Gov. Mike Dunleavy wants to pay $2 billion in Alaska Permanent Fund Dividends to Alaskans this year, making dividends the biggest expense of state government by a large margin.

After dividends, K-12 education is next at $1.3 billion, closely followed by health and social services. Everything else is relatively small.

The big problem with Dunleavy in 2020 is that he wants to spend $1.5 billion more than the state is taking in and he won’t propose taxes, spending cuts, or any budget move of consequence. He won’t propose cuts to education, Medicaid or the dividend.

Leave the three giant formula programs in state government alone, while blocking taxes, and this leads right to a big drawdown from the Permanent Fund that will erode its ability to earn billions for the state. It’s the Dunleavy Disaster 2.0.

Dunleavy has yet to confess that his budget is irresponsible in that it would consume all state reserves except the Permanent Fund earnings reserve by October 2021.

The governor appeared on Talk of Alaska Tuesday on public radio. True to form, he ducked and deflected, calling for conversation, communication, discussion and dialogue.

The most noteworthy part of the interview was his laughable claim that he didn’t know that his own support group, Stand Tall With Mike, was going to announce plans to withdraw its court challenge to the recall and anonymously claim to be a victim of court corruption. Dunleavy claimed he had hearing “rumblings” of this a day or so before.

The budget picture is easy to understand and a solution demands immediate action, not a talkathon.

The Constitutional Budget Reserve is down to $2.2 billion and that money should not be spent, it should be saved for emergencies. But Dunleavy and many legislators are counting on spending much of the reserve for the fiscal year that starts July 1.

After that? No one knows because the governor is in the bunker, trying to escape the recall.

The only real budget question for Dunleavy, one that needs to be asked over and over, is this: What are you going to do about the annual $1.5 billion deficit that Alaska is facing now and in the years ahead?

After the vetoes and the reverse-the-vetoes fiascoes of 2019, he started an endless political stall — calling for conversations, meaningless advisory votes, gimmicks like the lottery and constitutional amendments that don’t belong on the ballot. Anything except the annual $1.5 billion challenge.

The recall election is coming sooner rather than later, the new fiscal year begins in four-and-a-half months, and there is no time for Dunleavy to dither.

It appears that he would love to see the Legislature take the blame for whatever is done to cut the dividend, raise taxes or cut services, while he tries to hold conversations away from the fray. I suspect that will add momentum to the recall.

The idea that he can escape political accountability by acting like a candidate—refusing to propose specific actions with real consequences—is destined to fail.

At some point his followers will see that his alleged allegiance to $2 billion in dividend spending is hollow.

His failure to do anything about the $1.5 billion annual deficits makes it far more probable that dividends will eventually be eliminated.

It would make sense to cut total dividend spending to $750 million or so, while bringing back the income tax and raising oil taxes. The tax changes would take time to implement, which adds to the crisis of leadership.

Dunleavy doesn’t want to talk about real solutions because that would require him to say that the fiscal fantasy he peddled during his campaign was complete nonsense.

A compromise that cuts the dividend and raises taxes would make it more likely that the Permanent Fund will grow in the years ahead and that the dividend will survive. A compromise would require leadership from the governor, as well as the Legislature.

The directionless meandering that Dunleavy is now giving Alaskans threatens the Alaska economy and the future of public services. It puts the survival of the Permanent Fund and the dividend at risk.

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