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.

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

The Alaska Capitol on Monday, Jan. 16, 2023, in Juneau, Alaska. (AP Photo/Becky Bohrer)
Alaska Voices: Legislature deserves credit

A special session shouldn’t have been necessary, but at least it was only one day instead of 30 days.

Alaska State Troopers logo.
Alaska Voices: Please be safe, courteous, and legal as you fish in Alaska this summer

As you head out to hit the water this year, here are a few tips to help you have a safe and citation free season

An observer makes an entry in the Fish Map App on Prince of Wales Island. (Photo by Lee House/courtesy Salmon State)
Alaska Voices: Document Alaska rivers with new fish map app

The app provides a way for everyday Alaskans to document rivers home to wild salmon, whitefish, eulachon and other ocean-going fish — and earn money doing it

(Peter Segall / Juneau Empire File)
Opinion: Sustainability report is a greenwashing effort

Report leaves out “the not-so-pretty.”

Pictured is an adult Chinook salmon swimming in Ship Creek, Anchorage. (Photo: U.S. Fish and Wildlife Service)
Voices of the Peninsula: Proactive measures key to king salmon recovery

I have been sport fishing king salmon along the eastern shores of Cook Inlet and in the Kenai River since 1977

U.S. Sen. Lisa Murkowski (Mark Sabbatini / Juneau Empire)
Honoring the fallen on Memorial Day

As we honor the men and women who fell in service to our nation, we must keep their memories alive through their stories

Shana Loshbaugh (Courtesy photo)
History conference seeking input from peninsula people

The Alaska Historical Society will hold its annual conference on the central peninsula this fall

Coach Dan Gensel (left) prepares to get his ear pierced to celebrate Soldotna High School’s first team-sport state championship on Friday, Febr. 12, 1993 in Soldotna, Alaska. Gensel, who led the Soldotna High School girls basketball team to victory, had promised his team earlier in the season that he would get his ear pierced if they won the state title. (Rusty Swan/Peninsula Clarion)
Remembering my friend, Dan Gensel

It’s a friendship that’s both fixed in time and eternal

(Clarise Larson / Juneau Empire File)
Opinion: The false gods in America’s gun culture

HB 61 is a solution in search of a problem.

KPBSD Superintendent Clayton Holland
Reflecting on a year of growth and resilience

A message from the superintendent

Jim Cockrell, commissioner of the Department of Public Safety. (Courtesy photo/Office of Gov. Mike Dunleavy)
Honoring the 69 peace officers who have died serving Alaskans

Alaska Peace Officer Memorial Day honors the brave men and women who have given their lives in the line of duty

Rep. Maxine Dibert (Image via Alaska State Legislature)
Opinion: The economic case for a significant investment in education

As our oil production and related revenue have declined, our investments in education have remained flat