November 4, 2025 • 52 mins
Welcome to The Weekly Top 3 — our look at the top 3 things on our mind here at Alaskans for Sustainable Budgets — for the week of November 3, 2025.
This week, our top 3 issues are these: 1) we discuss a stunner: how Alaska takes more as a share of income from its middle & lower-income families than California takes under its income tax from its billionaires (2:14); 2) we explain why the Task Force on Education Funding needs to address how they actually intend to FUND the increased spending they want (19:49); and 3) we examine the irony of Alaska’s SNAP funding “crisis,” how many of the same legislators who are now outraged about the potential loss of funds themselves voted to take even more from the very same recipients in the last budget (38:03).
The Weekly Top 3 is a regular weekly segment on The Michael Dukes Show. The Show broadcasts on Facebook and YouTubeLive as well as via streaming audio from the Show’s website weekdays from 6–8am. We join Michael weekly in the first hour of Tuesday’s show, from 6:25–7am, for a discussion between the two of us about our three issues.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:09):
Hi, this is Brad Keithley, Managing Director of
Alaskans for SustainableBudgets.
Welcome to the Weekly Top Three,the Top Three Things on Our Mind
here at Alaskans for SustainableBudgets for the week of November
3rd, 2025.
The Weekly Top Three is aregular segment on the Michael
Duke Show.
The show broadcasts on bothFacebook Live and YouTube Live,
(00:31):
as well as via streaming audiofrom the show's website weekdays
from 6 to 8 a.m.
I join Michael weekly in thefirst hour of Tuesday show from
6.10 to 7 a.m.
for a discussion between the twoof us about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, YouTube,
(00:52):
SoundCloud, Spotify, andSubstack pages, also on the
Alaskans for Sustainable Budgetswebsite, as well as the
project's page on national blogsite, medium.com.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that in addition tothese podcasts during the week,
(01:13):
you can also follow andparticipate in the discussion
with us of these and otherissues affecting Alaska's fiscal
and economic condition byfollowing us on the Alaskans for
Sustainable Budgets Facebookpage and through our posts on X,
formerly Twitter.
This week, our top three issuesare these.
First, we discuss a stunner, howAlaska takes more as a share of
(01:36):
income from its middle and lowerincome Alaska families than
California takes under itsincome tax from its
billionaires.
Second, we explain why the taskforce on education funding needs
to address how they actuallyintend to fund the increased
spending they want.
And third, we examined the ironyof Alaska's SNAP funding fiscal
(01:59):
crisis, how many of the samelegislators who are now outraged
about the potential loss offunds themselves voted to take
even more from the samerecipients in the last budget.
And now let's join Michael.
SPEAKER_01 (02:14):
Before we get into the deep end, let's let's let's
talk about what I mentionedyesterday because people almost
lost their mind when I made, Iquoted you from the message you
sent me this weekend when youwere like, holy cow, spending my
free hours going through allthese tax information because
he's fun at parties, and thendiscovered that Alaska's taxes
um actually taxes the the middleand lower income more than
(02:37):
California taxes theirgazillionaires.
Walk me through this, Brad.
SPEAKER_00 (02:41):
What's going on?
Well, Michael, as you say, funat parties.
And just to prove that thisweekend, I started going through
some tax data, mostly because Iwanted to put uh an Alaska flat
tax, what an Alaska flat taxwould look like in context with
other states that have flattaxes.
There are now 14 states, twomore on the way that have flat
(03:04):
taxes.
Uh it is the tax foundation hastalked about it as a as a as a
uh a revolution, uh tax, a flattax revolution.
And Alaska would fit if we ifAlaska adopted a flat tax to
cover its deficits as opposed tousing PFD cuts, Alaska would fit
right in.
As I was doing the chart, uh I Ithrew in the top 10, the
(03:27):
marginal rates from the top 10uh states uh that have
progressive income taxes, justfor you know some perspective.
And then I at separately I'vebeen working on some uh
calculations with respect towhat the PFD cuts does by income
bracket in the state.
And all of a sudden it dawned onme uh uh what the what the
(03:49):
result was.
So if you've got the chart infront of you, uh it'll take it's
uh it's gonna take a sec.
SPEAKER_01 (03:54):
I apologize.
It'll take a sec, but it'll popup a second here.
SPEAKER_00 (03:58):
So the so what I did was I charted the impact of
using PFD cuts by income bracketon on Alaskans by the low,
middle, low quartiles, low, low,middle, upper middle, and high
uh by income bracket, andcompared the impact of those to,
(04:20):
there we go, and compared theimpact of those to the marginal
tax rates, the highest marginaltax rates in the nation, the
top, the top 10 marginal stateincome tax rates.
And what this chart shows, thethe flat tax is on the right,
and I'll get to that at somepoint, but the but on the left
before the break, what thisshows is the impact of PFD cuts
(04:42):
uh on by income bracket uh forthree categories of income
brackets in the red on forAlaska.
Uh the first is the lowest 25%,the impact of PFD cuts as a
share of income, what PFD cutstake as a share of income for
the lowest 25%.
The second over uh is the impacton the low 50%.
(05:04):
So I combined the low 25% andthe lower middle 25%.
And then just because I wantedto see what the result was, I
did the I did the lowest 75%,uh, the impact of PFD cuts on
the lowest 75%.
And that's the third red bar uhfrom the left.
And that shows the impact, theaverage impact of PFD cuts on
(05:26):
low, lower, middle, and uppermiddle income families as a
percent, as a share of income,as a percent of total income
using uh the latest IRS data forincome.
And then the blue uh the bluebars next to that are the are
the marginal rates, the highestrates, the rates that apply that
(05:48):
apply to the billionaires, themillionaires and the
billionaires, uh in each of thestates that have in the top 10
states that have progressiverates, the the the top uh
marginal rates uh in the staterates uh in the nation.
And as you can see, Californiais there, 13.3%, highest
marginal rate in the nation.
Uh Hawaii, which I hadn't reallyfocused on before, has the next
(06:10):
highest marginal rate, uh, 11%.
New York has the next highestmarginal rate, which we a lot of
people talk about at 10.9%, andthen it goes on down from there
uh in the remaining 10.
That is the marginal rate, thehighest rate, the rate they
charge their billionaires ineach of those states.
And as you can see, as a shareof income, as a percent of
(06:32):
income, those rates are dwarfs,dwarfed by the the impact of PFD
cuts on the lowest uh 25%, onthe lowest 50%, and even on the
lowest um uh uh 75%, the low,low middle, lower middle, and
and upper middle uh incomefamilies.
(06:54):
To put this another way, to putit in a way that I've been
trying to phrase this in a waythat will show the impact.
Alaska is the California ofregressive tax rates.
It is not only the California ofregressive tax rates, when you
look at the lowest 25%, youcould add California's marginal
tax rate plus New York'smarginal tax rate plus Hawaii's
(07:18):
marginal tax rate, and it wouldstill be less than the than the
average marginal tax rate on thelow 25%.
You could add, you could add umuh California and New York and
you get pretty close to stillbeing higher with the average
marginal tax rate on Alaska'slowest 50%.
(07:40):
So when you think about when youthink about, oh my gosh, you
think about what people sayabout California and New York,
oh my gosh, those marginal taxrates, they're driving people
out of the state.
They're driving people fromCalifornia to Texas or from New
York to Florida.
They're that most marginal taxrates are horrible.
They're having such a horribleeffect uh on uh on outmigration.
(08:01):
Well, look at what Alaska's taxrates are doing to our to our
lowest 25%, our lowest uh 50%,and our lowest 75%.
If you want an explanation, ifyou want to understand why
Alaska has outmigration uh within in its working class, working
family, uh working age uhfamilies, if you want to
(08:24):
understand what's going on, justlook at those marginal tax
rates.
Just like California, just likewe say, California and New York
and Hawaii has other thingsgoing on, but California and New
York are driving their highincome families out of the
state.
Look at what those marginal taxrates are doing to California's
or looking to Alaska's middleincome uh families.
SPEAKER_01 (08:46):
Can you remind us, uh Brad, what these are uh
quartiles, not quintiles.
So can you remind us what whatis the, you know, give us the
ballpark of what is the low,middle, lower, middle, middle,
what what is the range there?
We're talking about 25, 50, 75.
SPEAKER_00 (09:02):
It's really interesting, Michael.
I've got I've got the sheet andit'll be in the in the Friday
column, uh, the the precisenumbers.
But even the the average incomein the upper, in the in the
bottom 75%, the average incomeamong lower, lowest, lower
middle, and upper middle, theaverage income is less than
$50,000.
(09:23):
Alaska, Alaska has a huge skewbetween the between the average
income for middle incomefamilies, low and middle income
families, and the upper 25%.
It is a huge skew.
I mean, there's this huge gapthat goes on between the two.
If you average in, excuse me, ifyou average in the top 25%, that
(09:46):
red bar would drop down to whereyou see, mostly where you see
the first red bar uh on theright-hand side, 4.9%.
That's because the averagingimpact of the income from the
from the top 20% really bringsuh the average, the average
down.
Uh but so it I I if uh my memoryis about 16,000, 17,500 maybe
(10:10):
for the low 25%, maybe in the25s, uh somewhere, 26, 27,
between 25 and 30 for the forthe lower 50 percent, the
average income for the lower 50percent.
But I'm pretty confident that Iremember the number for uh for
the the bottom 25 percent orbottom 75 percent, the uh the
(10:31):
the lower the lower and thecombined lower and and and
middle income classes is lessthan$50,000.
SPEAKER_01 (10:38):
Now, this is uh I mean this is an interesting
comparison because I mean itit's not necessarily proving
anything except for our taxrate, you know, this hidden tax
rate through the PFD cut ishighly skewed.
Uh because again, we'recomparing, you know,
billionaires to lower and middleincome and you know, or
millionaires are the wealthy,but it's indicative of what's
(10:58):
going on in the state as far asthat take uh and how it's
affecting the uh you know thelowest 75% of income earners in
the state.
So that is an interesting uhtake.
No, there's not a whole lot ofbillionaires living in Alaska,
but when you look at it and yourealize that California is not
even treating their marginalslowest 75% in the same way, you
(11:21):
realize that this is a, I mean,this is a significant, this is a
significant change for Alaska.
SPEAKER_00 (11:27):
If I were to do the marginal tax rate on our
millionaires, let's just pickmillionaires, let's not, let's
not pick on billionaires.
If I were to you do the marginaltax rate for our millionaires in
Alaska uh and put it in thecontext of those blues bars, it
would be 0.2%, 0.2% compared toAlaska's 13.3%.
(11:48):
So what you I mean, it just itjust shows that it demonstrates
the regressivity of the of theAlaska tax system of using PFD
cuts to raise uh to raiserevenues.
The the Alaska's millionaires oreven$100,000 heirs uh are paying
minuscule uh tax rates, averagetax rates, compared marginal tax
(12:09):
rates compared to those in thetop 10 states, or indeed any
state that has a progressive,has a progressive income tax.
I mean, I could put all of themout there, and Alaska would
still be the lowest.
But but what what you know, sowhile we're we're taxing our
hundred thousandaires and ourmillionaires at a very low rate,
we're taxing our middle and uhmiddle and lower income Alaska
(12:30):
families at an increasinglyupper rate, top rate.
Right.
So you can see you can see howbig that hit is by comparing it
to the marginal rates that arein the in the other states.
SPEAKER_01 (12:42):
And no, we're not talking about populations.
This is a per capita per, thisis about income, not about uh
populations.
Uh quickly here, two minutes uhuh the the flat tax is that
what's on the right here?
This is the right-hand side ofthe of the equation.
SPEAKER_00 (12:56):
Right.
So this does the flat tax, theflat tax by state.
There are 14 states that haveadopted it.
There are two more that are inprocess of adopting it, a
healthy, healthy chunk.
And it looks at the flat tax bywhat the flat tax rate is.
Um, and I'd have to blow this upto figure it out.
I don't have oh, there we go.
