April 16, 2025 • 56 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 April 14, 2025.
This week, our top 3 issues are these: 1) we explain the difference between an accounting balanced budget and a distributionally balanced budget and why the Legislature is continually failing to produce the latter (2:06); 2) we discuss former Sen. Joe Paskvan’s excellent op-ed in a recent Fairbanks Daily News-Miner attacking the Permanent Fund Corporation’s proposed backdoor raid on the Permanent Fund corpus (21:40); and 3) for those interested, we do a Michael Dukes Show “Finer Things” segment on my recent Ireland trip (38:01).
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 1 (00:10):
Hi, this is Brad Keithley, managing Director of
Alaskans for Sustainable Budgets.
Welcome to the weekly top threethe top three things on our
mind here at Alaskans forSustainable Budgets for the week
of April 14th 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 six to 8.
Am.
I joined Michael weekly in thefirst hour of Tuesday show from
six 10 to 7.
Am For a discussion between thetwo of us about our three
issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:53):
soundcloud, spotify and Substackpages, also on the Alaskans for
Sustainable Budgets website, aswell as the projects page on
national blog site mediumcom.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that, in additionto these podcasts during the
(01:13):
week, 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
Twitter.
This week, our top three issuesare these First, we explain the
difference between an accountingbalanced budget and a
(01:36):
distributionally balanced budgetand why the legislature is
continually failing to producethe latter.
Second, we discuss formerSenator Joe Paskvan's recent
op-ed in the Fairbanks DailyNews Minor attacking the
Permanent Fund Corporation'sproposed backdoor raid on the
Permanent Fund Corpus.
And third, for those interested, we do a Michael Duke Show
(01:59):
finer things segment on myrecent trip to Ireland.
And now let's join Michael.
Speaker 2 (02:06):
So the weekly top three we've got some good stuff.
We're saving that for savingthat for the end.
Number three, we're going totalk about a little bit about
your trip to Ireland and all thefun stuff.
We'll have a mini top threeinside the top three.
But before we get to that let'syou know I hate to do it, but
we've got to talk about it.
There's been a lot that's goneon, uh, over the last couple of
(02:31):
weeks while you've been gone,and there's going to be a lot
more coming up in the next twoweeks.
I mean we have seen somechicanery, we've seen some, uh,
some deceptions and some fifthdimensional chess moves and you
night, late night things andeverything else.
But this balanced budget thingthat we keep talking about, I
(02:52):
mean they keep using that wordbut I don't think it means what
they think it means.
Give me the rundown here.
The number one is the balancedbudget that they keep talking
about.
Is it really, brad?
Is it really?
Speaker 1 (03:07):
Well, michael, it's funny, over the two weeks I'm
not sure anything's changed allthat much.
When I left, we were talkingabout the budget that was in
house finance.
When I come back, we're talkingabout the budget that's just
barely made it out of housefinance and onto the floor.
So I got rested over the twoweeks.
I'm not sure about anybody else.
(03:28):
So we're going to hear a lotthis week and next and maybe the
week following that, maybe theweek following that maybe into a
special session.
We're going to hear a lot oftalk about a balanced budget and
achieving a balanced budget,that that is the goal of
everybody to achieve a balancedbudget.
And what I want to talk aboutis there's really two balances.
(03:51):
When you talk about fiscalpolicy, there's two balanced
budgets.
One is an accounting balance,where revenues equal spending or
spending equal revenues, whereyou have an accounting balance
across the top.
But there's also, when fiscalpolicy experts talk about a
balanced budget, they're alsotalking about a distributionally
balanced budget.
(04:11):
That is, that the contributionstoward the budget and the
distributions out of the budgetare roughly equal.
That no one bracket incomebracket or no one industry or no
one.
That no one bracket incomebracket or no one industry, or
no one segment of industry istaking a bigger hit than any
other.
They're all contributing in afashion that is distributionally
(04:40):
balanced.
