Gov. Mike Dunleavy launched his statewide roadshow on Monday with a presentation and panel discussion at the Cannery Lodge in Kenai.
Dunleavy and several members of his administration, including Chief of Staff Jeremy Price, Office of Management and Budget Director Donna Arduin, Attorney General Kevin Clarkson and Revenue Commissioner Bruce Tangeman, are traveling around the state as part of a statewide discussion on the state’s fiscal issues.
The roadshow is funded in part by Americans for Prosperity, a conservative political advocacy group funded by the Koch brothers.
“What we want to do is have an honest conversation about how we got here and what the path forward is,” Price said in his introduction to the governor. During the presentation, Dunleavy and his staff gave an explanation of Alaska’s current fiscal situation, defended the reasoning behind his budget proposal, and laid out several constitutional amendments being pushed by the administration.
Dunleavy started by attributing the current $1.6 billion dollar deficit to the beginning of former Gov. Bill Walker’s administration when oil prices dropped to about $26 per barrel.
“We’ve been trying to figure out ever since how to deal with it. Under the previous administration, their approach was to use part of the Permanent Fund and also try taxes,” Dunleavy said.
Oil prices and production have not rebounded the way that lawmakers expected, said Dunleavy, and as a result the deficit issue remained unsolved year to year. Dunleavy said that because oil revenues are not expected to reach levels that can sustain Alaska’s budget as they have in the past, he opted to cut spending by $1.6 billion so that it matched the current revenue stream.
The cuts translate to a major reduction in funding for almost every public sector, and the drastic size of these cuts have spurred community input from all over the state.
Beyond just cutting spending, Dunleavy wants to pass several constitutional amendments in order to prevent a similar budget crisis from happening in the future.
The first amendment proposed would put a cap on the amount that the state can spend each year, with that cap rising at about 2.5 percent each year adjusted for population and inflation change. If revenue exceeds that spending cap in a given year, the excess would be put into savings. It also allows exceptions to the spending cap for the PFD and disaster spending.
The second amendment proposed would require a vote by the general population to approve any new tax proposed by the Legislature. It would also require any tax passed through an initiative by the people to be approved by the Legislature.
The third amendment proposed would “constitutionally enshrine the PFD,” according to Dunleavy’s presentation. This amendment would no longer require the PFD to be appropriated by the Legislature, but rather taken out automatically each year from the Alaska Permanent Fund. It also would make vetoing the PFD impossible, and require any change of the PFD to be approved by the voters. All three of these amendments will require a two-thirds vote by both chambers of the Legislature followed by a majority vote by the citizens of Alaska before they are ratified.
Dunleavy’s presentation was followed by a question-and-answer panel. In between the presentation and the panel, attendees were asked to fill out question cards that were distributed by Americans for Prosperity. A representative from Americans for Prosperity then fielded some of these questions to the panel, which consisted of Dunleavy, his team, the regional director for Americans for Prosperity and the director of operations for the Alaska Policy Forum.
The questions ranged from asking the governor why he has introduced such drastic cuts, to asking OMB director Arduin if she had specific ways that Alaskan educators can improve the outcome for students with a significantly reduced budget. Dunleavy maintained that cuts of that magnitude and a permanent reduction in spending is necessary to stabilize Alaska’s economy and to draw potential investors to the state.
Arduin did not have specific ideas to offer, but did say that the administration will be rolling out several initiatives in the coming weeks focusing on improving education outcomes through technology. Arduin and the rest of Dunleavy’s team also said throughout the event that an increase in education spending has not resulted in better outcomes for students, which is part of the reason they have decided to reduce the budget for public education.
During the panel the director’s of Americans for Prosperity and the Alaska Policy Forum were also given opportunities to speak and give their perspectives on the budget.
While the room was filled mostly with supporters of Dunleavy and his decisions, the “Make Alaska Great Again” hats inside were contrasted by protest signs outside criticizing potential cuts to education and other social services.
As attendees pulled up to the gates of the Cannery Lodge, roughly 50 protesters were there with signs and chants. Many of the signs were advocating for education funding, while others were criticizing the event’s sponsorship.
One protester, Susanna Larock, said she came to the event to fight for her son’s school in Moose Pass, which could be closed or consolidated if Dunleavy’s proposed budget passes.
“I’m here to fight for my son’s school,” Larock said. “It’s a wonderful school. He thrives there and I want him to keep thriving there.”
Laura Johnson said she also came out to support funding for education.
“We need to look for other sources of revenue and not cut schools,” Johnson said. “I would give up my PFD. Put an income tax or a sales tax; let’s not cut the schools.”
Protestors like David Coray were frustrated that the governor’s event wasn’t fully open to the public.
“The secretive nature of how this whole set up was being organized and conducted — that it wasn’t really a fair public hearing — that is one of the main reasons for why I’m here,” Coray said.
Protester David Anthons said he wanted the event to have a better, more democratic process.
“This is sponsored by Americans for Prosperity and the Koch Brothers,” Anthons said. “It’s not an Alaskan group. You know, they destroyed schools and destroyed jobs in Kansas where I’m from. I’m pretty familiar with it. I just want to see democracy and this is not a democratic process.”