Idaho is the top at 5.7%.
(13:19):
Idaho and Utah, uh, both statesthat are in the Western region
and states that are booming, uhbooming state economies, have
higher uh flat tax rates thanAlaska would if we covered our
deficits through flat taxes asopposed to uh as opposed to
through uh PFD cuts.
(13:40):
The the other thing I looked at,some of these flat tax rates are
misleading because the state hasboth a flat tax and a sales tax.
And so the flat tax is lowerthan than it would be if you
were trying to recover all oftheir deficit through uh through
through just the flat tax.
So I looked at Alaska and said,okay, so what if we had a sales
(14:00):
tax and a flat tax and werecovered half our revenue, half
the deficit through the salestax, and half the revenue
through the flat tax.
What would Alaska's flat tax be?
And that that is comparable tomany of the states who in this
chart who also have sales taxes.
And Alaska's flat tax rate at2.4%, if we set it up that way,
would be the would be thelowest.
(14:22):
Hang on a second.
SPEAKER_01 (14:24):
Incoming voice calls from Lorena percent.
SPEAKER_00 (14:27):
Would be the would be the lowest uh uh uh flat tax
rate in the nation, uh if we ifwe did it the same way some
other states do.
So a flat tax, I mean, peoplesay a flat, well, we can't even
afford a flat tax.
Well, you know, look at ourregional competitors, Idaho and
Utah, they have higher flattaxes.
And our flat tax is about thesame as several several other
(14:48):
states.
And if we if we paired it with asales tax that raised part of
the revenue through a sales tax,our flat tax rate would be the
lowest in the nation.
So it's those those who go runaround claiming, oh my God, we
don't have enough of a of a taxbase, we couldn't nearly raise
enough uh through uh through uhincome taxes or through other
forms of revenue measures asopposed to PFD cuts.
(15:10):
Yeah, we can.
I mean, and and and we fit rightin in the nation in terms of in
terms of where uh we end up witha flat tax rate.
SPEAKER_01 (15:17):
Question Does the flat tax rate take into
consideration income that's nottaxed, such as the first$12,000
not being taxed?
Um I don't know if it does ornot, Brad.
SPEAKER_00 (15:28):
No, uh a lot of states don't.
A lot of states?
Yeah, go ahead.
No, a lot of states don't havedeductibles like that.
So I didn't include a deductiblelike that.
What David's talking about isthe federal income tax.
Uh not all states are are basedon the same basis as the uh as
the federal income tax.
They have different bases.
So no, that takes into accountall income.
(15:50):
The Alaska flat tax takes intoaccount all income.
And then the 2.4% rate on theright could be the result not of
using not of uh pairing it withthe sales tax, but of pairing it
with raising uh revenues throughreforming uh oil taxes.
It could be it could be pairedwith a lot of things uh that uh
that we improve POMB uh uh uhperformance, PFD performance, or
(16:14):
PFC permanent fund corporationperformance.
It could be paired with a lot ofthings, and we could we could
bring that rate down.
So it's just representative ofwhat the rates would be under
certain conditions.
SPEAKER_01 (16:24):
And Jim asks, what tax system in Alaska?
And you're talking about usingPFD cuts is a as a form of
effective, it's a tax,effectively, it's a tax.
And so that's what you'retalking about here with this, is
that it's a PFD cut.
SPEAKER_00 (16:36):
Um I there was an article.
I mean, we're we're we should bepast that point of of arguing
about whether PFDs are taxes.
There was even an article inMust Read, uh, a column in Must
Read that that that that talkedabout the PFD cuts as taxes.
So yeah, I mean that's what theyare.
That's what that's what they'vebeen throughout.
SPEAKER_01 (16:54):
Wasn't it Matt Berman from ICER that basically
said that you know, he said thatthis is effectively a tax?
You know, call it whatever youwant, but it has the same effect
as a tax.
It's effectively a tax.
SPEAKER_00 (17:03):
So yeah, it's like it's like tariffs.
I mean, at the national level,tariffs are called tariffs
instead of taxes, but they'retaxes.
I mean, they are taxes on onimports.
Um, and we just call themtariffs because they're a
specialized kind of tax.
TFD cuts are also a specializedkind of tax.
They're still a tax, they're inthe in the big umbrella of
taxes.
They divert revenue from privateprivate income over to the
(17:27):
government, withhold and divertrevenue over to the government.
That's what a tax is.
Uh and that and that's what theyare.
So, yeah, that's the that's thesystem we're talking about.
SPEAKER_01 (17:36):
It's interesting.
Um, this was again kind of a10,000-foot view.
Um, David uh uh asked early on,he said, have you considered the
benefits that the lowest 25%receive, like Snap and Free Cell
phones, Medicaid, et cetera.
But I mean, this is the10,000-foot view.
It wasn't necessarily to divedown into the details, right?
SPEAKER_00 (17:56):
Yeah, no, and and I'm taxing them.
I mean, to go back to his otherquestion about whether I
included a 12,000 deduction, Ididn't.
I taxed them, tax them, taxedthe lower 25%.
This the PFD cuts, I mean, let'slet's focus on this for a
minute.
PFD cuts tax the lowest 25%.
They tax them at a at a at ahuge marginal rate.
So, so the tax system we use,the flat tax system we used,
(18:20):
also taxes the lowest 20%, butit's a better tax for them.
It's a lower tax for them.
They save money, they they havemore income in their pockets by
substituting a flat tax for PFDcuts.
SPEAKER_01 (18:32):
Uh so well, look, I'm not a college graduate, but
I mean, even I understand thatthe the big red line, the 37%,
that 4.9% is still much lowerthan 37%.
Even I understand that, right?
I mean, so yeah, if you weretalking about a flat tax versus
uh, you know, this effect ofthis PFD tax on the marginal
(18:54):
rate, yeah, it's pretty prettyobvious that uh they would be
better off with a flat tax atthat point as well.
It would be the upper incomesthat would be screaming at that
point.
unknown (19:03):
Yeah.
SPEAKER_00 (19:04):
Because the upper but but the thing about a flat
tax that uh that I think is isis the killer argument for it is
no one pays any more thananybody else.
Yes.
The upper income proportionally.
The Alaska is a share of income.
The Alaska upper incomes wouldpay a bit more in terms of the
share of their income using aflat tax as opposed to PFD cuts,
(19:27):
but they wouldn't pay any morethan anybody else as a share of
income.
Everybody would have the sameskin in the game uh in terms of
government costs.
And as we've talked aboutbefore, I think that would
motivate the upper incomes whonow have no incentive, no
financial incentive to push backon spending.
It would motivate the upperincomes to start pushing back on
(19:48):
spending.
SPEAKER_01 (19:51):
Well, we we knew that they were gonna do it.
We knew as soon as we saw themakeup of the education task
force.
We it was confirmed when we sawthe first tranche of guest
speakers that they were going tohave at the education task
force.
And lo and behold, look at whatthey're talking about already.
They're already talking abouthow they need to increase the
(20:14):
funding.
Brad, this is all about theeducation uh task force and how
how they're looking for more.
The funding is the answer.
Funding is funding is theanswer.
What we just need is we justneed more money.
Oh, we could kill all theseother programs too.
By the way, the Alaska Reedsthing, which is actually showing
progress.
We should, you know, but themoney, we need more money.
(20:36):
We knew it was coming, and hereit is.
SPEAKER_00 (20:38):
Well, yeah, we had we had a broad range of
testifiers at last week's uh uhsecond meeting of the education
task force, the bicameraleducation task force.
Um, and it was uh it wasinteresting.
It was from STEM to stern,basically, people talking about
needing needing more money.
Very, very few ideas on how touh how to raise the additional
(21:03):
money that's needed.
AML, um uh I want to dive deeperinto this exactly what they're
proposing, but AMLA the AskAlaska Municipal League.
So just so people know what AMLis.
Right.
Uh the Alaska Municipal League,thank you, had uh had one
proposal uh that uh wasinteresting because it said,
let's take off the cap on localcontribution.
(21:25):
Let's allow local communities tocontribute more uh toward
education.
If the local communities wantmore spending in their in their
school system, let's allow themto contribute more.
Um and that would have someramifications at the state level
because it would undo the thereason we have limitations on
local spending is to fit withinfederal guidelines uh for a
(21:47):
funding a funding source thatbrings about$160,$150 million a
year, if I recall correctly,from the federal government to
the to the state government.
If we took off the spending capand allowed local governments to
spend more if they wanted to ontheir school districts, it would
increase the disparity betweenthe upper, the top spending
districts and the lower spendingdistricts, the consequence of
(22:09):
which we would no longer qualifyfor that federal funding.
Um and so it would have theimpact of taking that revenue
source uh out of the system atthe state level, although that
revenue would still go to the tothe local districts that qualify
for it.
So it wouldn't take it out ofthe state, it would just take it
out of the state level.
Um and but AML was was saying,let's undo that cap.
And for those districts who wantto spend more, let them spend
(22:31):
more.
And for those districts whodon't want to spend more, uh
that's okay as well.
That's really the only, that wasreally the only comment that was
made during the entirepresentation about funding
sources.
The rest of it was all aboutspend more, spend more, spend
more, spend more, spend more.
And and I think RepresentativeRuffridge uh did a service uh in
(22:51):
uh during the hearing when hesaid this, and I'll quote from
the the uh Anchorage Daily Newsuh uh uh comment on what
Ruffridge said.
Both Ruffridge and Senator MikeCronk, a top toke Republican
also serving on the committee,have said that education task
force discussion should beshaped by the state's fiscal
situation.
This is what Ruffridge said.
(23:12):
I think we all actually have anecessity to answer the
question (23:16):
what would be the way that you personally, the those
testifying in favor of increasedspending, what would be the way
that you personally or peoplethat you talk to, people in your
circles, would choose to fundthese additional elements?
That is, who pays?
How are we going to pay for theadditional spending these people
are talking about?
Just saying, as many did, asmany testifiers did, the
(23:40):
legislature will figure thatout.
No, we won't, Ruffridge said.
We've had that in front of usfor a long time.
This is this is exactly thesame, the flip side of all of
the testimony that's gone onover the last decade uh about
spending cuts.
Every time that that somebodywould get up in front of the
legislature and say, Oh, thesolution to all of this problem
(24:03):
is spending cuts.
Just cut spending.
When they were asked whatspending they would cut, the
response has been, oh, thelegislature will figure that
out.
You just need to cut spending.
It's not our problem where youcut spending, you need to figure
that out.
And the legislature never has.
They've just kept spending.
And now we've got we've got theflip side of that.
And fortunately, RepresentativeRuffridge, at least thus far, is
(24:23):
is is bringing it out.
We've got the flip side of thatby people in the education
committee saying, we need tospend more, we need to spend
more, we need to spend more.
And and no one saying where theheck the additional dollars are
supposed to come from or how thelegislature is supposed to raise
the additional dollars.
And representative rufferage issort of pushing back in the same
way that that those did duringthe spending cut years by
(24:44):
saying, you know, where wouldyou make the, where where would
you would you raise the revenue?
These this hearing is sort of infantasy land, if they don't, if
if if they the testifiers andand the the representatives, the
legislators on the panel, ifthey don't confront the the
where's the funding going tocome from for this additional
(25:05):
spending, if they don't addressthat additional issue.
Because everybody can say, oh,we need to spend more in this
area, we need to spend more inthis area, we need to spend more
in this area, we need to spendmore in this area.
If they don't have theresponsibility of coming forward
with where that revenue issupposed to come from, who we're
going to affect, who's going tobe hit uh by uh by that uh by
(25:26):
that increased uh spending,who's gonna fund the increased
spending, if they don't have toconfront that, there's no
there's no ceiling, there's nopushback, there's no there's no
counterbalance to to we need tospend more, we need to spend
more.
