Outside budget director earns most of new state employees, $195,000

In November, the state paid $4,280 for Donna Arduin Kauranen to move from her home in Petoskey, Mich. to Juneau, where she has taken up temporary residence as state budget director.

Arduin is making $195,000 a year, which puts her at the top of the salary list for the first wave of employees hired by Gov. Mike Dunleavy in December.

The administration has refused to include salary information with job announcements, forcing anyone who wants the details to submit freedom of information requests, a waste of time for all concerned as the information is not private.

The list of those hired in the first two weeks of December and their salaries was released in mid-January.

Arduin’s salary was set to more or less match what Pat Pitney, the former director of the budget office, was making.

The difference between Pitney and Arduin is that Pitney had a great deal of experience and knowledge about the Alaska budget process, while Arduin had no experience or knowledge of Alaska before she landed in Juneau. She hasn’t caught up yet.

I think she was hired because she has worked for a handful of Republican governors Outside and is known in national GOP circles for cutting budgets. The major fallout from the still-secret Dunleavy plans to reduce state services and raise local taxes will not land on her, however, but on her boss and the Legislature.

That she didn’t know the difference between a “dedicated” fund and a “designated” fund—only one of them is typically not allowed under the Alaska Constitution—and she was unable to answer basic budget questions by legislators the other day shows that she is out of her element in Alaska.

Plus, that she thought it was a good idea to propose cutting school spending for the current year, with budgets that are now past the halfway point of the fiscal year, without informing school districts, is more evidence of a serious disconnect. She doesn’t have the legal authority to declare that the money can’t be spent, as it has already been appropriated.

Finally, a month before she arrived in Alaska, Dunleavy had promised to increase education spending in rural Alaska, not cut it.

All we have so far is a dumb budget slogan, “Doing less with less.” The “less” part doesn’t apply to the salaries of top Dunleavy administration officials.

According to her public official financial disclosure form, Arduin earned $50,000 to $100,000 working part-time at her own consulting company in 2017, the most recent year available.

The website for her company was active when she arrived in Alaska, though it had not been updated in a long time. Most of the links didn’t work and those that did were posted years ago. The website for Arduin, Laffer & Moore seems to now have been shut down, but it is available through the Internet Archive.

Her company boasted that it had “some of the most highly respected minds on the planet.”

The next highest paid of the new state hires is Tuckerman Babcock, chief of staff for Dunleavy. He is earning $160,000 a year in his new job, a wage also set to match his predecessor.

Babcock’s financial disclosure form shows that in 2017 he received between $10,000 and $20,000 in pension income as a retired state government employee. His wife reported an income of between $500,000 and $1 million as a State Farm Insurance Agent in Kenai.

The state hired two people as deputies to the Babcock, Jeremy Price and Amy Demboski, both making $125,000 a year.

Price was making between $100,000 and $200,000 a year in 2017 as state director of Americans for Prosperity, according to his disclosure statement. Demboski, a former Anchorage assembly member, made from $20,000 to $50,000 as a radio talk show host, while her husband earned from $100,000 to $200,000 as a fire captain in Anchorage.

Former Sen. Ben Stevens, economist Ed King and former Dunleavy campaign advisor John Moller, John Crowther and Laura Cramer are among those making $150,000 a year.

By law, the governor earns $145,000 a year, while commissioners make $141,156 and the lieutenant governor makes $115,000.

Meanwhile, the state has just released the annual report on executive compensation and travel expenses.

In what may be a record, Keith Meyer, the former head of the state gas line agency, spent $121,068 to talk up the legendary natural gas pipeline during 2018.

His salary was $842,033 and he had $1,200 in “other” expenses. Meyer, fired by the Dunleavy administration, is probably the all-time state compensation king for his 2018 paycheck.

If there is one lesson to be drawn from this annual salary report, it is that inconsistency is paramount in Alaska and there is a desperate need to bring order to chaos. The long-time political fear of dealing with salaries in the open, which has been obvious for decades with legislators and governors, has led to disorderly conduct.

The people who lead state corporations, as well as leaders of the University of Alaska and the court system are typically paid much more than commissioners. Some of this makes sense, but a lot does not.

Commissioners are in the political spotlight, so their pay is held down by elected officials, who are also never out of the spotlight and are paranoid. Commissioners make about $4,000 less than the governor.

In some cases the leaders of state corporations have much less responsibility than commissioners and all of them have less responsibility than the governor, but they are not in the spotlight.

They are often paid more because the boards that set their salaries are not subject to the same public scrutiny as elected state officials, who are wary of losing elections. This has led to a system in which there are deputy commissioners who make more than their bosses and advisors to the governor who make more than commissioners.

This is a problem for Alaska if the state wants to attract commissioners who know what they are doing. In some cases the state is probably paying too much for those out of the spotlight whose salaries are not publicized or debated in public, while in other cases the salaries are justified.

A high salary does not guarantee competence in any endeavor, but a low salary increases the chance that the job will go to an incompetent.

The Legislature and the governor should find the political courage to replace the haphazard jumble with a coherent approach.