What we're going to hear overthe next couple of weeks or
three weeks is we're going tohear a lot of talk about
accounting balance.
We're going to hear a lot oftalk about, at the top level,
spending equaling revenues orrevenues equaling spending, and
I'm not sure they're even goingto achieve that.
If you look at the numbers thatare in the House Finance
version, if you look at thenumbers that are being talked
(05:02):
about on the floor, if you lookat the amendments that are on
the floor thus far, we have moreamendments to go, but if you
look at the amendments on thefloor, I'm not sure.
And also, at the same time,look at where FY26 revenues are
going.
With the oil price slide, I'mnot sure that we're even going
to achieve an accounting balancebudget.
(05:24):
People talk about dipping intothe CBR to balance this year's
budget because we're having aslide in revenues and there's
been additional spending addedon top in terms of the
supplementals.
And now people are talkingabout dipping into the CBR to
balance next year's budget, theFY26 budget, because of the
(05:44):
slide, ostensibly because of theslide in oil revenues.
It's a combination of beingunable to control spending and
the slide in revenues.
But we're going to have a lotof discussion about that
accounting balance and I suspectthat the majority in the House
and the majority in the Senateare going to claim victory if
(06:06):
they come close to thataccounting balance spending
equaling revenues.
But that's not the only balancethat's important.
When fiscal policy people talkabout balanced budgets, they're
also talking aboutdistributional imbalance and
we've already given up on that.
The amendment Friday night tosignificantly cut the PFD below
(06:37):
the statutory levels andtransfer the remainder, transfer
that difference, the cut, tothe general fund essentially tax
middle and lower income Alaskafamilies and transfer that
difference to the general fundensures virtually ensures that
there's not going to be adistributional balance.
Everybody talks aboutdistribution.
They don't say they're talkingabout distributional balance.
(06:58):
But everybody talks aboutdistributional balance.
When the oil industry says, oh,you can't increase revenues
from us because it will affectour industry, they're talking
about distributional balance.
They're talking about you can'ttake more from us because it
will affect our business and itwill cause us to have adverse
(07:19):
consequences in our business.
That's a discussion aboutdistributional balance.
When people say oh, you can'thave taxes, you can't have sales
taxes or income taxes becausethat would take from Alaska
families separate.
Apart from the fact that PFD istaking from Alaska families,
the PFD cuts are taking fromAlaska families.
They're talking aboutdistributional balance.
(07:39):
And so I think it would beuseful if we sort of fessed up
in this discussion that we'regoing to have and admit that
we're talking aboutdistributional balance and focus
on distributional balance as anissue.
When the oil companies say theycan't afford any more, dig into
that.
Can the oil companies affordmore?
(08:01):
They can't, and we've talked toyou on the show a lot about the
economics of the oil industry.
We've talked on the show aboutthe revenue you take from the
oil industry and they can'tafford more.
When we talk about sales taxesand income taxes, we're talking
about really a distributionalbalance affecting Alaska
(08:22):
families, but we're also talkingabout a distributional
affecting non-residents.
We don't take fromnon-residents.
Currently Non-residents get off,as Governor Hammond put it at
one point, scot-free.
They don't have to contributeto the cost of government in
Alaska, unlike in the 49 otherstates and the District of
Columbia.
Non-residents in Alaska,tourists, non-resident employees
(08:44):
, don't have to contribute tothe cost of Columbia,
non-residents.
In Alaska, tourists,non-resident employees don't
have to contribute to the costof government and the result of
that is a shift.
The share they would otherwisepay over to residents increase
the burden on residents ofAlaska.
So we would gain a lot, I think,if we would just confront the
(09:08):
fact that we're talking aboutdistributional balance when
we're talking about these issuesand try to develop a budget and
work to develop the budget andset as a goal of a budget that
not only is accounting balancein the sense that revenues equal
spending, but also in terms ofdistributional balance, that
(09:31):
we're spreading the burden ofwho pays for the costs of
government in a balanced manneracross all categories, including
industry, including oil,including non-residents and
including residents and withinresidents, looking at finding a
(09:51):
way to distribute the burdenthat we're going to shift to
Alaska families.