If you force, if you forcetestifiers to come in and say,
we need to spend more on X, andand I'm and and and I think we
(25:47):
should pay for it by progressiveincome tax, or we should pay for
it by deeper PFD cuts, or weshould pay for it by a flat tax,
then you're gonna get, you'regonna have some constraints on
the conversation because peopleare gonna say, oh, I don't want
to, I don't want to pay more forthat.
It's nice, it's nice in in theabsence of having to come up
(26:08):
with the with the with thefunding source.
It's nice in in the absence ofthat to say, oh, we need to have
retirement, uh defined benefitretirement, we need to have you
know more in the classrooms, weneed to have higher teacher
salaries, we need to cut down onclassroom size so we mean need
more teachers overall.
It's all nice to say that if youdon't have to confront the
constraint of where the heck themoney's gonna come from.
(26:30):
But if you have to confront thatconstraint, if you have to say,
as those who advocated spendingcuts did in the in the last
decade, if you have to say whereis it gonna come from, where are
their spending cuts going tocome from, or where's the
additional revenue is gonna comefrom, if you have to confront
that, then you then you have abalance at least between between
(26:51):
you have a constraint on on theincreased spending that you're
talking about, and people startpushing back uh on that
increased spending.
So I think he was alone in inpushing back.
Refferage was alone in thatpushback out of the out of the
what are there, eight panelmembers or so.
He was alone in that pushback,but at least he was making the
(27:12):
pushback uh on uh on that issue.
And that's an issue I think thatI hope he keeps articulating,
Senator Cronk articulates alongwith him.
Uh the only two Republicans onthe on the uh committee um on
the task force, I hope they keeppushing back on that.
Uh and I and I hope it's it's ait's an issue that starts
(27:32):
resonating uh around the stateuh as people start uh talking
about uh what therecommendations are.
SPEAKER_01 (27:39):
But again, Brad, this was not surprising.
Again, looking at the makeup andunderstanding that this was uh
this is 100%, as Kevin said,100% kabuki theater, that they
knew that they basically had anoutcome that they already
wanted, and they're looking forpolitical cover um for that uh
for that kabuki theater uh asthey go through.
And that's where we're at rightnow.
(28:00):
That the the the only answer ismore money.
And uh and but again, there isno more money.
How do how do we do that?
We had a hard, I mean, they hadto rob an account to pay for
this this snap thing, whichwe're gonna talk about in the
next segment.
They had to rob money out ofanother account because they
just don't have, you know, theydidn't have$10 million laying
(28:20):
around out of a state that's gota six billion dollar budget.
They didn't have$10 million justlaying around to try and offset
this emergency here.
And so uh, you know, where arethey gonna come up with, you
know, what another three, fourhundred million dollars for
forever uh per year forever totry if they increase that's just
(28:42):
assuming they increase the VSAby another thousand to try and
reach that eighteen hundred uhdollar mark that they were
looking at.
This is this is crazy.
SPEAKER_00 (28:51):
Uh um, you know, that this is the answer.
I I want I want people, I mean,so the assumption is they'll
come up, they'll they'll do itthrough PFD cuts, right?
I mean, there's still 650 plusor uh plus or minus million out
there in PFD.
So the assumption is they'llthey'll do it through.
I want people to have toconfront that.
I want testifiers to have to saythat we're gonna, we're we will
(29:12):
pay for it through additionalPFD cuts.
We will pay for it throughadditional, taking additional
money out of the pockets ofmiddle and lower income Alaska
families.
Notwithstanding the facteverybody on the task force is
in the top 20%, notwithstandinga lot of those pushing for
increased spending are in thetop 20%.
We will pay for it by takingmoney out of the pockets of uh
(29:34):
increased amounts of money outof the pockets of middle and
lower income Alaska families.
I want them at least to have tosay that.
Uh right.
I I do give credit to AML, andagain, I need to, the Alaska
Municipal League, I need to diginto this deeper about exactly
what they were saying.
But I do give credit to them forraising the possibility that the
local government uh would haveto actually would would would
pony up additional money if theywant, if they want additional uh
(29:58):
uh spending uh in.
Their schools.
As I said in a previous column,and we talked about previous
landmine column, and as wetalked about in a previous
segment on the show, I think wehave a huge disconnect in
Alaska.
We have the nation's lowestlocal contribution to the school
school systems.
(30:22):
Whereas in the rest of thenation, it's like 40% local, 40%
state, 20% national, federal.
In Alaska, it's like 80% stateand a minor share coming from
the local.
And as a consequence, you havethe local school districts who
are making the decisions aboutteacher contracts and making the
(30:44):
decisions about striving forclass size and all that sort of
stuff.
They're not paying for it.
When you get to the who paysquestion of saying, okay, you
want to you want more spendingin the school district?
You pay for it locally.
(31:04):
I think there's merit.
I think there's merit in that.
SPEAKER_01 (31:07):
And I want to dissect that a little bit during
the break here because, again,this is part of a the reason we
do that, and the reason thatthey limit it is because there's
federal funding attached to it,uh, and the federal funding has
conditions.
Uh, we could just stop takingthe funding, in which case we
could do whatever we wanted.
But the the thing is it's asignificant amount of money.
So we're gonna we'll we'll talkabout that here in the break.
(31:29):
But we've got number numberthree coming up, which is uh
which is a doozy.
Uh, we're gonna talk a littlebit about the snap benefits and
more.
Uh, but again, nothingsurprising.
Final thoughts here on the uh onthe education task force and
their and their and and theirpoints, uh Brad.
SPEAKER_00 (31:46):
Uh well, nothing surprising in terms of pushing
for increased spending.
Uh a little bit of a of apleasant surprise out of what
AML had to say and uh and apleasant surprise out of what
Representative Rupert Rufferichhad to say in terms of pushing
back on those calls forincreased spending without
talking about where the money'ssupposed to come from.
But but generally speaking, nosurprises.
(32:07):
Right.
Who pays, right?
SPEAKER_01 (32:08):
That's the biggest question amongst this whole
thing is who pays.
And uh only a handful of peoplein the whole legislature seem to
be asking that consistently.
So we were again, this was thiswas my question earlier or you
know, earlier on the last yearwhen we were starting to talk
about this and this cut thisconcept of you know increasing
local contributions came upbecause some people are paying
(32:30):
up to the up to the cap already.
And it's an artificial capthat's been brought on by this
uh federal money, which issupposed to fix inequity, by
basically saying people who livein their communities can't spend
more on their schools if itoutpaces smaller, less
prosperous communities, I guessI should say, uh, in their in
(32:52):
their thing.
And there's that equity moneythat comes out of that.
Uh, but you're saying that thatwouldn't necessarily matter
because the money would then godirectly to those communities
versus going through the state'shands?
I I didn't I didn't hear thatpart of it.
SPEAKER_00 (33:04):
So yeah, so so so the money is coming uh on behalf
of rural districts that havesubstantial federal presence,
substantial federal ownership uhof lands in their districts or
other substantial federalpresence uh perhaps.
Um and so it's it's coming as aresult of the of the federal
(33:26):
money uh in lieu of taxes, inlieu of property taxes that
might otherwise be paid on thefederal lands, the federal
government is contributing moneyuh to uh on behalf of those
districts.
It it's it's a little artificialbecause the money comes to the
state if the state abides by theterms and conditions of that
(33:50):
money, which is that there notbe a greater disparity than X
between the amount of fundinggoing to the to the those
districts that are not fundinguh as much as other districts
are, if the disparity is is isX.
Um and so the state has foughthard to keep that source, that
source of money coming to it.
150, 160 million dollars is myrecollection of it.
(34:12):
State's fought hard fought hardbecause it reduces what this
otherwise has to come, otherwiseis coming out of the state
coffers for the BSA.
Um if the state breached thedisparity, if the state no
longer enforced those limits uhthat are required by the federal
funding attached to the federalfunding, if the state breached
those limits and no longer hadlimits on the disparity, the
(34:35):
funds would still come.
They would just go to thosedistricts instead of being
spread statewide, as happens nowthrough state funding, they just
come directly to those districtsas they earn it, as those
districts are entitled to it, umuh uh calculated on the basis of
you know what what federallands, the sheriff's federal
lands in their districts are.
(34:57):
So it would come into the state,it would just be targeted to
those districts.
And and the concern by the stateis the reason this gets to be a
state issue is the concern bythe state is oh, we'd have to
come up with the difference thento to fund the full BSA.
I mean, basically what the statesays is here's the BSA, here's
what the federal government isis is paying.
And so we only have to take outof state funds.
(35:18):
This, if you remove the federalfunds, if the federal funds go
to those districts, then thenthe state would have to pay the
full BSA.
You know, one response is well,you could lower the BSA um in
that event down to what you'reotherwise paying, you know, with
the with the state funds.
Um but but that's that's thethat's that's what's going on.
(35:39):
And I think that works, youknow, frankly, I'm uh I'm in
favor of that, in favor of doingaway with the disparity test and
increasing the burden because itwould increase the burden on the
local school districts to pay topay their own way.
I mean, if they want if theywant great schools, if they want
low uh uh uh number of studentsper class, if they want to pay
(36:01):
teachers, you know, you know,the top dollar in the nation,
then have at it.
But fund it from your sources.
I mean, do that balance becauseyou're the one deciding what to
pay the teachers, right?
Do that balance inside your ownsources.
SPEAKER_01 (36:14):
Yeah, if you want to keep these schools open, right?
These schools that are at 50%capacity, and that's what we're
seeing, you know, all thepicketing and the protesting and
the signs and everything, keepour school open.
Well, great.
Well, now you're gonna have topay through for it through your
property taxes or whatever elseif you want to keep doing that.
And there's an actual cost.
It's not just go to Uncle Sugarand ask them for more money.
(36:37):
It's now, oh, we've got to payfor it.
And that may change theequation.
SPEAKER_00 (36:41):
Yeah.
I mean, because one of thegreatest lobbyists, one of the
most powerful sets of lobbyistsuh that comes down to Juno for
increased school fundings isface is the local school boards,
right?
I mean, we would we we need morefor Johnny, for Johnny's in our
district, for Johnny's in yourdistrict.
We need more, more for them, andwe can't do it.
So, you know, the state's theone that funds it.
(37:02):
So you need to appropriate moreuh for us.
If if we shifted the burden,shifted an increasing share, not
the total burden, but shifted anincreasing share, a material
share of the burden to the localdistricts to pay for that, then
oh my gosh, you know, if if weincrease, if we pay teachers
more, we're gonna have to payfor it.
We're gonna have to, you know,convince our constituents that
(37:23):
are electing us to the schoolboard, we're gonna have to
convince them that we did theright thing by by paying our
teachers more.
And that and the the theconstraints on spending aren't
any longer as much at the statelevel, uh, where we've found
there's no constraints.
The constraints aren't as muchas the state level as they start
showing up in the local level.
(37:43):
So I think I think AML'sproposal, they may not intend it
this way, but I think AML'sAML's proposal of doing away
with the the contribu the thethe state having the
contribution and aid, uh thefederal federal contribution and
aid, I think the the AMLproposal to do away with the
state having it has merit.
SPEAKER_01 (38:03):
Okay.
Continuing on, Brad Kiefley isour guest, the weekly top three.
We're we're already at numberthree, how how we get here so
quickly.
Uh number three for Brad is theirony of Alaska's SNAP funding.
Crisis.
Boy, irony.
Tell me it ain't so, Brad.
Tell me there's no irony whenwe're dealing with that's ironic
(38:27):
that there's never any ironywith the Alaska legislature.
SPEAKER_00 (38:31):
You know, over the last week, as the SNAP crisis
has developed, and the SNAPcrisis for supplemental
nutrition, since we're spellingout acronyms, supplemental
nutritional assistance program.
See, I actually know what it is.
Since we're uh since uh foodstamp oh, there you go, cuts of
the chase.
Since since since we're talkingabout as we as the SNAP crisis
(38:55):
has been developing over thepast week, and the crisis is
that the federal government,since it shut down the claim by
the Trump administration, hasbeen they weren't going to fund
the SNAP programs after thefirst of November, that they'd
run out of funds.
