Dunleavy plan to increase dividends by $1.4 billion would create $1 billion deficit

The budget chart below from the Dunleavy administration presents a deceptive image of state spending.

It leaves out the most expensive program in the state, the Permanent Fund Dividend, which would cost $2.4 billion in state funds under the Dunleavy plan.

These numbers are buried within the Dunleavy budget documents, while they should be clearly explained and understood.

The Dunleavy proposal would increase dividend spending—$882 million this year—by $1.4 billion, the biggest factor in creating the proposed $1 billion Dunleavy deficit.

Dunleavy has refused to propose taxes, reductions in services or changes in the dividend formula in state law, ignoring his responsibility as governor to balance the budget.

He has used this tactic since he abandoned his so-called “Honest Budget” in 2019 and began running from the recall.

Dunleavy wants to be able to blame the Legislature for proposing taxes, cutting services, cutting dividends or doing nothing, when it’s really the product of an inert executive.

He always acts like an innocent bystander at the scene of a endlessly repeating political brawl, not the occupant of the most powerful post in state government.

The Dunleavy deficit would be filled by reducing the Constitutional Budget Reserve from $2.7 billion to $1.7 billion. The Legislature, though it is closely divided, will not be as reckless as Dunleavy. The Dunleavy deficit is not sustainable.

Medicaid, which is health care for low-income people, is budgeted at $2.5 billion, with most of that funded by the federal government. The state share would be about $700 million.

Excluding federal funds, the dividend is the biggest state expense, more than $1 billion above the amount of state funds budgeted for K-12 education.

By excluding the plan to spend $2.4 billion in state funds on dividends from its portrayal of the budget, the Dunleavy administration is giving Alaskans a grossly distorted picture of state finances. The dividend is the biggest expense in state government, surpassing state funding for K-12 schools by more than $1 billion.

Here is a link to the state website, where you find the interactive graphic. “You can click on a department/category, or select from the drop-down menu in the upper left corner to see a more detailed breakdown.”

But again the graphic is deceptive and delusional because $2.4 billion is missing. The Office of Management & Budget makes it difficult for anyone to navigate through its budget documents and find the real picture.

Dunleavy will say the dividend is not state spending because it goes to the people. This is the story you tell yourself to avoid calling it a handout. The 1976 amendment that created the Permanent Fund did not create the dividend, the government program created later by the Legislature.

A check drawn on the state treasury for public funds is state spending, contrary to the claims that it is a birthright, an entitlement or a just reward, even available to those who haven’t been here long enough to wear out a set of snow tires.

HAVEN’T READ IT: Sen. Dan Sullivan used his patented “I haven’t read it” dodge to say as little as possible about the Colorado Supreme court Trump ruling. Politico wrote: “Sen. Dan Sullivan (R-Alaska), meanwhile, told reporters that he hadn’t read the ruling. ‘But my gut instinct is, you got to let the people of the country decide.’” Sullivan had nothing to say to the Anchorage Daily News.

SUIT HAPPY: Attorney General Tregarrick Taylor was swift to add his signature to another lawsuit with 20 fellow GOP generals opposing the Biden administration, this one opposing federal attempts to limit carbon emissions from transportation. Alaskans should have some say on what is done in our name by the suit-happy attorney general, but they don’t even have a chance to make public comments.

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