Finding a way to shift thatburden in a way that's balanced
across Alaska families, asopposed to the way we're doing
it now with PFD cuts, pushingthat burden almost entirely on
the middle and lower incomeAlaska families and letting the
top 20% escape from sharing anyof the costs of that burden.
(10:14):
So, as we have this discussionover the next two weeks and as
people in the legislature talkabout oh, we got to achieve a
balanced budget.
People in the legislature talkabout oh, we got to achieve a
balanced budget.
It's in two ways it's in.
(10:35):
One is an accounting balanceacross from spending and
revenues, to spending andrevenues equal out.
But also it's distributionalbalance that takes from all
categories, uh on a in a in abalanced fashion and make sure
everyone is contributing in away that is balanced, uh, across
across the whole spectrum.
And right now we don't have it.
Um, I would love to give areward to the first person who
(11:00):
would go on the, on the housefloor, on the Senate floor, and
talk about a distributionallybalanced budget, who would go on
the House floor or on theSenate floor and talk about a
distributionally balanced budget, because I think it would
elevate the discussion in a hugeway from where we've been.
Speaker 2 (11:14):
Well, good luck with that.
I mean, we watched NellieJimmy's speech about this
impassioned speech about thepeople and how they're affected
and everything else, uh, youknow, by pfd cuts and how it
drives people her people intopoverty and all this other kind
of stuff uh, really tearful.
And then it was all and at theend she was like and to save you
(11:35):
, I'm going to cut the pfd.
Wait, you just spent fiveminutes telling us why this was
horrible for people.
You're, and now you're gonna.
I mean it, it makes no sense.
Speaker 1 (11:47):
Brad, that was a great opportunity to talk about
distributional balance.
That was a great opportunity tosay look, you're taking it out
of, out of my constituents,you're taking it out of middle
and lower income Alaska familiesin my district, you're taking
it out of subsistence, you'retaking it out of elders.
It's a great opportunity to sayand we need to finish that off
by saying and we need balanceacross all categories of Alaska
(12:15):
industry and people incontributing to this budget.
Great opportunity.
She set it up perfectly to dothat and then she just gave up
on it.
I mean, she backed off and saidoh no, we've got to, we've got
to spend instead of instead offocusing, instead of focusing on
.
It was a great, it was a greatsetup, I mean absolutely great
setup.
Speaker 2 (12:34):
It was a great.
I mean, it was completelybipolar.
At some point You're like allthese bad things about taking
the PFD and to save you I haveto take the PFD.
I mean, it is the prime exampleof we know better than you how
to spend your money.
Speaker 1 (12:48):
Yeah, it's a combination.
What's going on?
The Senate, or the Housemajority, rather sold their soul
to Chuck Kopp To get Chuck Koppto come over and give them a
one vote majority.
What Kopp insisted on was notaxes on the oil companies and
no taxes, no personal taxes inthe form of income or sales
(13:11):
taxes, and that's.
I mean that's what's gone on,and COP is.
There was a press conference aweek ago, a couple of weeks ago,
it's all blurring in my mindbut where Kopp said something to
the effect of I would havejoined the minority, I would
have made the minority amajority if they just would have
(13:33):
agreed to a balanced budget.
And what he meant by that wasthe accounting balanced budget.
He certainly didn't mean thedistributionally balanced budget
, right, but I joined themajority.
I joined the current majority.
I joined Bryce and the othersbecause they promised me he
didn't say this, but if you readbetween the lines and look at
(13:53):
his votes and look at the votesalong the way, because they
promised me that they would nottax all companies and they would
not have a personal tax otherthan PFD cuts tax.
They would not have a personaltax other than PFD cuts.
