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News-Miner Editorial

We need a statesman: Governor should accept Legislature’s budget, lead on PFD change

News-Miner opinion: Alaska is just a handful of days away from an embarrassing and unnecessary shutdown of its state government.

Gov. Mike Dunleavy can prevent this by signing into law the fiscal 2020 budget that the Legislature sent him on June 13 for the fiscal year that starts July 1.

He should sign it as it was delivered to him and end this madness. The governor wanted a reduced budget, and he got one, although not to the extent he had sought. The Legislature made $190 million in cuts from the current year’s budget.

The governor should resist using his line item veto authority to turn the Legislature’s approved budget into the unworkable spending plan he presented to the public in February. He should be satisfied that in the first few months in office he has forced Alaskans to grasp the urgency of the state’s financial situation.

But that urgency shouldn’t lead to a decimation of the functions of our government. It should instead lead to acceptance of a solution that encompasses budget vigilance, wise but restrained use of our remaining savings, realization that Alaska must adopt some form of statewide tax, and recognition that the Alaska Permanent Fund dividend cannot always be funded to the extent that the statutory formula specifies.

Alaskans have spoken out strongly against the governor’s proposed massive cut to the University of Alaska; the gutting of the Alaska Marine Highway System; the 25% cut to K-12 education and the elimination of programs such as Best Beginnings and grants for Head Start; the increased rates for the Pioneers’ Homes; the deep cuts to the Department of Health and Social Services, including the termination of its grant programs; and numerous other reductions across nearly all departments.

Not every Alaskans feels that way, of course. But there seems to be a genuine awakening among a substantial segment of the population that our tax-free ride is over, especially if we value many of the things that the governor wants to rid us of.

The difficult part at the moment is that the budget includes no funding for this year’s Alaska Permanent Fund dividend, which this year has become the sand in the gears of the political decision-making machinery. The governor wants Alaskans to have a full dividend; a majority in the Legislature says the state can’t afford it.

That majority is the rational bloc. It is makes no sense from the big picture viewpoint, no matter what you think of the dividend, to pay out an estimated $1.2 billion in dividends later this year for an estimated $3,000 dividend when the state is facing a substantial budget deficit. 

The dividend has poisoned the debate, yet there is no escaping that it is an integral piece of the budget standoff between the governor the Legislature.

What we need is for these two branches of government to compromise on the size of this year’s dividend and to agree that it is time to rethink how the amount of future dividends are to be calculated. Rep. Adam Wool, of Fairbanks, for example, has proposed legislation to calculate the dividend based on oil revenue rather than on the five-year average of the permanent fund’s earnings.

“When oil prices or production are high, the dividend will be higher and will help offset Alaskans’ higher energy costs,” he wrote in a column earlier this month. “If oil prices or production drop in the future, the state won’t be obligated to pay a large dividend it can’t afford.”

Rep. Wool’s idea may not be the right way, but who knows? The point is that the discussion needs to happen, and it needs to lead to a change by the end of the Legislature’s second regular session in spring 2020. That may help minimize the dividend’s impact on annual budget discussions. 

Gov. Dunleavy, if he were to sign the budget without eliminating or reducing any of its components, compromise on his demand for a full dividend and work with legislators to find a better way to calculate the dividend, could claim to be the leader that Alaska needs at this critical hour. He would be able to present himself as the statesman and as the person who will lead Alaskans away from the bleak future that his proposed budget laid out for Alaskans in February.

A majority of Alaskans, after surviving the cardiac jolt caused by the governor’s initial budget blueprint, would likely be willing to follow him to that stable, saner future.

The Daily News-Miner encourages residents to make themselves heard through the Opinion pages. Readers' letters and columns also appear online at newsminer.com. Contact the editor with questions at letters@newsminer.com or call 459-7574.

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Guidelines

The Daily News-Miner encourages residents to make themselves heard through the Opinion pages. Readers' letters and columns also appear online at newsminer.com. Contact the editor with questions at letters@newsminer.com or call 459-7574.

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