And and as a consequence,everybody was was running around
like chickens with their headcuts off, uh concern about what
would happen if the if the ifthe SNAP benefits were were cut
(39:16):
off.
Over the course of the lastweek, I've just been chuckling
as I've seen uh various uhlegislators, you know, just up
in arms about the SNAP crisisand and and about uh about you
know, oh my god, what are wegonna do?
And and how do we how do we everresolve this problem?
I've been chuckling because ofthis.
(39:37):
It's the same, the same, it'sthe same legislators who are
running around being concernedabout it as who voted for PFD
cuts.
Voted in the budget for PFDcuts.
Oh yeah.
And and so, you know, since I'mnot fun at parties because I
spend all my time, you know,fiddling with the numbers, um, I
(39:57):
went I went and started doingsome numbers.
So we have, according to theaccording to the calculations
these legislators are using, wehave 66,000 people in Alaska,
uh, individuals in Alaska who umare suddenly without uh without
any form of support and reliefbecause the federal government
is cutting stamp.
(40:18):
Right.
So I took that times the amountof the PFD cut uh this this
year, what they would havereceived in October had we
complied with the statutory PFD,those same 66,000 or most, you
know, there may be a few who whodon't qualify for PFDs, but
those same 66,000 who uh who uhare were concerned about the
(40:39):
loss of SNAP benefits, uh, anddid that uh at times the PFD
cut, which was 2600, 2675 uhplus or minus$2,675 per PFD.
If we had paid out the statutoryPFD to those 66,000 people, that
would have been 175 milliondollars.
(41:00):
175 million dollars that wouldhave hit their banking accounts
or their pockets or however theheck they receive it, uh it
would have it would have been175 million dollars that that
hit that 66,000, uh 66,000people.
The whole SNAP crisis is about$27 million per month.
(41:23):
Right, right.
And and it's not gonna be it'snot gonna be for a full year
because eventually the federalgovernment will open.
Eventually, SNAP will get fundedat the federal level.
Um, so it's it's 27 million,$27million a month for however many
months this this crisis dragson.
That's the shortfall in whateverybody's concerned about, the
(41:43):
SNAP beneficiaries notreceiving.
They're not receiving$27million.
If we had paid out the PFD tothose same 66,000 people, 66,000
people in October, they wouldhave 175 million dollars in
their pocket.
More than enough, more thanenough to offset uh the loss of
(42:04):
SNAP benefits.
What's going on here is is iscontrolled.
I mean, so the legislaturedecided, those those who are now
running around concerned aboutSNAP benefits, the legislature
decided in its infinite wisdomthat it wouldn't put$175 million
in those people's pockets.
The legislature would hold on tothat$170 million,$175 million,
(42:27):
and they would decide whatprograms, what benefits, what,
what, what, what, what, whatplaces uh that money would be
spent.
Wouldn't put it in the hands ofthe people.
We'd the legislature woulddecide that$175 million.
Counting on SNAP benefits, Isuppose, to help help you know
deal with the fact they've taken$175 million out of their out of
(42:50):
those people's pockets, countingon SNAP benefits to sort of fill
in the uh uh the the gap thatwould be created in um in their
food security.
What happened when SNAP benefitsgot cut is all of a sudden this
this this whole charade that thelegislature goes through of
taking money out of people'spockets and saying we're doing
it for your own good uh gotexposed because rather than
(43:12):
rather than you know the SNAPbenefits showing up, which the
legislature let thoselegislators rely on when they
take$175 million out of theirpockets, uh rather than rather
than the SNAP benefits showingup, all of a sudden they didn't
show up.
And so all of a sudden the$175million they took out of their
pockets makes a difference.
People are suddenly going to go,people are now going to go
(43:33):
hungry because the legislature,not as much the SNAP benefits,
but because the legislature took$175 million out of those same
people's pockets um uh in inOctober.
That's that's what's reallygoing on.
The legislature took that$175million, relying on the federal
government to contribute$27million a month.
(43:54):
The legislature took$175 millionout of their pockets, um, and
and all of a sudden the wholething got blown up.
The whole Jerry rigged house ofcards got blown up when the
federal government said, Oh,we're not gonna contribute that
$27 million.
So instead of the legislaturesaying, oops, we shouldn't have
done that, we should, we shouldgo back and and make sure they
get that, that those people getthe money that is owed them
(44:18):
under the statute, under the PFDstatute, instead of instead of
doing that, the legislature allof a sudden said, Oh, wait, we
got to come up with$27 moremillion dollars from the state
from the state government tofill to fill in that hole.
It's just, I mean, the irony ofwhat's going on here, or the
hypocrisy, or whatever the heckword anybody wants to apply to
this, the what's going on hereis just is just stupefying.
(44:39):
I mean, we got a legislaturewho's actively taking money
specified by statute to bedistributed to these people,$175
million to go to these people,actively taking money out of
their pockets, diverting itelsewhere.
Right.
And then and then all of asudden going crazy when when the
federal government doesn't comeup with$27 million uh on a on a
(45:03):
monthly basis for its share offood stamps?
Oh my gosh, man, it's a crisis.
Huge what about the$175 million?
If it's if$27 million, if taking$27 million out of their pockets
is a crisis, what about the$175million you, the legislature,
you legislators who arecomplaining about this, all of a
(45:23):
sudden concerned about SNAP?
What about the$175 million youtook out of their pockets?
Isn't that an even biggercrisis?
SPEAKER_01 (45:30):
Right.
Well, and I I went at this fromthe other direction.
Uh, you went at it from the topdown, I went at from the bottom
up, and I said, you know, 66,000people, 27 million dollars.
Okay, so what is that?
It's 410,$409 per person,essentially, of the 66,000.
So if they had gotten their fullPFD, they would have essentially
(45:52):
a backup of 10 months worth offood that they could have
purchased for themselves.
10 months worth of food.
But the legislature said, no,no, you can't have$1,500.
You can only have$1,000, youcan't have the$2,000, you can't
have the$25, you can't have the$3,700 that you would have
gotten.
We needed that to spend on X.
And like you said, now all of asudden it's a crisis because uh,
(46:15):
well, we spent the money onsomething else, which we thought
was more important.
And it turns out it's not moreimportant than people eating.
Surprise! It's not moreimportant than people eating.
It's a simple$409 a month thatthey could have had and had in
the bank and be ready to go topay for their to their for their
family's food, but they justcouldn't do it.
SPEAKER_00 (46:35):
It this is, I mean, it sort of reveals something
else, right?
It reveals that thoselegislators who vote for PFD
cuts don't trust, don't, don'tvalue, don't, aren't confident
that the recipients are going tospend the money in a way that
that benefits the recipients, Iguess.
(46:56):
Uh, that that somehow, you know,we know better, the legislature
knows better how to spend your$2,700 or$2,675.
The legislature knows better howto spend that uh than you do.
Um, and and we know better howto how to you know spend it on
your behalf uh than uh than youdo.
(47:17):
And then it gets you know,something like this happens and
it's revealed that, oh my gosh,they would have had more than
enough to to cover their covertheir food.
There's an interesting studythat I'll go back to at some
point and do a deeper dive on,but there's a study that looked
at how um uh those in the lowerincome brackets actually what at
what they actually do with PFDs.
Um, and turns out that on thewhole, they save them and then
(47:42):
they allocate them out over theyear, uh, either to pay credit
cards or to pay rent or to dothis or pay for food or or this,
that, or the other thing.
It's not they don't blow them onone-time expenses.
The people who blow them onone-time expenses are largely
those in the upper incomebrackets who don't need the
money anyway.
And so, what do we do with this?
We'll go, we'll go spend it on avacation or we'll go spend it on
(48:04):
something else.
Those in the lower incomebrackets, the ones the
legislature isn't trusting, thethe ones the legislature says
you have to do it through foodstamps, you can only get your
money through food stamps, thosepeople are actually saving the
money and would have had thatmoney in their in their savings
accounts to be able to pay forfood.
StreamYard crashed.
SPEAKER_01 (48:19):
I still had internet, but stream yard
crashed out.
Uh, but how ironic, Brad.
I was just saying before I gotso rudely interrupted, that uh,
you know, how ironic that theseare the people we know that we
know how to spend your moneyuntil we don't, but then trust
us for more.
This is the I mean, that'sthat's it.
That that's the that's the wholething there, right?
SPEAKER_00 (48:38):
I mean, that's that's why that's why the PFD is
so important.
You you you it is it isAlaskan's in Alaskan's
individual share of theircommonly held wealth, it is
their dividend from theircommonly held wealth.
They ought to be trusted to knowhow to spend it.
And if you've got a few badapples, you know, like like
everybody wants to, you know,use the example of the snow
(49:01):
machines or whatever the heck,you know, people that that
one-time spending that thatpeople do that they use as the
example of how you why you can'ttrust these people.
If if if you got a few peoplewho do that, okay, that's fine.
But what you're doing is you'repunishing, punishing the
remainder, the ones who go outand save that money and use that
money and spread it out over theyear and use it for basic
(49:22):
necessities and use it to have acushion if something happens
like uh like you know, snap,snap is cut off.
What you're doing is you'repunishing those people by take
by taking their money away.
And this the whole snap debaclejust exposes that for what it
is.
You know, we know better how tospend your money up until you
know some government programthat we're depending upon goes
(49:43):
away.
Then turns out we didn't knowhow to better spend your money.
SPEAKER_01 (49:47):
Exactly.
Well, and that's the thing.
I mean, this is the wholeplanned economy, planned this,
planned that.
And it turns out thatbureaucracies and politicians
don't know better than theaverage person or the free
market in how to make thesethings work the best.
And that's part of the problem,100% for sure.
And there's like you said,there's it's hypocrisy.
It's a combination of it's it'sironic, it's hip, it's hip
(50:12):
irony.
It's hypocrisy and irony boiledtogether into an utter stew of
of badness.
So it's crazy.
Uh, all right, Brad.
Well, everybody wants to knowwhat Brad's doing.
Where are you at?
What are you doing?
What are you listening to?
SPEAKER_00 (50:24):
Where are you going?
It's music.
I'm in Seattle.
Uh, I'm going to a concerttonight.
Uh, it's a doubleheader of aScottish band that I love and a
U.S.
Irish music band uh that I loveuh at uh the triple door.
Some will know the venue inSeattle.
And uh so I'm in Seattle tofollowing the music to uh to go
to a concert.
SPEAKER_01 (50:44):
The Pied Piper of Music draws Brad all over the
world.
And what are you gonna do?
It's the only thing that he isfun at parties, contrary to our
commentary here on the program.
It's just the musical partiesthat he likes to go to.
Yeah, there you go.
There you go.
That's what it is.
He doesn't like those bigcocktail parties with all the
politicians.
He'd rather go to a musicfestival.
And I can't say I blame him.
SPEAKER_00 (51:05):
They they certainly don't like me at those cocktail
parties.
Because I asked them questions.
Oops, no, we don't want toanswer that question.
SPEAKER_01 (51:13):
No, yeah, we'd we'd like to ask them questions,
Brad.
And uh, you know, I'd love tosee you on the other side of the
microphone in front of some ofthese Senate committees and and
House committees because how howdo they answer the questions?
They just the problem is thatthey can't, they can't actually
answer the questions andarticulate an answer, and that's
(51:34):
that's the hypocrisy you'repointing out here, and I think
it's great.
Um, so it's uh it's good to haveyou on.
Anyway, thanks for covering forme for the minute there that I
was going.
Like, I'm like, oh well, Brad'sgot it.
Don't worry.
It looks like Brad's still on.
It'll be fine.
Brad's there.
SPEAKER_00 (51:51):
I don't know what Brad was saying, oh, Michael's
gone.
I don't know what to do now.
SPEAKER_01 (51:56):
Well, just just uh Phil, fill, fill.
You're you you've done the radiolong enough, you know what to
do.
So all right.
Well, Brad, thank you.
Um thank you for coming onboard, my friend.