And so what they got.
What the majority got was copsvote to spend.
(14:15):
But they gave up any effort,any votes, to get distributional
balance.
Nellie Jimmy should have.
Well, she should have called aspade a spade and said look,
this is what's going on.
You know we need distributionalbalance.
This is why we needdistributional balance.
This is who's being affected byhaving distributional imbalance
(14:35):
.
This is the consequences ofdistributional imbalance.
We need to have distributionalbalance and I urge my colleagues
to work on distributionalbalance.
But she didn't.
She adhered to the party linethat Bryce and Kopp had set up.
Speaker 2 (14:50):
Well, even even Neil Foster didn't talk about this,
even though he voted against it.
It's the same guy I mean.
This is it's again.
I'm not holding my breathbecause I don't think they're
going to talk about that.
They don't because it wouldtake away their ability to spend
.
That's the whole thing.
They again.
This is a symptom of thepolitician's disease.
And if we did talk about someof those distributional things
(15:12):
again, without that spending cap, they're just going to spend it
anyway.
So it's kind of where we're atright now.
Final thoughts on this Brad,we've got a break here.
Speaker 1 (15:22):
Well, they're going to spend it anyway.
But at least the cost of itwould be distributionally more
balanced than what we have itnow.
At least the top 20%, at leastthe oil companies, at least the
non-residents would contributeto the cost and that would
reduce the burden on Alaskafamilies.
(15:43):
Having the oil companiescontribute more, having
non-residents contribute more,would reduce the burden on on
alaska families.
Having the oil companiescontribute more, having
non-residents contribute more,would reduce the burden on on
alaska they, they want to talkabout it, they, they, I mean
they want to.
Speaker 2 (15:54):
they they're well, they don't care about
distributionally, they don'tcare about it, but they want to
talk about it.
That press conference thatyou're referring to, where cop
told that which, by the way,turns out may not have been true
I mean, I'm just you know, hesaid he had a conversation but
turns out that may not have beentrue Was the same one where
Josephson said the quiet partout loud.
But we don't yet live in aworld where the Alaska people
(16:17):
are ready for themselves toinvest in their state government
.
Speaker 1 (16:23):
Yeah, but they do.
I mean, that's the fallacy ofall this they do through PFD
cuts.
We're reducing the income ofmiddle and lower income Alaska
families to increase spending.
Speaker 2 (16:34):
You and I know that, but see, they're not treating it
like that.
See, they're saying the quietpart out loud.
We need people to invest intheir own state.
Remember I said what did I tellyou?
You guys need to pay your fairshare.
That's what he's saying there.
You guys need to pay your way,and this is where we're at right
now, brad, you're talking.
this is pie in the sky, baby.
(16:54):
I mean, you're talking aboutthese people actually wanting to
talk about distributionalfairness between who's paying
and everything else.
It's all about protecting whothey're protecting and, most
importantly, because they wouldthrow their top 20% donors under
the bus in a hot second if theythought they could get away
with it, just so that they couldprotect their spend.
(17:16):
That's what this is all about,right?
I mean, this is already whatthis is all about.
Speaker 1 (17:21):
Yeah, I understand that.
But here, keep this in mind.
Keep this in mind If we haddistributional balance, if we
had the oil companies payingwhat they're supposed to pay
under the Constitution, if wehad the top 20% contributing, if
we had non-residentscontributing, we might spend
more, but the share of that andthe burden on Alaska families
(17:43):
would be less because of thecontribution coming from
non-residents, which is about15% of revenues, could be about
15% of revenues because of thecontribution coming from
non-residents, because of thecontribution coming from the oil
companies, because of thecontribution coming from other
industries.
We might be spending more, butthe burden on Alaska families,
(18:07):
which is what we really shouldbe focused on, would be less
because we have thesecontributions coming from from
the other segments.
So it's you've got.
We need to keep in mind.
