Dunleavy's ‘lockbox strategy,’ keeping future budget cuts secret to neutralize opposition

The special session that begins Monday in Juneau is not just about Gov. Mike Dunleavy’s re-election campaign plan for inflated Permanent Fund dividends and a $1 billion deficit.

It’s about the Dunleavy lockbox theory of state government, which means keeping his ideas about cutting state programs secret until after a state spending limit is enacted.

It’s dishonest to the core, an attempt to hide the truth that decisions on the dividend require tradeoffs that Alaskans don’t want and don’t expect.

Dunleavy wants mandates in the Alaska Constitution to require inflated dividends and cap state spending.

But he doesn’t want to reveal what taxes would be needed to pay for the giant dividends. Or what services would be reduced or eliminated by cutting state spending.

He has no fiscal plan, just a handful of unexamined empty phrases.

Dunleavy’s vision for state government still remains the one he floated in 2016 as a member of the Alaska Senate, claiming he could pay inflated dividends by balancing the budget with secret budget cuts that he would never identify.

The one time Dunleavy abandoned his budget secrecy was his so-called “Honest Budget” in 2019, which would have wiped out the deficit by slashing state services and taking a half-billion from local governments.

In the four months that followed, Dunleavy did not listen to the public or the Legislature on the budget, but repeatedly aired his grievances about schools, ferries, Medicaid, the university and his desire to avoid taxes and pay more in dividends.

The recall movement grew quickly across the state and Dunleavy retreated on nearly every item, except for his attacks on the ferry system and the University of Alaska.

Since then Dunleavy has fallen back on the Dishonest Budget, with a state spending limit as a cornerstone, one that would be enacted without telling anyone of the tradeoffs required.

Alaskans would learn about the tradeoffs as soon as the limit is in the Constitution, under the Dunleavy plan. The lockbox, he called it. All cuts would be decided afterwards.

“It’s a lockbox and then you kind of duke it out, if you need to, what’s inside that lockbox. In my opinion, that’s pretty much what’s killed, I think, any sustainable plan from being put together,’ he said in a 2016 interview with Brad Keithley.

”We’ve defaulted first to what it is we’re going to cut, as opposed to what the size of this government should be. This puts us in the lockbox.”

Listen to Dunleavy’s explanation at about the 26-minute mark of the first recording.

Four-and-a-half years ago, he said he wanted a five-year plan to cut $1.1 billion.

He never mentioned specifics, such as cutting 10,000 state and local government jobs or eliminating most state agencies. He just talked about cutting government, paying dividends, avoiding taxes and using the lockbox to neutralize constituents who support programs.

“As you go to reduce programs you have constituent groups attached to them. And that should be a warning for all of us and really all governments going forward. When you grow your government, you grow constituent groups,” he said.

Once the spending limit is in place, constituent groups would have less ability to influence legislators and governors, according to Dunleavy. If officials couldn’t agree on specific cuts, every state service would be cut by a fixed percentage to get to $1.1 billion.

“There’ll be no more, you know ‘this is not what the people of Alaska want,’’ Dunleavy said.

“You send an appropriation limit out to the people of Alaska. They vote yes on it, there is no mistake. It is clear as day that that’s what they want. And so there’s no more arguing over what they want. They want it reduced,” he said.

Such is the Dunleavy lockbox, also known as a pig in a poke.

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