I hope you enjoy your musicalinterlude, and we look forward
to talking to you again nextweek.
SPEAKER_00 (52:09):
Michael, as always, thanks for having me.
Well, that's a wrap for anotherweek's edition of the weekly top
three from Alaskans forSustainable Budgets.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
SoundCloud, Spotify, andSubstack pages.
And keep track of us during theweek on Facebook and Twitter.
This has been Brad Keithley,Managing Director of Alaskans
(52:32):
for Sustainable Budgets.
We look forward to you joiningus again next week on the weekly
top three.
Hi, this is Brad Keithley, Managing Director of
Alaskans for SustainableBudgets.
Welcome to the Weekly Top Three,the Top Three Things on Our Mind
here at Alaskans for SustainableBudgets for the week of November
3rd, 2025.
The Weekly Top Three is aregular segment on the Michael
Duke Show.
The show broadcasts on bothFacebook Live and YouTube Live,
(00:31):
as well as via streaming audiofrom the show's website weekdays
from 6 to 8 a.m.
I join Michael weekly in thefirst hour of Tuesday show from
6.10 to 7 a.m.
for a discussion between the twoof us about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, YouTube,
(00:52):
SoundCloud, Spotify, andSubstack pages, also on the
Alaskans for Sustainable Budgetswebsite, as well as the
project's page on national blogsite, medium.com.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that in addition tothese podcasts during the week,
(01:13):
you can also follow andparticipate in the discussion
with us of these and otherissues affecting Alaska's fiscal
and economic condition byfollowing us on the Alaskans for
Sustainable Budgets Facebookpage and through our posts on X,
formerly Twitter.
This week, our top three issuesare these.
First, we discuss a stunner, howAlaska takes more as a share of
(01:36):
income from its middle and lowerincome Alaska families than
California takes under itsincome tax from its
billionaires.
Second, we explain why the taskforce on education funding needs
to address how they actuallyintend to fund the increased
spending they want.
And third, we examined the ironyof Alaska's SNAP funding fiscal
(01:59):
crisis, how many of the samelegislators who are now outraged
about the potential loss offunds themselves voted to take
even more from the samerecipients in the last budget.
And now let's join Michael.
SPEAKER_01 (02:14):
Before we get into the deep end, let's let's let's
talk about what I mentionedyesterday because people almost
lost their mind when I made, Iquoted you from the message you
sent me this weekend when youwere like, holy cow, spending my
free hours going through allthese tax information because
he's fun at parties, and thendiscovered that Alaska's taxes
um actually taxes the the middleand lower income more than
(02:37):
California taxes theirgazillionaires.
Walk me through this, Brad.
SPEAKER_00 (02:41):
What's going on?
Well, Michael, as you say, funat parties.
And just to prove that thisweekend, I started going through
some tax data, mostly because Iwanted to put uh an Alaska flat
tax, what an Alaska flat taxwould look like in context with
other states that have flattaxes.
There are now 14 states, twomore on the way that have flat
(03:04):
taxes.
Uh it is the tax foundation hastalked about it as a as a as a
uh a revolution, uh tax, a flattax revolution.
And Alaska would fit if we ifAlaska adopted a flat tax to
cover its deficits as opposed tousing PFD cuts, Alaska would fit
right in.
As I was doing the chart, uh I Ithrew in the top 10, the
(03:27):
marginal rates from the top 10uh states uh that have
progressive income taxes, justfor you know some perspective.
And then I at separately I'vebeen working on some uh
calculations with respect towhat the PFD cuts does by income
bracket in the state.
And all of a sudden it dawned onme uh uh what the what the
(03:49):
result was.
So if you've got the chart infront of you, uh it'll take it's
uh it's gonna take a sec.
SPEAKER_01 (03:54):
I apologize.
It'll take a sec, but it'll popup a second here.
SPEAKER_00 (03:58):
So the so what I did was I charted the impact of
using PFD cuts by income bracketon on Alaskans by the low,
middle, low quartiles, low, low,middle, upper middle, and high
uh by income bracket, andcompared the impact of those to,
(04:20):
there we go, and compared theimpact of those to the marginal
tax rates, the highest marginaltax rates in the nation, the
top, the top 10 marginal stateincome tax rates.
And what this chart shows, thethe flat tax is on the right,
and I'll get to that at somepoint, but the but on the left
before the break, what thisshows is the impact of PFD cuts
(04:42):
uh on by income bracket uh forthree categories of income
brackets in the red on forAlaska.
Uh the first is the lowest 25%,the impact of PFD cuts as a
share of income, what PFD cutstake as a share of income for
the lowest 25%.
The second over uh is the impacton the low 50%.
(05:04):
So I combined the low 25% andthe lower middle 25%.
And then just because I wantedto see what the result was, I
did the I did the lowest 75%,uh, the impact of PFD cuts on
the lowest 75%.
And that's the third red bar uhfrom the left.
And that shows the impact, theaverage impact of PFD cuts on
(05:26):
low, lower, middle, and uppermiddle income families as a
percent, as a share of income,as a percent of total income
using uh the latest IRS data forincome.
And then the blue uh the bluebars next to that are the are
the marginal rates, the highestrates, the rates that apply that
(05:48):
apply to the billionaires, themillionaires and the
billionaires, uh in each of thestates that have in the top 10
states that have progressiverates, the the the top uh
marginal rates uh in the staterates uh in the nation.
And as you can see, Californiais there, 13.3%, highest
marginal rate in the nation.
Uh Hawaii, which I hadn't reallyfocused on before, has the next
(06:10):
highest marginal rate, uh, 11%.
New York has the next highestmarginal rate, which we a lot of
people talk about at 10.9%, andthen it goes on down from there
uh in the remaining 10.
That is the marginal rate, thehighest rate, the rate they
charge their billionaires ineach of those states.
And as you can see, as a shareof income, as a percent of
(06:32):
income, those rates are dwarfs,dwarfed by the the impact of PFD
cuts on the lowest uh 25%, onthe lowest 50%, and even on the
lowest um uh uh 75%, the low,low middle, lower middle, and
and upper middle uh incomefamilies.
(06:54):
To put this another way, to putit in a way that I've been
trying to phrase this in a waythat will show the impact.
Alaska is the California ofregressive tax rates.
It is not only the California ofregressive tax rates, when you
look at the lowest 25%, youcould add California's marginal
tax rate plus New York'smarginal tax rate plus Hawaii's
(07:18):
marginal tax rate, and it wouldstill be less than the than the
average marginal tax rate on thelow 25%.
You could add, you could add umuh California and New York and
you get pretty close to stillbeing higher with the average
marginal tax rate on Alaska'slowest 50%.
(07:40):
So when you think about when youthink about, oh my gosh, you
think about what people sayabout California and New York,
oh my gosh, those marginal taxrates, they're driving people
out of the state.
They're driving people fromCalifornia to Texas or from New
York to Florida.
They're that most marginal taxrates are horrible.
They're having such a horribleeffect uh on uh on outmigration.
(08:01):
Well, look at what Alaska's taxrates are doing to our to our
lowest 25%, our lowest uh 50%,and our lowest 75%.
If you want an explanation, ifyou want to understand why
Alaska has outmigration uh within in its working class, working
family, uh working age uhfamilies, if you want to
(08:24):
understand what's going on, justlook at those marginal tax
rates.
Just like California, just likewe say, California and New York
and Hawaii has other thingsgoing on, but California and New
York are driving their highincome families out of the
state.
Look at what those marginal taxrates are doing to California's
or looking to Alaska's middleincome uh families.
SPEAKER_01 (08:46):
Can you remind us, uh Brad, what these are uh
quartiles, not quintiles.
So can you remind us what whatis the, you know, give us the
ballpark of what is the low,middle, lower, middle, middle,
what what is the range there?
We're talking about 25, 50, 75.
SPEAKER_00 (09:02):
It's really interesting, Michael.
I've got I've got the sheet andit'll be in the in the Friday
column, uh, the the precisenumbers.
But even the the average incomein the upper, in the in the
bottom 75%, the average incomeamong lower, lowest, lower
middle, and upper middle, theaverage income is less than
$50,000.
(09:23):
Alaska, Alaska has a huge skewbetween the between the average
income for middle incomefamilies, low and middle income
families, and the upper 25%.
It is a huge skew.
I mean, there's this huge gapthat goes on between the two.
If you average in, excuse me, ifyou average in the top 25%, that
(09:46):
red bar would drop down to whereyou see, mostly where you see
the first red bar uh on theright-hand side, 4.9%.
That's because the averagingimpact of the income from the
from the top 20% really bringsuh the average, the average
down.
Uh but so it I I if uh my memoryis about 16,000, 17,500 maybe
(10:10):
for the low 25%, maybe in the25s, uh somewhere, 26, 27,
between 25 and 30 for the forthe lower 50 percent, the
average income for the lower 50percent.
But I'm pretty confident that Iremember the number for uh for
the the bottom 25 percent orbottom 75 percent, the uh the
(10:31):
the lower the lower and thecombined lower and and and
middle income classes is lessthan$50,000.
SPEAKER_01 (10:38):
Now, this is uh I mean this is an interesting
comparison because I mean itit's not necessarily proving
anything except for our taxrate, you know, this hidden tax
rate through the PFD cut ishighly skewed.
Uh because again, we'recomparing, you know,
billionaires to lower and middleincome and you know, or
millionaires are the wealthy,but it's indicative of what's
(10:58):
going on in the state as far asthat take uh and how it's
affecting the uh you know thelowest 75% of income earners in
the state.
So that is an interesting uhtake.
No, there's not a whole lot ofbillionaires living in Alaska,
but when you look at it and yourealize that California is not
even treating their marginalslowest 75% in the same way, you
(11:21):
realize that this is a, I mean,this is a significant, this is a
significant change for Alaska.
SPEAKER_00 (11:27):
If I were to do the marginal tax rate on our
millionaires, let's just pickmillionaires, let's not, let's
not pick on billionaires.
If I were to you do the marginaltax rate for our millionaires in
Alaska uh and put it in thecontext of those blues bars, it
would be 0.2%, 0.2% compared toAlaska's 13.3%.
(11:48):
So what you I mean, it just itjust shows that it demonstrates
the regressivity of the of theAlaska tax system of using PFD
cuts to raise uh to raiserevenues.
The the Alaska's millionaires oreven$100,000 heirs uh are paying
minuscule uh tax rates, averagetax rates, compared marginal tax
(12:09):
rates compared to those in thetop 10 states, or indeed any
state that has a progressive,has a progressive income tax.
I mean, I could put all of themout there, and Alaska would
still be the lowest.
But but what what you know, sowhile we're we're taxing our
hundred thousandaires and ourmillionaires at a very low rate,
we're taxing our middle and uhmiddle and lower income Alaska
(12:30):
families at an increasinglyupper rate, top rate.
Right.
So you can see you can see howbig that hit is by comparing it
to the marginal rates that arein the in the other states.
SPEAKER_01 (12:42):
And no, we're not talking about populations.
This is a per capita per, thisis about income, not about uh
populations.
Uh quickly here, two minutes uhuh the the flat tax is that
what's on the right here?
This is the right-hand side ofthe of the equation.
SPEAKER_00 (12:56):
Right.
So this does the flat tax, theflat tax by state.
There are 14 states that haveadopted it.
There are two more that are inprocess of adopting it, a
healthy, healthy chunk.
And it looks at the flat tax bywhat the flat tax rate is.
Um, and I'd have to blow this upto figure it out.
I don't have oh, there we go.
Idaho is the top at 5.7%.
(13:19):
Idaho and Utah, uh, both statesthat are in the Western region
and states that are booming, uhbooming state economies, have
higher uh flat tax rates thanAlaska would if we covered our
deficits through flat taxes asopposed to uh as opposed to
through uh PFD cuts.
(13:40):
The the other thing I looked at,some of these flat tax rates are
misleading because the state hasboth a flat tax and a sales tax.
And so the flat tax is lowerthan than it would be if you
were trying to recover all oftheir deficit through uh through
through just the flat tax.
