teaser

Opinion: The state’s financial puzzle would be easier to solve without stretched numbers

Better to use all the puzzle pieces to build a more durable bridge.

By Larry Persily

Assembling a long-term fiscal plan for Alaska has been like putting together a jigsaw puzzle with key pieces missing from the box.

It’s frustrating and you can’t win, no matter how much you try pounding the pieces to fit together.

In this case, the puzzle would go together better with a governor who doesn’t stretch the numbers to suit his arguments, and who thinks more about public services that can build the state’s future and less about dividends that can build his reelection campaign.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

The puzzle also is missing a few other pieces, particularly more legislators who understand that the Alaska Permanent Fund dividend should not take precedence over all else in the state budget, and that it’s not OK to treat the savings account as an ATM that can pop out extra cash to pay a supersize PFD.

That’s not to say all of the other pieces fit perfectly, or that all the other puzzle masters are acting in unison. But at least they see the same picture on the cover of the jigsaw box and are turning over all the pieces, which include a state income or sales tax, oil taxes, responsible spending, an affordable PFD, other taxes — and making Alaska an attractive place to live. There is more to quality of life than living tax free.

Gov. Mike Dunleavy has declared that an income tax is off-limits for any fiscal plan he could support. While he is not alone in that position — many legislators and maybe a majority of Alaskans would agree — he is purposely vague on what revenue pieces we would support.

The best Dunleavy can manage on sticking out his reelection neck is for his second-in-command at the revenue department to tell legislators last week that the governor “likely” would accept a sales tax, so long as it comes with big dividends in the constitution and a spending limit, also in the constitution.

The governor is making the work even harder by not submitting a single substantial revenue measure for legislative consideration, leaving it to lawmakers to guess at which pieces he would endorse. He sits back even as he acknowledges the state needs new revenues.

Worse yet, the effort is made more difficult for legislators and the public by some misleading math — sadly, one of Dunleavy’s frequent tactics.

In a presentation to a state House committee last week, promoting the governor’s plan to withdraw an additional $3 billion from the permanent fund to tide over the state until something else comes to the rescue, the Department of Revenue said the fund holds $18.6 billion in available earnings.

Not even close. Purposefully misleading to bolster the argument that the fund can afford a large PFD this fall and next and next.

As of the most recent financial statement, the permanent fund had a little more than half that amount uncommitted as of July 31. If you take the total value of the fund’s earnings reserve account and subtract what already is allocated for next year, you are left with $9.7 billion.

The governor wants to take one-third of that as a “bridge” to help cover bigger dividends. That leaves an awfully short bridge to cover a wide gap between spending and revenues in the years ahead.

Better to use all the puzzle pieces to build a more durable bridge.

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal service in oil and gas, taxes and fiscal policy work. He is currently owner and editor of the weekly Wrangell Sentinel newspaper.

More in Opinion

Gov. Mike Dunleavy, a Republican, speaks during a news conference in April 2023. (Clarise Larson / Juneau Empire File)
Opinion: Anti-everything governor

Nothing wrong with being an obstinate contrarian, unless you would rather learn, build consensus, truly govern and get something done.

U.S. Senator Dan Sullivan, R-Alaska, speaks to Anchor Point residents during a community meeting held at the Virl “Pa” Haga VFW Post 10221 on Friday, May 30, 2025, in Anchor Point, Alaska. (Delcenia Cosman/Homer News)
Opinion: Big beautiful wins for Alaska in the Big Beautiful Bill

The legislation contains numerous provisions to unleash Alaska’s extraordinary resource economy.

Children are photographed outside their now shuttered school, Pearl Creek Elementary, in August 2024 in Fairbanks, Alaska. (Photo provided by Morgan Dulian)
My Turn: Reform doesn’t start with cuts

Legislators must hold the line for Alaska’s students

Deena Bishop, commissioner of the Department of Education and Early Development, discusses the status of school districts’ finances during a press conference with Gov. Mike Dunleavy at the Alaska State Capitol on Thursday, April 17, 2025. (Jasz Garrett / Juneau Empire)
Opinion: The fight to improve public education has just begun

We owe our children more than what the system is currently offering

President Donald Trump and President Vladimir Putin of Russia at a joint news conference in Helsinki, Finland, July 16, 2018. (Doug Mills/The New York Times file photo)
Opinion: Mistaking flattery for respect

Flattery played a role in Trump’s One Big Beautiful Bill.

(Juneau Empire file photo)
Opinion: Life is harder when you outlive your support group

Long-time friends are more important than ever to help us cope, to remind us we are not alone and that others feel the same way.

Deven Mitchell is the executive director and chief executive officer of the Alaska Permanent Fund Corp. (Photo courtesy of the Alaska Permanent Fund Corp.)
Opinion: The key to a stronger fund: Diversification

Diversification is a means of stabilizing returns and mitigating risk.

A silver salmon is weighed at Three Bears in Kenai, Alaska. Evelyn McCoy, customer service PIC at Three Bears, looks on. (Photo by Jeff Helminiak/Peninsula Clarion)
Opinion: Will coho salmon be the next to disappear in the Kenai River?

Did we not learn anything from the disappearance of the kings from the Kenai River?

Jonathan Flora is a lifelong commercial fisherman and dockworker from Homer, Alaska.
Point of View: Not fishing for favors — Alaskans need basic health care access

We ask our elected officials to oppose this bill that puts our health and livelihoods in danger.

Alex Koplin. (courtesy photo)
Opinion: Public schools do much more than just teach the three Rs

Isn’t it worth spending the money to provide a quality education for each student that enters our schools?

Gov. Mike Dunleavy speaks to reporters at the Alaska State Capitol on Thursday, April 17, 2025. (Jasz Garrett / Juneau Empire file photo)
Letter to the Editor: Law enforcement officers helped ensure smooth, secure energy conference

Their visible commitment to public safety allowed attendees to focus fully on collaboration, learning, and the important conversations shaping our path forward.

Laurie Craig / Juneau Empire file photo
The present-day KTOO public broadcasting building, built in 1959 for the U.S. Army’s Alaska Communications System Signal Corps, is located on filled tidelands near Juneau’s subport. Today vehicles on Egan Drive pass by the concrete structure with satellite dishes on the roof that receive signals from NPR, PBS and other sources.
My Turn: Stand for the community radio, not culture war optics

Alaskans are different and we pride ourselves on that. If my vehicle… Continue reading

You're browsing in private mode.
Please sign in or subscribe to continue reading articles in this mode.

Peninsula Clarion relies on subscription revenue to provide local content for our readers.

Subscribe

Already a subscriber? Please sign in