We need to keep the focus onwhat Alaska families are paying,
as opposed to what the overallspend is.
(18:27):
The overall spend is important,but even more important is what
the burden is that you'reshifting to Alaska families.
Speaker 2 (18:36):
Well, again, my fear is and I mean, I see what you're
saying, I understand whatyou're saying intellectually,
but my fear is, if we did getmore oil taxes and we did start
taxing outside interests youknow, tourists and out of state
employees, et cetera, et ceterataxing outside interests, you
know tourists and out of stateemployees, et cetera, et cetera
(18:59):
they already know what we, whatthey're willing to take from us,
so they would just expand it towhat we were already paying
before and take all thatadditional money and spend it.
This is the danger and whileI'm I'm happy to talk about you
know, we need to talk about thetaxes and the different types of
taxation, the fear, my fear hasalways been, is that that
spending will expand to consumeall the available money.
Speaker 1 (19:17):
But think of what you're, but also think about
what you're picking up.
All of a sudden, you're pickingup the old companies, pushing
back on spending because they'rehaving to pay a share of the
increased spending.
You're picking up the top 20%,pushing back on spending because
they're having to pay a shareof the spending.
You're picking up thenon-resident industries tourism
and fish pushing back onspending because they're having
(19:38):
to pay a share of the spending.
So the dynamics are shifting.
Yes, you may have a slightincrease in the overall spend,
but you're picking up a lot ofopposition to that overall spend
by allocating a portion of itto the additional segments and
you're collapsing or you'rereducing the share that Alaska
(20:01):
families have to contributebecause you're bringing in
contributions from non-residents, from the oil companies and
from other industries, andyou're right.
Speaker 2 (20:10):
I just don't know if the pressure is great enough to
hold down the spending.
And that's that's the biggestpart of the problem.
Rob Meyer says investingimplies we're happy with our
return.
Well, but I mean some peopleare.
We saw that meeting inAnchorage.
I mean tax me, tax me harder,daddy, right, I mean that's what
they want.
They there's, there's, there'sa group in there that's like
just tax it, give it all to thegovernment.
(20:31):
They know better than us how tospend that money.
So there's a whole group outthere that believe that.
And you know.
And of course now, like I said,with them saying the quiet part
out loud, we're on the verge,brad.
I mean, you know, do you thinkwe're going to see taxes?
Right, I mean I think we're inagreement, we're going to see
(20:53):
taxes in one form or another.
Now that people like Josephsonand others are saying that more
and more.
That's not the first time it'sbeen mentioned in the last eight
months and I think it's justgoing to continue.
I think that's the new refrain.
Speaker 1 (21:06):
Yeah, but the focus I mean as we enter that era we
need to keep the focus ondistributional balance to make
sure that the beneficiaries ofthe contributions by the
additional, to make sure thatthe additional segments can
contribute to that spending andmake sure that the share being
(21:26):
borne by Alaska families is atleast held constant, if not
reduced, as a result of theadditional shares coming in from
other segments.
Speaker 2 (21:34):
Well, like I said, I'm not going to hold my breath,
because that's how yousuffocate, that's how it happens
.
Right there, brad Keithley,alaska's Four Sustainable
Budgets, the weekly top three.
I'm looking forward to numberthree, number two I'm looking
forward to number three.
I mean, you know, while Bradwas gone, apparently hell froze
over because Joe Pascovan wrotean opinion piece that Brad
(21:56):
Keithley actually agrees with,which is unusual.
I know there's been a littlebit of a tete-a-tete between
Brad and Joe on this.
Joe wrote a piece talking aboutthe permanent fund and the
earnings reserve and theprinciple of the fund and
everything else.
And, my golly, you guysactually agree on something,
brad.
Speaker 1 (22:15):
Yeah, I'm not sure I've ever agreed with Joe before
.
I mean, usually Joe's op-edsare about oil taxes and while
you and I talk about that,there's a justification and a
need for additional oil taxes.