So I looked at Alaska and said,okay, so what if we had a sales
(14:00):
tax and a flat tax and werecovered half our revenue, half
the deficit through the salestax, and half the revenue
through the flat tax.
What would Alaska's flat tax be?
And that that is comparable tomany of the states who in this
chart who also have sales taxes.
And Alaska's flat tax rate at2.4%, if we set it up that way,
would be the would be thelowest.
(14:22):
Hang on a second.
SPEAKER_01 (14:24):
Incoming voice calls from Lorena percent.
SPEAKER_00 (14:27):
Would be the would be the lowest uh uh uh flat tax
rate in the nation, uh if we ifwe did it the same way some
other states do.
So a flat tax, I mean, peoplesay a flat, well, we can't even
afford a flat tax.
Well, you know, look at ourregional competitors, Idaho and
Utah, they have higher flattaxes.
And our flat tax is about thesame as several several other
(14:48):
states.
And if we if we paired it with asales tax that raised part of
the revenue through a sales tax,our flat tax rate would be the
lowest in the nation.
So it's those those who go runaround claiming, oh my God, we
don't have enough of a of a taxbase, we couldn't nearly raise
enough uh through uh through uhincome taxes or through other
forms of revenue measures asopposed to PFD cuts.
(15:10):
Yeah, we can.
I mean, and and and we fit rightin in the nation in terms of in
terms of where uh we end up witha flat tax rate.
SPEAKER_01 (15:17):
Question Does the flat tax rate take into
consideration income that's nottaxed, such as the first$12,000
not being taxed?
Um I don't know if it does ornot, Brad.
SPEAKER_00 (15:28):
No, uh a lot of states don't.
A lot of states?
Yeah, go ahead.
No, a lot of states don't havedeductibles like that.
So I didn't include a deductiblelike that.
What David's talking about isthe federal income tax.
Uh not all states are are basedon the same basis as the uh as
the federal income tax.
They have different bases.
So no, that takes into accountall income.
(15:50):
The Alaska flat tax takes intoaccount all income.
And then the 2.4% rate on theright could be the result not of
using not of uh pairing it withthe sales tax, but of pairing it
with raising uh revenues throughreforming uh oil taxes.
It could be it could be pairedwith a lot of things uh that uh
that we improve POMB uh uh uhperformance, PFD performance, or
(16:14):
PFC permanent fund corporationperformance.
It could be paired with a lot ofthings, and we could we could
bring that rate down.
So it's just representative ofwhat the rates would be under
certain conditions.
SPEAKER_01 (16:24):
And Jim asks, what tax system in Alaska?
And you're talking about usingPFD cuts is a as a form of
effective, it's a tax,effectively, it's a tax.
And so that's what you'retalking about here with this, is
that it's a PFD cut.
SPEAKER_00 (16:36):
Um I there was an article.
I mean, we're we're we should bepast that point of of arguing
about whether PFDs are taxes.
There was even an article inMust Read, uh, a column in Must
Read that that that that talkedabout the PFD cuts as taxes.
So yeah, I mean that's what theyare.
That's what that's what they'vebeen throughout.
SPEAKER_01 (16:54):
Wasn't it Matt Berman from ICER that basically
said that you know, he said thatthis is effectively a tax?
You know, call it whatever youwant, but it has the same effect
as a tax.
It's effectively a tax.
SPEAKER_00 (17:03):
So yeah, it's like it's like tariffs.
I mean, at the national level,tariffs are called tariffs
instead of taxes, but they'retaxes.
I mean, they are taxes on onimports.
Um, and we just call themtariffs because they're a
specialized kind of tax.
TFD cuts are also a specializedkind of tax.
They're still a tax, they're inthe in the big umbrella of
taxes.
They divert revenue from privateprivate income over to the
(17:27):
government, withhold and divertrevenue over to the government.
That's what a tax is.
Uh and that and that's what theyare.
So, yeah, that's the that's thesystem we're talking about.
SPEAKER_01 (17:36):
It's interesting.
Um, this was again kind of a10,000-foot view.
Um, David uh uh asked early on,he said, have you considered the
benefits that the lowest 25%receive, like Snap and Free Cell
phones, Medicaid, et cetera.
But I mean, this is the10,000-foot view.
It wasn't necessarily to divedown into the details, right?
SPEAKER_00 (17:56):
Yeah, no, and and I'm taxing them.
I mean, to go back to his otherquestion about whether I
included a 12,000 deduction, Ididn't.
I taxed them, tax them, taxedthe lower 25%.
This the PFD cuts, I mean, let'slet's focus on this for a
minute.
PFD cuts tax the lowest 25%.
They tax them at a at a at ahuge marginal rate.
So, so the tax system we use,the flat tax system we used,
(18:20):
also taxes the lowest 20%, butit's a better tax for them.
It's a lower tax for them.
They save money, they they havemore income in their pockets by
substituting a flat tax for PFDcuts.
SPEAKER_01 (18:32):
Uh so well, look, I'm not a college graduate, but
I mean, even I understand thatthe the big red line, the 37%,
that 4.9% is still much lowerthan 37%.
Even I understand that, right?
I mean, so yeah, if you weretalking about a flat tax versus
uh, you know, this effect ofthis PFD tax on the marginal
(18:54):
rate, yeah, it's pretty prettyobvious that uh they would be
better off with a flat tax atthat point as well.
It would be the upper incomesthat would be screaming at that
point.
unknown (19:03):
Yeah.
SPEAKER_00 (19:04):
Because the upper but but the thing about a flat
tax that uh that I think is isis the killer argument for it is
no one pays any more thananybody else.
Yes.
The upper income proportionally.
The Alaska is a share of income.
The Alaska upper incomes wouldpay a bit more in terms of the
share of their income using aflat tax as opposed to PFD cuts,
(19:27):
but they wouldn't pay any morethan anybody else as a share of
income.
Everybody would have the sameskin in the game uh in terms of
government costs.
And as we've talked aboutbefore, I think that would
motivate the upper incomes whonow have no incentive, no
financial incentive to push backon spending.
It would motivate the upperincomes to start pushing back on
(19:48):
spending.
SPEAKER_01 (19:51):
Well, we we knew that they were gonna do it.
We knew as soon as we saw themakeup of the education task
force.
We it was confirmed when we sawthe first tranche of guest
speakers that they were going tohave at the education task
force.
And lo and behold, look at whatthey're talking about already.
They're already talking abouthow they need to increase the
(20:14):
funding.
Brad, this is all about theeducation uh task force and how
how they're looking for more.
The funding is the answer.
Funding is funding is theanswer.
What we just need is we justneed more money.
Oh, we could kill all theseother programs too.
By the way, the Alaska Reedsthing, which is actually showing
progress.
We should, you know, but themoney, we need more money.
(20:36):
We knew it was coming, and hereit is.
SPEAKER_00 (20:38):
Well, yeah, we had we had a broad range of
testifiers at last week's uh uhsecond meeting of the education
task force, the bicameraleducation task force.
Um, and it was uh it wasinteresting.
It was from STEM to stern,basically, people talking about
needing needing more money.
Very, very few ideas on how touh how to raise the additional
(21:03):
money that's needed.
AML, um uh I want to dive deeperinto this exactly what they're
proposing, but AMLA the AskAlaska Municipal League.
So just so people know what AMLis.
Right.
Uh the Alaska Municipal League,thank you, had uh had one
proposal uh that uh wasinteresting because it said,
let's take off the cap on localcontribution.
(21:25):
Let's allow local communities tocontribute more uh toward
education.
If the local communities wantmore spending in their in their
school system, let's allow themto contribute more.
Um and that would have someramifications at the state level
because it would undo the thereason we have limitations on
local spending is to fit withinfederal guidelines uh for a
(21:47):
funding a funding source thatbrings about$160,$150 million a
year, if I recall correctly,from the federal government to
the to the state government.
If we took off the spending capand allowed local governments to
spend more if they wanted to ontheir school districts, it would
increase the disparity betweenthe upper, the top spending
districts and the lower spendingdistricts, the consequence of
(22:09):
which we would no longer qualifyfor that federal funding.
Um and so it would have theimpact of taking that revenue
source uh out of the system atthe state level, although that
revenue would still go to the tothe local districts that qualify
for it.
So it wouldn't take it out ofthe state, it would just take it
out of the state level.
Um and but AML was was saying,let's undo that cap.
And for those districts who wantto spend more, let them spend
(22:31):
more.
And for those districts whodon't want to spend more, uh
that's okay as well.
That's really the only, that wasreally the only comment that was
made during the entirepresentation about funding
sources.
The rest of it was all aboutspend more, spend more, spend
more, spend more, spend more.
And and I think RepresentativeRuffridge uh did a service uh in
(22:51):
uh during the hearing when hesaid this, and I'll quote from
the the uh Anchorage Daily Newsuh uh uh comment on what
Ruffridge said.
Both Ruffridge and Senator MikeCronk, a top toke Republican
also serving on the committee,have said that education task
force discussion should beshaped by the state's fiscal
situation.
This is what Ruffridge said.
(23:12):
I think we all actually have anecessity to answer the
question (23:16):
what would be the way that you personally, the those
testifying in favor of increasedspending, what would be the way
that you personally or peoplethat you talk to, people in your
circles, would choose to fundthese additional elements?
That is, who pays?
How are we going to pay for theadditional spending these people
are talking about?
Just saying, as many did, asmany testifiers did, the
(23:40):
legislature will figure thatout.
No, we won't, Ruffridge said.
We've had that in front of usfor a long time.
This is this is exactly thesame, the flip side of all of
the testimony that's gone onover the last decade uh about
spending cuts.
Every time that that somebodywould get up in front of the
legislature and say, Oh, thesolution to all of this problem
(24:03):
is spending cuts.
Just cut spending.
When they were asked whatspending they would cut, the
response has been, oh, thelegislature will figure that
out.
You just need to cut spending.
It's not our problem where youcut spending, you need to figure
that out.
And the legislature never has.
They've just kept spending.
And now we've got we've got theflip side of that.
And fortunately, RepresentativeRuffridge, at least thus far, is
(24:23):
is is bringing it out.
We've got the flip side of thatby people in the education
committee saying, we need tospend more, we need to spend
more, we need to spend more.
And and no one saying where theheck the additional dollars are
supposed to come from or how thelegislature is supposed to raise
the additional dollars.
And representative rufferage issort of pushing back in the same
way that that those did duringthe spending cut years by
(24:44):
saying, you know, where wouldyou make the, where where would
you would you raise the revenue?
These this hearing is sort of infantasy land, if they don't, if
if if they the testifiers andand the the representatives, the
legislators on the panel, ifthey don't confront the the
where's the funding going tocome from for this additional
(25:05):
spending, if they don't addressthat additional issue.
Because everybody can say, oh,we need to spend more in this
area, we need to spend more inthis area, we need to spend more
in this area, we need to spendmore in this area.
If they don't have theresponsibility of coming forward
with where that revenue issupposed to come from, who we're
going to affect, who's going tobe hit uh by uh by that uh by
(25:26):
that increased uh spending,who's gonna fund the increased
spending, if they don't have toconfront that, there's no
there's no ceiling, there's nopushback, there's no there's no
counterbalance to to we need tospend more, we need to spend
more.
If you force, if you forcetestifiers to come in and say,
we need to spend more on X, andand I'm and and and I think we
(25:47):
should pay for it by progressiveincome tax, or we should pay for
it by deeper PFD cuts, or weshould pay for it by a flat tax,
then you're gonna get, you'regonna have some constraints on
the conversation because peopleare gonna say, oh, I don't want
to, I don't want to pay more forthat.
It's nice, it's nice in in theabsence of having to come up
(26:08):
with the with the with thefunding source.
It's nice in in the absence ofthat to say, oh, we need to have
retirement, uh defined benefitretirement, we need to have you
know more in the classrooms, weneed to have higher teacher
salaries, we need to cut down onclassroom size so we mean need
more teachers overall.
