The greatest resource of any state is not its oil, gas or minerals, nor a particular crop and not tourism or any industry of any sort. It’s greatest resource is its people, and if you don’t believe that about your own state then you probably don’t think very much of your state, and you’re certainly not an optimal choice to be your state’s governor.
Yet on Monday, Alaska Governor Mike Dunleavy continued his barnstorming tour of austerity and inevitable depopulation into the big, upstairs room of the Dena’ina Center to speak to a near capacity crowd, guests of the Anchorage Chamber of Commerce for its regular Make It Monday event.
The governor did have some new information to add to his standard Powerpoint presentation, the details of which were somewhat newsworthy, but only further illustrate that Dunleavy does not seem to believe the people of Alaska are Alaska’s greatest resource.
Dunleavy told the crowd he believed he was the only governor at a major oil and gas conference in Houston, Texas last week, and naturally, industry folk there took great interest in him.
“I wanted to see what, really, their view was of Alaska,” he said. “They don’t view Alaska so much as a state, but more as an oil play.”
Dunleavy said that Alaska, despite its obvious difficulties producing oil with the ease of the Permian Basin in Texas or the Bakken in North Dakota, has a number of advantages — namely plenty of available pipeline capacity and unfettered access to the Pacific Ocean and Asian markets. This encouragement gave him reason to hope that one day there will be a fourth oil boom coming to Alaska, which, apparently is the only type of revenue source or economic development plan he sees as worth entertaining.
So in the meanwhile that projects in ANWR, Pebble Mine, the Donlin Gold Mine and a number of other speculative oil plays build their infrastructure and clear endless litigation hurdles, he sees it as his job to cut the state budget right to the bedrock, so when that ship comes in, we won’t fuck it up again with excessive spending, like the state did in the 1980s and 2000s, according to Dunleavy’s historical charts.
You name the government program, and rest assured, Dunleavy wants to cut it. Everything from the university system to the ferry system and even primarily federally funded programs like Medicaid, is on the chopping block, even as the PFD — the biggest government giveaway of any state in the union — remains a fiercely protected sacred cow.
At the end of his speech, Dunleavy took written questions from the audience. These questions were considerably more challenging than the softballs lofted at him at his Americans for Prosperity road show three weeks ago at 49th State Brewing Co. One question asked whether he was concerned about his budget killing so many jobs it will actually depopulate the state, to which Dunleavy replied, “People have been leaving Alaska the last several years anyway.”
He went on to argue that his austerity model is based on the assumption that gaining revenue through taxation would have the same depopulating effect because, he said, if you tried to bridge the state’s $1.6 billion budget gap through taxation, that would be an average cost of $5,300 per year to each taxpayer.
There’s so many things wrong with this line of thinking, I don’t even know where to begin.
First of all, can you imagine the governor of any state considering it a good, necessary or even remotely acceptable thing to lose population? Of course not. Any governor who made such a point would be immediately recalled on grounds of basic competence.
If the state of Alaska loses, say 10 percent of its population because Dunleavy’s policies turn it into a second-class shithole without even basic public services like quality law enforcement, infrastructure and schools, the first thing to plummet will be the real estate market because, obviously, supply will far outweigh demand. You need look no further than the Great Recession of 2009 in the Lower 48 to see what happens next when real estate values tumble dramatically.
Dunleavy and his ilk believe that taxes, be they of the income or sales variety, are essentially the government stealing from the people. While excessive taxation can be a damper on growth, this fundamentalistic approach is a really myopic and stupid way to view the role of taxes.
The truth is, taxation enhances the value of the citizenry.
Many have argued that Alaska’s embarassingly low voting numbers would be strengthened by a tax — any tax — in one form or another, because Alaskans then would have some ‘skin in the game.’ But more that, a tax would enhance the value of individual because it says to the people whose salaries are paid by those taxes that their work in making Alaska a better place to live is valued.
Taxes also enhance the value of the people because it makes them customers, essentially, of the state. The reason no other governor in his right mind would say publicly that it’s fine to lose population is that doing so would be to lose steady, paying customers.
As an analogy, take the Anchorage Daily News coming out of bankruptcy a year ago. New ownership knew the expense vs. revenue lines were way out of whack and significant cuts, especially cuts to the labor force were necessary. They also knew that would, to some degree, reduce the overall quality of the product. But I can’t imagine the Binkleys sitting around and saying, ‘You know what we really need to lose? Customers. We can’t afford to have too many people reading our paper.’
The bulk of Dunleavy’s stump speech is spent crying over spilled milk, using line graphs to show how each time an oil boom came along, so, too, did a spending boom and if we hadn’t behaved that way 30, 20 and 10 years ago, we’d have another $29 billion in the Permanent Fund.
The governor’s logic assumes that most every dollar spent by the state in that time was ‘wasted.’ Nevermind that most of it went to building infrastructure and paying salaries to all sorts of not just government workers, who spend most of that salary at local businesses, but also private sector workers whose toil helped build Alaska into a civilized place people actually want to live in; a place that has nice things like the Dena’ina Center.
Of course, Dunleavy isn’t wrong about the disturbing incongruity between the expense and revenue lines, and some belt-tightening is necessary. However, the way out of the problem is not an expense-only, slash-and-burn, panicked push of the austerity button, which Dunleavy all but admits he’s doing when he says he wants to deliver this final solution in his first year in office. The way out is a well tempered plan with a combination of expense cuts, revenue generation beyond crossing your fingers and hoping oil booms again, as well as sensible use of the $65 billion Permanent Fund.
Show the banks a measured, sensible plan that forecasts beyond the first term of your administration and the state’s good credit rating will be protected, allowing you to soften the blow of the transition by taking on new, manageable debts.
This gets to what might be the worst part of the governor’s proposed budget — he won’t even own it. Met with stinging criticism from even most Republican leaders, Dunleavy pivots to a position where he abdicates all responsibility, saying it’s not really a budget, just a conversation starter.
I might liken this to taking a shit in the middle of the room and declaring it merely an avant garde art installation.
No, Governor, that steaming dookie you pitched in the middle of the room we all share back on Feb. 13 is YOUR BUDGET. Government agencies, private businesses and Alaska families are already adjusting to it accordingly.
“Some people think (my budget) is the machinations of a madman — some crazy guy,” Dunleavy told the crowd.
No, our Governor is not a madman, but he shows all the characteristics of a bully, delighting in taking the lunch money of the most vulnerable Alaskans, Alaskans who are more valuable than oil and infinitely more valuable than blind adherence to Koch Brothers dogma.