they hog the prime rib. The decision to take more of the dividend should be made by a vote of the people. 

 Why the obsession with cutting the dividend? Simple: snatching your slice is easier than baking a smaller pie. The PFD checks pump $1-$2 billion into the private economy yearly, local shops, rent, and snow tires, but redirecting it to Juneau keeps their machine humming. Last year’s $1,700 PFD could’ve been $3,400 without the budget bloat. Don’t be gaslit; the spending is “unsustainable”; their spending is the real iceberg.

In 2016, Mission Critical, a United for Liberty project, pegged potential savings at $3 billion annually, enough for an extra $4,700 PFD for every Alaskan each year. Examples? Merge Alaska’s 54 school districts into 27 (saving $11 million), crack down on Medicaid fraud ($200 million), or axe redundant programs (another $500 million). Slash a few of the 2,900 vacant fully funded positions and save hundreds of millions. States like Texas and Florida have slashed budgets without gutting services. We can, too.

A Government-First Gospel: Juneau’s Big Top

So, what’s driving this push for taxes and more of your PFD? It’s a patronage party, and you’re not invited. Take the $1.5 billion in “nice-to-haves” Mission Critical flagged, think social grants, vacant positions, duplicate agencies, or bloated admin staff. Cutting those threatens the gravy train.

Then there’s the control angle. A government-first economy lets them steer everything: your healthcare, kids’ schools, and PFD. It’s like giving a micromanager a megaphone. In contrast, a private economy grows wealth, think oil rigs, fisheries, and startups, but Alaska’s political class treats it like a third-world backwater, scaring off investors with instability. Alaska is a state where 1 in 4 jobs depends on Juneau, not ingenuity. 

The good news for Alaskans is that we don’t need new taxes or PFD cuts. Start with audits, line-by-line, agency-by-agency. Prioritize constitutional must-haves (education, safety) and statutory duties (Medicaid), then make every “nice-to-have” fight for its life in public debates. Streamline: why 54 school districts for 130,000 kids? Why not bid out services competitively in some areas? And for Pete’s sake, stop letting Uncle Sam dump IHS costs on us. Using Mission Critical’s potential savings ideas is a roadmap. The fix is right there.

The choice is in the hands of Alaskans. Demand audits at every town hall. Tell your reps: no taxes, no cuts to the dividend, just cuts to the non-mission critical spending. The Permanent Fund is your generational link to Alaska’s wealth. Don’t let Juneau turn it into their short-lived piggy bank. One analyst quipped, “Alaska’s budget is a snowmachine stuck in the mud. More gas won’t help; you’ve got to get an ATV and the right equipment for the job.”  Will this legislative session be just another wash-rinse-repeat? Let’s hope not.

Terrence Shanigan: Alaska’s budget bonanza — taxes, PFD cuts, and the Great Juneau Jest

Terrence Shanigan is a lifelong Alaskan of Sugpiaq descent from Bristol Bay. He is also the co-founder of Mission Critical, is a combat veteran, an honored husband and a dedicated father.