It's all nice to say that if youdon't have to confront the
constraint of where the heck themoney's gonna come from.
(26:30):
But if you have to confront thatconstraint, if you have to say,
as those who advocated spendingcuts did in the in the last
decade, if you have to say whereis it gonna come from, where are
their spending cuts going tocome from, or where's the
additional revenue is gonna comefrom, if you have to confront
that, then you then you have abalance at least between between
(26:51):
you have a constraint on on theincreased spending that you're
talking about, and people startpushing back uh on that
increased spending.
So I think he was alone in inpushing back.
Refferage was alone in thatpushback out of the out of the
what are there, eight panelmembers or so.
He was alone in that pushback,but at least he was making the
(27:12):
pushback uh on uh on that issue.
And that's an issue I think thatI hope he keeps articulating,
Senator Cronk articulates alongwith him.
Uh the only two Republicans onthe on the uh committee um on
the task force, I hope they keeppushing back on that.
Uh and I and I hope it's it's ait's an issue that starts
(27:32):
resonating uh around the stateuh as people start uh talking
about uh what therecommendations are.
SPEAKER_01 (27:39):
But again, Brad, this was not surprising.
Again, looking at the makeup andunderstanding that this was uh
this is 100%, as Kevin said,100% kabuki theater, that they
knew that they basically had anoutcome that they already
wanted, and they're looking forpolitical cover um for that uh
for that kabuki theater uh asthey go through.
And that's where we're at rightnow.
(28:00):
That the the the only answer ismore money.
And uh and but again, there isno more money.
How do how do we do that?
We had a hard, I mean, they hadto rob an account to pay for
this this snap thing, whichwe're gonna talk about in the
next segment.
They had to rob money out ofanother account because they
just don't have, you know, theydidn't have$10 million laying
(28:20):
around out of a state that's gota six billion dollar budget.
They didn't have$10 million justlaying around to try and offset
this emergency here.
And so uh, you know, where arethey gonna come up with, you
know, what another three, fourhundred million dollars for
forever uh per year forever totry if they increase that's just
(28:42):
assuming they increase the VSAby another thousand to try and
reach that eighteen hundred uhdollar mark that they were
looking at.
This is this is crazy.
SPEAKER_00 (28:51):
Uh um, you know, that this is the answer.
I I want I want people, I mean,so the assumption is they'll
come up, they'll they'll do itthrough PFD cuts, right?
I mean, there's still 650 plusor uh plus or minus million out
there in PFD.
So the assumption is they'llthey'll do it through.
I want people to have toconfront that.
I want testifiers to have to saythat we're gonna, we're we will
(29:12):
pay for it through additionalPFD cuts.
We will pay for it throughadditional, taking additional
money out of the pockets ofmiddle and lower income Alaska
families.
Notwithstanding the facteverybody on the task force is
in the top 20%, notwithstandinga lot of those pushing for
increased spending are in thetop 20%.
We will pay for it by takingmoney out of the pockets of uh
(29:34):
increased amounts of money outof the pockets of middle and
lower income Alaska families.
I want them at least to have tosay that.
Uh right.
I I do give credit to AML, andagain, I need to, the Alaska
Municipal League, I need to diginto this deeper about exactly
what they were saying.
But I do give credit to them forraising the possibility that the
local government uh would haveto actually would would would
pony up additional money if theywant, if they want additional uh
(29:58):
uh spending uh in.
Their schools.
As I said in a previous column,and we talked about previous
landmine column, and as wetalked about in a previous
segment on the show, I think wehave a huge disconnect in
Alaska.
We have the nation's lowestlocal contribution to the school
school systems.
(30:22):
Whereas in the rest of thenation, it's like 40% local, 40%
state, 20% national, federal.
In Alaska, it's like 80% stateand a minor share coming from
the local.
And as a consequence, you havethe local school districts who
are making the decisions aboutteacher contracts and making the
(30:44):
decisions about striving forclass size and all that sort of
stuff.
They're not paying for it.
When you get to the who paysquestion of saying, okay, you
want to you want more spendingin the school district?
You pay for it locally.
(31:04):
I think there's merit.
I think there's merit in that.
SPEAKER_01 (31:07):
And I want to dissect that a little bit during
the break here because, again,this is part of a the reason we
do that, and the reason thatthey limit it is because there's
federal funding attached to it,uh, and the federal funding has
conditions.
Uh, we could just stop takingthe funding, in which case we
could do whatever we wanted.
But the the thing is it's asignificant amount of money.
So we're gonna we'll we'll talkabout that here in the break.
(31:29):
But we've got number numberthree coming up, which is uh
which is a doozy.
Uh, we're gonna talk a littlebit about the snap benefits and
more.
Uh, but again, nothingsurprising.
Final thoughts here on the uh onthe education task force and
their and their and and theirpoints, uh Brad.
SPEAKER_00 (31:46):
Uh well, nothing surprising in terms of pushing
for increased spending.
Uh a little bit of a of apleasant surprise out of what
AML had to say and uh and apleasant surprise out of what
Representative Rupert Rufferichhad to say in terms of pushing
back on those calls forincreased spending without
talking about where the money'ssupposed to come from.
But but generally speaking, nosurprises.
(32:07):
Right.
Who pays, right?
SPEAKER_01 (32:08):
That's the biggest question amongst this whole
thing is who pays.
And uh only a handful of peoplein the whole legislature seem to
be asking that consistently.
So we were again, this was thiswas my question earlier or you
know, earlier on the last yearwhen we were starting to talk
about this and this cut thisconcept of you know increasing
local contributions came upbecause some people are paying
(32:30):
up to the up to the cap already.
And it's an artificial capthat's been brought on by this
uh federal money, which issupposed to fix inequity, by
basically saying people who livein their communities can't spend
more on their schools if itoutpaces smaller, less
prosperous communities, I guessI should say, uh, in their in
(32:52):
their thing.
And there's that equity moneythat comes out of that.
Uh, but you're saying that thatwouldn't necessarily matter
because the money would then godirectly to those communities
versus going through the state'shands?
I I didn't I didn't hear thatpart of it.
SPEAKER_00 (33:04):
So yeah, so so so the money is coming uh on behalf
of rural districts that havesubstantial federal presence,
substantial federal ownership uhof lands in their districts or
other substantial federalpresence uh perhaps.
Um and so it's it's coming as aresult of the of the federal
(33:26):
money uh in lieu of taxes, inlieu of property taxes that
might otherwise be paid on thefederal lands, the federal
government is contributing moneyuh to uh on behalf of those
districts.
It it's it's a little artificialbecause the money comes to the
state if the state abides by theterms and conditions of that
(33:50):
money, which is that there notbe a greater disparity than X
between the amount of fundinggoing to the to the those
districts that are not fundinguh as much as other districts
are, if the disparity is is isX.
Um and so the state has foughthard to keep that source, that
source of money coming to it.
150, 160 million dollars is myrecollection of it.
(34:12):
State's fought hard fought hardbecause it reduces what this
otherwise has to come, otherwiseis coming out of the state
coffers for the BSA.
Um if the state breached thedisparity, if the state no
longer enforced those limits uhthat are required by the federal
funding attached to the federalfunding, if the state breached
those limits and no longer hadlimits on the disparity, the
(34:35):
funds would still come.
They would just go to thosedistricts instead of being
spread statewide, as happens nowthrough state funding, they just
come directly to those districtsas they earn it, as those
districts are entitled to it, umuh uh calculated on the basis of
you know what what federallands, the sheriff's federal
lands in their districts are.
(34:57):
So it would come into the state,it would just be targeted to
those districts.
And and the concern by the stateis the reason this gets to be a
state issue is the concern bythe state is oh, we'd have to
come up with the difference thento to fund the full BSA.
I mean, basically what the statesays is here's the BSA, here's
what the federal government isis is paying.
And so we only have to take outof state funds.
(35:18):
This, if you remove the federalfunds, if the federal funds go
to those districts, then thenthe state would have to pay the
full BSA.
You know, one response is well,you could lower the BSA um in
that event down to what you'reotherwise paying, you know, with
the with the state funds.
Um but but that's that's thethat's that's what's going on.
(35:39):
And I think that works, youknow, frankly, I'm uh I'm in
favor of that, in favor of doingaway with the disparity test and
increasing the burden because itwould increase the burden on the
local school districts to pay topay their own way.
I mean, if they want if theywant great schools, if they want
low uh uh uh number of studentsper class, if they want to pay
(36:01):
teachers, you know, you know,the top dollar in the nation,
then have at it.
But fund it from your sources.
I mean, do that balance becauseyou're the one deciding what to
pay the teachers, right?
Do that balance inside your ownsources.
SPEAKER_01 (36:14):
Yeah, if you want to keep these schools open, right?
These schools that are at 50%capacity, and that's what we're
seeing, you know, all thepicketing and the protesting and
the signs and everything, keepour school open.
Well, great.
Well, now you're gonna have topay through for it through your
property taxes or whatever elseif you want to keep doing that.
And there's an actual cost.
It's not just go to Uncle Sugarand ask them for more money.
(36:37):
It's now, oh, we've got to payfor it.
And that may change theequation.
SPEAKER_00 (36:41):
Yeah.
I mean, because one of thegreatest lobbyists, one of the
most powerful sets of lobbyistsuh that comes down to Juno for
increased school fundings isface is the local school boards,
right?
I mean, we would we we need morefor Johnny, for Johnny's in our
district, for Johnny's in yourdistrict.
We need more, more for them, andwe can't do it.
So, you know, the state's theone that funds it.
(37:02):
So you need to appropriate moreuh for us.
If if we shifted the burden,shifted an increasing share, not
the total burden, but shifted anincreasing share, a material
share of the burden to the localdistricts to pay for that, then
oh my gosh, you know, if if weincrease, if we pay teachers
more, we're gonna have to payfor it.
We're gonna have to, you know,convince our constituents that
(37:23):
are electing us to the schoolboard, we're gonna have to
convince them that we did theright thing by by paying our
teachers more.
And that and the the theconstraints on spending aren't
any longer as much at the statelevel, uh, where we've found
there's no constraints.
The constraints aren't as muchas the state level as they start
showing up in the local level.
(37:43):
So I think I think AML'sproposal, they may not intend it
this way, but I think AML'sAML's proposal of doing away
with the the contribu the thethe state having the
contribution and aid, uh thefederal federal contribution and
aid, I think the the AMLproposal to do away with the
state having it has merit.
SPEAKER_01 (38:03):
Okay.
Continuing on, Brad Kiefley isour guest, the weekly top three.
We're we're already at numberthree, how how we get here so
quickly.
Uh number three for Brad is theirony of Alaska's SNAP funding.
Crisis.
Boy, irony.
Tell me it ain't so, Brad.
Tell me there's no irony whenwe're dealing with that's ironic
(38:27):
that there's never any ironywith the Alaska legislature.
SPEAKER_00 (38:31):
You know, over the last week, as the SNAP crisis
has developed, and the SNAPcrisis for supplemental
nutrition, since we're spellingout acronyms, supplemental
nutritional assistance program.
See, I actually know what it is.
Since we're uh since uh foodstamp oh, there you go, cuts of
the chase.
Since since since we're talkingabout as we as the SNAP crisis
(38:55):
has been developing over thepast week, and the crisis is
that the federal government,since it shut down the claim by
the Trump administration, hasbeen they weren't going to fund
the SNAP programs after thefirst of November, that they'd
run out of funds.
And and as a consequence,everybody was was running around
like chickens with their headcuts off, uh concern about what
would happen if the if the ifthe SNAP benefits were were cut
(39:16):
off.
Over the course of the lastweek, I've just been chuckling
as I've seen uh various uhlegislators, you know, just up
in arms about the SNAP crisisand and and about uh about you
know, oh my god, what are wegonna do?
And and how do we how do we everresolve this problem?
I've been chuckling because ofthis.
(39:37):
It's the same, the same, it'sthe same legislators who are
running around being concernedabout it as who voted for PFD
cuts.
