Cole

Dermot Cole





The Anchorage Daily News published a piece the other day under the bold headline, “Reduce state spending to solve Alaska’s budget crisis.”

The column by Ben Wilterdink, director of programs at the Archbridge Institute, offered nothing in the way of a workable solution for Alaska’s budget crisis.

Wilterdink, described as a “visiting fellow” at the right-wing Alaska Policy Forum, wrote in the third sentence that “taxes on the oil industry account for more than 80 percent of Alaska’s government revenue,” a claim that hasn’t been close to correct for many years.

The visiting fellow, who is also listed as a “research fellow” at the Independent Institute, may not know the first thing about the recent history of Alaska’s budget dilemma, but he feels confident enough to offer the no-thought fiscal cure—”Cut the budget”—the kind of free advice that is worth what it costs.

Missing from fellow Wilterdink’s budget plan was any mention of what to cut from the budget or any analysis of what the impact would be. Or the potential tradeoffs and the need to balance public services and taxes.

The last refuge of every scoundrel in the right-size government club is the safe and easy budget pronouncement to “cut the budget,” while never bothering with the specifics. Every fellow, visiting or otherwise, knows that budget specifics are all that matter.

Had Wilterdink proposed cutting all state funding for schools and the University of Alaska, readers would see the scale of the con job inherent in his reflex remark that budget cuts will solve Alaska’s fiscal crisis.

He praised this forgettable 2019 report from right-wing experts in Ohio who had all the answers for Alaska and the Dunleavy administration. As I said at the time, there was Buckeye Boilerplate in the Alaska report. Much of what it said was included in an earlier report by the same authors, “Sustaining Economic Growth: Tax and Budget Principles for Ohio.”

I’d like to see the list of Alaska budget cuts Wilterdink and the Alaska Policy Forum support. If they want to cut education by $500 million or $750 million, what would that look like? And if they would like to cut a similar amount from Medicaid for the poor and other health programs, what would that look like?

Cuts of the magnitude needed to solve Alaska’s budget crisis would destroy public education and cripple health care systems, endangering the lives of poor people across the state. The big money in state spending is in those two areas and they would be the major spots to cut. You’d also have to get rid of the ferry system, confiscate oil and fish taxes from local governments and stop paying for school bonds.

An analysis of the impact of giant additional budget cuts doesn’t exist because implementing reductions of that magnitude would negatively impact tens of thousands of people directly and hundreds of thousands in all.

It would mean a real decrease in the quality of life in Alaska and damage the economy.

Alaska news organizations fail to lift the budget debate from the fantasies that are prevalent in state campaigns when they allow nonsense about unidentified budget cuts to be published and remain unchallenged. It encourages people running for office to try to get away with doing the same.

I think the state needs a combination of new and higher taxes, including but not limited to oil taxes. In the short term, the state needs to freeze spending—which means cuts in services to offset built-in increases. Expect lower dividends and greater withdrawals from Permanent Fund earnings to pay for services. A temporary increase in withdrawals from the fund is unwise, but it may be necessary, depending upon how dire circumstances get in the next year or two.

Candidates who promise higher dividends, no taxes and plenty of unidentified budget cuts are either lying or uninformed.

The Dunleavy 2018 campaign was based entirely on a fiscal fantasy that drew little scrutiny from Alaska news organizations. The only thing to prevent a repeat in many legislative campaigns this year is for the public, the press, civic groups and others to demand a discussion based on the difficult reality of Alaska’s finances.

Demand specifics. And speak up when someone peddles empty talking points as a miracle cure.

Dermot Cole can be reached at dermotmcole@gmail.com

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