Dunleavy needs more than 'hand out cash as fast as possible' as a recovery plan

Alaska is facing an economic and health emergency, unlike anything we’ve ever seen.

We need a plan from Gov. Mike Dunleavy that recognizes that some people are getting hit much harder than others, that resources are limited and the state needs to target what it does for maximum benefit. We need a fiscal plan.

But we’re not getting that multi-faceted analysis from Dunleavy, who wants to talk about nothing but handing out cash, pretending that an unsustainable draw from the Permanent Fund should be an easy decision for Alaskans.

It’s not. There is no waiting bonanza to replace the Permanent Fund and it must be used with caution.

“We need to get cash in the hands of people as quickly as possible and businesses as possible,” Dunleavy said.

Let’s not ignore the federal plan to get cash in the hands of the people as quickly as possible. Expanded unemployment benefits have been approved along with a wide range of other financial measures in the biggest spending bill ever passed by Congress.

“Let’s not get hung up on the PFD, let’s not get hung up on a distribution of cash. Let’s just realize that the government shut down the economy and we need to get cash into the hands of people so they can pay their bills, buy products and partake in services or we’re going to lose a significant amount of our economy potentially, if this continues the way it’s going,” he told Joe Vigil of KTVA in Anchorage.

“The consequences of not getting cash in the hands of people and businesses right now may in the end be more devastating to Alaska than spending a little more out of the earnings reserve,” he said.

Yes, a lot of people and businesses are hurting. But it is irresponsible to suggest that spending $2.3 billion more than the Legislature approved in dividends—with money distributed both now and more in the fall—is a “little more.” About $350 million of that $2.3 billion would go right to the federal government in income taxes.

That $2.3 billion has the power to earn hundreds of millions more a year in perpetuity, a benefit of enormous value. If Alaska is to have any future at all, the Permanent Fund cannot be squandered.

Former Gov. Sean Parnell and former Sen. Mark Begich, leading the Dunleavy economic stabilization team, are also calling for lots of cash payments to Alaskans. Like Dunleavy, they have not said what this would mean for life in Alaska a year from now or 10 years from now. They should do so.

The compromise dividend plan approved by a bipartisan group of Republicans and Democrats calls for distributing about $700 million in Permanent Fund Dividends this fall, $1,000 per person. The state really can’t afford that $700 million, but the emergency requires this and perhaps more unsustainable spending.

The budget approved by the Legislature would all but drain the Constitutional Budget Reserve in the next fiscal year. All that will be left is the Permanent Fund. There is likely to be a deficit next year, requiring an unsustainable draw on the fund’s earnings, even with no dividend in 2021.

Dunleavy doesn’t want to talk about the future of K-12 schools, the University of Alaska, health care, road maintenance, villages and the ferry system. He doesn’t want to talk about taxes or the level of government services. He doesn’t want to talk about the relationship between spending more from the Permanent Fund now and what that means in the years ahead. He doesn’t want to talk about what the state can afford. He doesn’t want to talk about why his approach makes the elimination of the dividend more likely.

He doesn’t want to talk about a fiscal plan.

In the eight months since the recall campaign popped up, Dunleavy has not wanted to talk about any of the hard parts of the state budget. He has wanted to talk only about handing out cash.

A couple of days ago, the Fairbanks Daily News-Miner published a column by insurance man Dick Randolph, who said Dunleavy’s proposed budget a year was exactly what Alaska needed. Randolph said, “his wisdom appears to be almost prophetic.”

Randolph should have said “pathetic.”

Dunleavy promised a year ago to cut state and federal spending in the health department by $848 million, while taking $332 million from schools, gutting the University of Alaska, shutting down the Alaska Marine Highway System and confiscating hundreds of millions in oil and gas property taxes and fish taxes from local governments. He said the situation was dire and this was his “permanent fiscal plan.”

In his wisdom, Dunleavy has never abandoned his plan from a year ago, he just stopped talking about it because he fears the recall. Alaska news organizations have failed to make this point clear to Alaskans, who have been led to believe that Dunleavy changed his approach.

Dunleavy has vaguely suggested that in the future Alaskans have to decide “what size of government” they want. He made clear a year ago what size of government he wants. He hasn’t changed his mind. He’s waiting.

He says it’s up to the Legislature to counter.

”I’ve always been open for a discussion about how we get to where some folks want to go,” he told Vigil.

Dunleavy said the cuts in his budget a year ago were “panned pretty hard” by legislators, “So we said, fine, work together Legislature, talk amongst yourselves, come up with some ideas to solve some of these long-standing problems, here we are today.”

Talk amongst yourselves.

Vigil asked a few times why the governor can’t work things out with the Legislature on the dividend. That’s really the wrong question.

This is not just about the dividend, but also about the level of state services and the level of taxation. They are related, but Dunleavy insists on talking only about the dividend, which can’t be looked at in isolation.

“You keep saying ‘you guys.’ I’m together,” Dunleavy said.

“My branch of government is together. The Legislature, by design, the founding fathers designed it to defuse power and not necessarily get business done bang, bang, bang because the founding fathers—I’m giving a little deference here to the Legislature—the founding fathers designed this so that there would be a struggle and a discussion, to make sure that our freedoms and our wallet wasn’t taken by a branch of government that would act too harshly or too quickly.”

Regarding the size of cash payments to Alaskans, he said, “The issue is internal to the Legislature. I don’t own the Legislature. I have discussions with them. We submit bills. We sit down and have a conversation with them. But in the end they have to agree. What I’m saying now is hopefully they’re seeing what’s happening in Alaska.”

Members of the Legislature are seeing what is happening in Alaska and trying to balance competing demands in a crisis. The governor needs to do the same.