Voted in the budget for PFDcuts.
Oh yeah.
And and so, you know, since I'mnot fun at parties because I
spend all my time, you know,fiddling with the numbers, um, I
(39:57):
went I went and started doingsome numbers.
So we have, according to theaccording to the calculations
these legislators are using, wehave 66,000 people in Alaska,
uh, individuals in Alaska who umare suddenly without uh without
any form of support and reliefbecause the federal government
is cutting stamp.
(40:18):
Right.
So I took that times the amountof the PFD cut uh this this
year, what they would havereceived in October had we
complied with the statutory PFD,those same 66,000 or most, you
know, there may be a few who whodon't qualify for PFDs, but
those same 66,000 who uh who uhare were concerned about the
(40:39):
loss of SNAP benefits, uh, anddid that uh at times the PFD
cut, which was 2600, 2675 uhplus or minus$2,675 per PFD.
If we had paid out the statutoryPFD to those 66,000 people, that
would have been 175 milliondollars.
(41:00):
175 million dollars that wouldhave hit their banking accounts
or their pockets or however theheck they receive it, uh it
would have it would have been175 million dollars that that
hit that 66,000, uh 66,000people.
The whole SNAP crisis is about$27 million per month.
(41:23):
Right, right.
And and it's not gonna be it'snot gonna be for a full year
because eventually the federalgovernment will open.
Eventually, SNAP will get fundedat the federal level.
Um, so it's it's 27 million,$27million a month for however many
months this this crisis dragson.
That's the shortfall in whateverybody's concerned about, the
(41:43):
SNAP beneficiaries notreceiving.
They're not receiving$27million.
If we had paid out the PFD tothose same 66,000 people, 66,000
people in October, they wouldhave 175 million dollars in
their pocket.
More than enough, more thanenough to offset uh the loss of
(42:04):
SNAP benefits.
What's going on here is is iscontrolled.
I mean, so the legislaturedecided, those those who are now
running around concerned aboutSNAP benefits, the legislature
decided in its infinite wisdomthat it wouldn't put$175 million
in those people's pockets.
The legislature would hold on tothat$170 million,$175 million,
(42:27):
and they would decide whatprograms, what benefits, what,
what, what, what, what, whatplaces uh that money would be
spent.
Wouldn't put it in the hands ofthe people.
We'd the legislature woulddecide that$175 million.
Counting on SNAP benefits, Isuppose, to help help you know
deal with the fact they've taken$175 million out of their out of
(42:50):
those people's pockets, countingon SNAP benefits to sort of fill
in the uh uh the the gap thatwould be created in um in their
food security.
What happened when SNAP benefitsgot cut is all of a sudden this
this this whole charade that thelegislature goes through of
taking money out of people'spockets and saying we're doing
it for your own good uh gotexposed because rather than
(43:12):
rather than you know the SNAPbenefits showing up, which the
legislature let thoselegislators rely on when they
take$175 million out of theirpockets, uh rather than rather
than the SNAP benefits showingup, all of a sudden they didn't
show up.
And so all of a sudden the$175million they took out of their
pockets makes a difference.
People are suddenly going to go,people are now going to go
(43:33):
hungry because the legislature,not as much the SNAP benefits,
but because the legislature took$175 million out of those same
people's pockets um uh in inOctober.
That's that's what's reallygoing on.
The legislature took that$175million, relying on the federal
government to contribute$27million a month.
(43:54):
The legislature took$175 millionout of their pockets, um, and
and all of a sudden the wholething got blown up.
The whole Jerry rigged house ofcards got blown up when the
federal government said, Oh,we're not gonna contribute that
$27 million.
So instead of the legislaturesaying, oops, we shouldn't have
done that, we should, we shouldgo back and and make sure they
get that, that those people getthe money that is owed them
(44:18):
under the statute, under the PFDstatute, instead of instead of
doing that, the legislature allof a sudden said, Oh, wait, we
got to come up with$27 moremillion dollars from the state
from the state government tofill to fill in that hole.
It's just, I mean, the irony ofwhat's going on here, or the
hypocrisy, or whatever the heckword anybody wants to apply to
this, the what's going on hereis just is just stupefying.
(44:39):
I mean, we got a legislaturewho's actively taking money
specified by statute to bedistributed to these people,$175
million to go to these people,actively taking money out of
their pockets, diverting itelsewhere.
Right.
And then and then all of asudden going crazy when when the
federal government doesn't comeup with$27 million uh on a on a
(45:03):
monthly basis for its share offood stamps?
Oh my gosh, man, it's a crisis.
Huge what about the$175 million?
If it's if$27 million, if taking$27 million out of their pockets
is a crisis, what about the$175million you, the legislature,
you legislators who arecomplaining about this, all of a
(45:23):
sudden concerned about SNAP?
What about the$175 million youtook out of their pockets?
Isn't that an even biggercrisis?
SPEAKER_01 (45:30):
Right.
Well, and I I went at this fromthe other direction.
Uh, you went at it from the topdown, I went at from the bottom
up, and I said, you know, 66,000people, 27 million dollars.
Okay, so what is that?
It's 410,$409 per person,essentially, of the 66,000.
So if they had gotten their fullPFD, they would have essentially
(45:52):
a backup of 10 months worth offood that they could have
purchased for themselves.
10 months worth of food.
But the legislature said, no,no, you can't have$1,500.
You can only have$1,000, youcan't have the$2,000, you can't
have the$25, you can't have the$3,700 that you would have
gotten.
We needed that to spend on X.
And like you said, now all of asudden it's a crisis because uh,
(46:15):
well, we spent the money onsomething else, which we thought
was more important.
And it turns out it's not moreimportant than people eating.
Surprise! It's not moreimportant than people eating.
It's a simple$409 a month thatthey could have had and had in
the bank and be ready to go topay for their to their for their
family's food, but they justcouldn't do it.
SPEAKER_00 (46:35):
It this is, I mean, it sort of reveals something
else, right?
It reveals that thoselegislators who vote for PFD
cuts don't trust, don't, don'tvalue, don't, aren't confident
that the recipients are going tospend the money in a way that
that benefits the recipients, Iguess.
(46:56):
Uh, that that somehow, you know,we know better, the legislature
knows better how to spend your$2,700 or$2,675.
The legislature knows better howto spend that uh than you do.
Um, and and we know better howto how to you know spend it on
your behalf uh than uh than youdo.
(47:17):
And then it gets you know,something like this happens and
it's revealed that, oh my gosh,they would have had more than
enough to to cover their covertheir food.
There's an interesting studythat I'll go back to at some
point and do a deeper dive on,but there's a study that looked
at how um uh those in the lowerincome brackets actually what at
what they actually do with PFDs.
Um, and turns out that on thewhole, they save them and then
(47:42):
they allocate them out over theyear, uh, either to pay credit
cards or to pay rent or to dothis or pay for food or or this,
that, or the other thing.
It's not they don't blow them onone-time expenses.
The people who blow them onone-time expenses are largely
those in the upper incomebrackets who don't need the
money anyway.
And so, what do we do with this?
We'll go, we'll go spend it on avacation or we'll go spend it on
(48:04):
something else.
Those in the lower incomebrackets, the ones the
legislature isn't trusting, thethe ones the legislature says
you have to do it through foodstamps, you can only get your
money through food stamps, thosepeople are actually saving the
money and would have had thatmoney in their in their savings
accounts to be able to pay forfood.
StreamYard crashed.
SPEAKER_01 (48:19):
I still had internet, but stream yard
crashed out.
Uh, but how ironic, Brad.
I was just saying before I gotso rudely interrupted, that uh,
you know, how ironic that theseare the people we know that we
know how to spend your moneyuntil we don't, but then trust
us for more.
This is the I mean, that'sthat's it.
That that's the that's the wholething there, right?
SPEAKER_00 (48:38):
I mean, that's that's why that's why the PFD is
so important.
You you you it is it isAlaskan's in Alaskan's
individual share of theircommonly held wealth, it is
their dividend from theircommonly held wealth.
They ought to be trusted to knowhow to spend it.
And if you've got a few badapples, you know, like like
everybody wants to, you know,use the example of the snow
(49:01):
machines or whatever the heck,you know, people that that
one-time spending that thatpeople do that they use as the
example of how you why you can'ttrust these people.
If if if you got a few peoplewho do that, okay, that's fine.
But what you're doing is you'repunishing, punishing the
remainder, the ones who go outand save that money and use that
money and spread it out over theyear and use it for basic
(49:22):
necessities and use it to have acushion if something happens
like uh like you know, snap,snap is cut off.
What you're doing is you'repunishing those people by take
by taking their money away.
And this the whole snap debaclejust exposes that for what it
is.
You know, we know better how tospend your money up until you
know some government programthat we're depending upon goes
(49:43):
away.
Then turns out we didn't knowhow to better spend your money.
SPEAKER_01 (49:47):
Exactly.
Well, and that's the thing.
I mean, this is the wholeplanned economy, planned this,
planned that.
And it turns out thatbureaucracies and politicians
don't know better than theaverage person or the free
market in how to make thesethings work the best.
And that's part of the problem,100% for sure.
And there's like you said,there's it's hypocrisy.
It's a combination of it's it'sironic, it's hip, it's hip
(50:12):
irony.
It's hypocrisy and irony boiledtogether into an utter stew of
of badness.
So it's crazy.
Uh, all right, Brad.
Well, everybody wants to knowwhat Brad's doing.
Where are you at?
What are you doing?
What are you listening to?
SPEAKER_00 (50:24):
Where are you going?
It's music.
I'm in Seattle.
Uh, I'm going to a concerttonight.
Uh, it's a doubleheader of aScottish band that I love and a
U.S.
Irish music band uh that I loveuh at uh the triple door.
Some will know the venue inSeattle.
And uh so I'm in Seattle tofollowing the music to uh to go
to a concert.
SPEAKER_01 (50:44):
The Pied Piper of Music draws Brad all over the
world.
And what are you gonna do?
It's the only thing that he isfun at parties, contrary to our
commentary here on the program.
It's just the musical partiesthat he likes to go to.
Yeah, there you go.
There you go.
That's what it is.
He doesn't like those bigcocktail parties with all the
politicians.
He'd rather go to a musicfestival.
And I can't say I blame him.
SPEAKER_00 (51:05):
They they certainly don't like me at those cocktail
parties.
Because I asked them questions.
Oops, no, we don't want toanswer that question.
SPEAKER_01 (51:13):
No, yeah, we'd we'd like to ask them questions,
Brad.
And uh, you know, I'd love tosee you on the other side of the
microphone in front of some ofthese Senate committees and and
House committees because how howdo they answer the questions?
They just the problem is thatthey can't, they can't actually
answer the questions andarticulate an answer, and that's
(51:34):
that's the hypocrisy you'repointing out here, and I think
it's great.
Um, so it's uh it's good to haveyou on.
Anyway, thanks for covering forme for the minute there that I
was going.
Like, I'm like, oh well, Brad'sgot it.
Don't worry.
It looks like Brad's still on.
It'll be fine.
Brad's there.
SPEAKER_00 (51:51):
I don't know what Brad was saying, oh, Michael's
gone.
I don't know what to do now.
SPEAKER_01 (51:56):
Well, just just uh Phil, fill, fill.
You're you you've done the radiolong enough, you know what to
do.
So all right.
Well, Brad, thank you.
Um thank you for coming onboard, my friend.
I hope you enjoy your musicalinterlude, and we look forward
to talking to you again nextweek.
SPEAKER_00 (52:09):
Michael, as always, thanks for having me.
Well, that's a wrap for anotherweek's edition of the weekly top
three from Alaskans forSustainable Budgets.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
SoundCloud, Spotify, andSubstack pages.
And keep track of us during theweek on Facebook and Twitter.
This has been Brad Keithley,Managing Director of Alaskans
(52:32):
for Sustainable Budgets.
We look forward to you joiningus again next week on the weekly
top three.
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