Dunleavy's 10-year budget forecast calls for $7 billion in imaginary revenue over a decade

Carbon sequestration holds potential as an income source for Alaska. Gov. Mike Dunleavy is right about that.

(The best update on the issue is this piece from reporter Nat Herz, who writes the newsletter Northern Journal.)

But Dunleavy keeps overselling this as a miracle money machine that will cost the state nothing to get going and will generate enormous returns in short order—$7 billion in a decade.

All gain. No pain. Free money. A solution to the state’s fiscal plan that will fill Alaskans with joy. Manna from heaven—supplied by investors from Outside who believe in the science of climate change, which Dunleavy doesn’t.

“The reason we landed on this is it doesn’t gore any ox,” Dunleavy said at a December press conference.

Speaking of ungored oxen, his 10-year budget forecast says the state will collect $300 million in new revenue starting next July, tripling in three years to $900 million a year.

The 10-year budget forecast does not identify the source of any of that “new” money.

But the Dunleavy budget office told a reporter from the Alaska Beacon last month that the new revenue is what the state would collect from the carbon capture and sequestration business.

The $300 million target for next summer appears to be imaginary, fabricated to hide a growing deficit. The annual imaginary new revenue would reach $500 million in FY 2025, $750 million in FY 2026, and $900 million every year starting in FY 2027.

These are invented numbers, a total of more than $7 billion in imaginary money over the next decade.

Dunleavy needs to admit that the $7 billion claim is a fraud. Or that it relies on new taxes that he wants to try to blame on the Legislature because he won’t attach his name to new taxes—only to the bogus notion that someone who is not governor will come up with $7 billion between now and 2033.

Without the $7 billion in imaginary money, the Dunleavy fantasy that the state can afford to spend $2.5 billion to $3.2 billion a year on dividends over the next decade falls apart.

Asked at a press conference Thursday how much of the new revenue in his 10-year forecast would come from carbon sequestration, Dunleavy ducked. He refused to answer the question or confirm the comment by his budget office that the $7 billion is supposed to come from capturing and storing carbon over the next decade.

Dunleavy said this:

“We want to act quickly on this form of revenue, this potential money-maker for the state of Alaska. But we also understand at the same time that the Legislature is going to be engaged and we’ll engage with them in potential other new revenues as well.”

“Over the last several years the question seems to always come to me what am I going to suggest for revenues, what I am going to suggest to bring income to Alaska. Well, this is another one of my suggestions and it has incredible potential so this administration right now is focused on this particular issue to try and get it past the finish line.”

He said legislators are free to offer their own ideas about new revenue sources and they should be thinking about “what are some other methods to bring wealth into the state of Alaska.”

“I’ve always been somewhat hesitant to just look at what I call old, traditional, sometimes tired approaches and that is, taking a dollar out of your pocket Jeff (Landfield), to give it to the guy next to you. This creates new wealth and it creates wealth that comes in from the Outside, which I think is exactly what we want for the monetization of carbon with our resources. And so it’s consistent with what I think Alaskans want.”

They want free money from Outside. They don’t want taxes. They want someone to create wealth.

“With regards to other forms of revenue, again, nothing’s preventing the Legislature from coming up with some great ideas as well,” Dunleavy said.

This leaves us with the $7 billion question and the 10-year fantasy from Dunleavy, featured in a fraudulent document that should be withdrawn by the governor and corrected.

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The Dunleavy administration claims that the 10-year forecast for “new revenue” is what it expects to collect from the carbon capture business. There is no reason to believe that these imaginary numbers are real, $300 million next fiscal year, rising to $900 million a year by FY 2027.