Joe sort of goes to the extreme.
Additional oil taxes Joe sortof goes to the extreme of that
(22:35):
and I think, goes beyond what'sa balanced approach with respect
to the oil companies.
But this op-ed was on somethingdifferent.
This op-ed was on the permanentfund corporation's proposal
that's currently before thelegislature to combine the
earnings reserve and thepermanent fund corpus.
We've talked about it on theshow before.
I oppose it because to me it'sopening a backdoor.
(22:56):
Well, to a lot of people.
It's opening a backdoor intothe corpus.
It allows the permanent fundcorporation to draw, to take a
5% draw, even if they're notearning a five percent draw, and
that additional amount beyondwhat they're earning, between
what they're earning and thefive percent draw, would come
(23:18):
from the corpus, and thisproposed constitutional
amendment opens that door andallows them to do it.
There's also some otherincentive issues with that.
The Permanent Fund Corporationreally wouldn't care anymore
about its performance becauseit's going to generate 5% with
this combination consolidation.
It's going to generate 5%regardless of what it does.
(23:41):
If it produces a 1% return, 2%return, 3% return, they're still
going to take 5% by drawing theadditional amount out of out of
the corpus.
To my somewhat to my surprise,pascavan, in an op-ed in the in
the Fairbanks News Minor, agreeswith that.
This is what he said theproposed constitutional change
converts the currenttwo-component system to a
(24:03):
single-component system.
The 5% POMB would be withdrawnfrom this single-component
system Because that amountbecomes spendable.
The permanent fund can be spentdown to nothing.
The word permanent is gone.
Risks to maintaining safety ofprinciple arise.
Consider this question, and Ithink this is a perfect setup
(24:24):
for it.
If the 5% withdrawal rate forthe current POMV is a factor in
fully depleting the ERA, that is, the ERA is being depleted
because we're taking 5% eventhough the permanent fund
corporation isn't generating a5% return.
Isn't it obvious that ifconstitutional protection of the
principal is removed, a 5%withdrawal rate from the single
(24:46):
component permanent fund can andwill deplete the principal?
The answer is yes, of course.
Removing constitutionalprotection of the principal
destroys safety of principle.
Permanent becomes impermanent,and Joe's got that issue exactly
right.
What we're doing with thisproposed constitutional
amendment that's currentlybefore the legislature, that's
(25:07):
being pushed by the PermanentFund Corporation.
The current Permanent FundCorporation is opening a back
door into the principal andallowing the permanent fund
corporation and the legislatureto get in and take from the
principal whenever it needs itto make up the difference
between what the permanent fundcorporation is actually earning
(25:28):
and 5%.
Here's the fundamental problemthat's going on.
That's causing this issue.
The permanent fund corporationis not earning what it should.
5% isn't a bad standard interms of withdrawal, but the
permanent fund corporation hasbecome so risk-averse, so
(25:56):
protective in its investmentpolicy, that it isn't earning
the 5%.
If you look at the S&P, if youlook at other standards of
earnings, they're all well inexcess of the 5%.
The permanent fund has becomepermanent fund corporation which
(26:17):
manages the permanent fund hasbecome so tied up in its efforts
to become risk averse that it'sreduced the earnings of the
permanent fund on the Alaskapermanent fund below that 5%
standard.
That's the problem.
The problem is the way in whichthe Permanent Fund Corporation
(26:38):
is managing its investments.
The problem is they aren'tearning enough on the
investments Secondary to that.
They're spending a hell of alot of money not to earn very
much.
I mean they're spending almosta percent of the annual earnings
on management fees andconsultants fees to advise them
(26:58):
on how to do this complicatedinvestment approach.
So they're not only not earning5% on return, they're reducing
what they are earning by apercent to pay all of the
management and consulting fees.
That's the problem and they'retrying to get out of there
rather than address that problem.
(27:19):
Rather than address the factthat they're not earning what
they should, they're notpursuing investment policies,
that they're spending way theheck too much in order to
produce those inadequate returns.
Rather than address thosefundamental issues, they're
trying to backdoor it by sayingwell, you know, if we don't
(27:42):
produce 5%, we'll just go intothe principal.
We'll just open this backdoorinto the principal and keep
generating, keep giving you a 5%return over time.
Generating, keep giving you a5% return over time.
We need, instead of thisconstitutional amendment,
instead of consolidating the twoaccounts, instead of opening
this back door into thepermanent fund principle, we
(28:03):
need to focus on the legislature, needs to focus on the core of
the problem, which is thepermanent fund corporation is
not producing the type ofreturns it should and it's
spending way the heck too muchto produce those inadequate
returns.
We need to focus on thepermanent fund corporation and
on its performance, rather thanpermitting them and permitting
(28:25):
the state to open this back doorso that they can begin to drain
the permanent fund corpus whenthey don't have the type of
returns they should.
Speaker 2 (28:32):
It's the next step, right?
I mean, this is the nextlogical step because they don't.
You know they're going to intheir whole appetite for spend.
The next logical step is accessto the corpus, because it kicks
a can down the road, preventsthem from having to talk more
about taxes, and this is why theRepublicans will get on board
with this, because they don'twant cuts.
(28:54):
Willie Keppel just mentionedthat again, there was an
amendment yesterday to removesix positions that haven't been
filled in two or three years andit failed on a party line vote.
It would have saved a millionbucks and they said no, I mean
cuts.
We all think, we all know thatcuts would work.
But again, that's just moreproof right there that we're
(29:15):
never going to get there at thisrate.
With a group of people we havedown there now, because they're
not going to cut anything, it'stoo easy to gather more revenue,
to steal from the PFD, tocombine the PFD and go to the
corpus.
This is the direction they'regoing.
Speaker 1 (29:32):
Yeah, you and I have talked on the show probably
since the mid-20-teens aboutwhere do they go next after they
drain the SBR, the CBR, andonce they started into the
permanent fund dividend, wheredo they go next?
And the question was whetherthey go to taxes or the question
was whether they go to thepermanent fund corpus.
And what this is doing.
What SJR 14, I think it is isdoing is opening the door to the
(29:58):
permanent fund corpus to allowthem to start taking from the
permanent fund corpus, eventhough the permanent fund is
generating less in earnings thanwhat they're taking out.
So it's a bad, bad policy thatthey're wrapping up as, oh, it's
necessary to make the permanentfund permanent.
(30:19):
It's not.
It's necessary.
What they're doing is trying tomake the permanent fund
impermanent by allowing them tohave a backdoor into the corpus.
And Joe Pascovan has it exactlyright.
If SJR 14 gets out of thelegislature, it's going to have
to be voted on by the peoplebecause it's a constitutional
(30:39):
amendment to the constitutionalprovisions that currently set up
the two-account system for thepermanent fund, and it's going
to be interesting.
I hope it doesn't get out ofthe legislature.
I hope that they don't get thesuper majorities that are
required to pass theconstitutional amendment out of
the legislature.
I hope the Senate Republicans,for one group, stand up against
(31:01):
it.
I hope the House majority orHouse minority rather stands up
against it.
Calling it what it is a raid onthe permanent fund.
But if it gets out of thelegislature it's going to go for
a popular vote and it's goingto be interesting to see the
division between those who,excuse me, are lining up to raid
the permanent fund to keep thespend going, to keep the
(31:22):
revenues going, as opposed tothose who really do want to keep
the permanent fund permanent.
Speaker 2 (31:27):
Yeah, no, it's the next step.
It's the next logical step intheir progression to basically
consume everything in sight.
That's essentially what itcomes down to.
All right, brad, we're up tothe end here of this segment.
Any final thoughts before wemove on to more happy times.
Speaker 1 (31:49):
Yeah, I guess the one thought is this is not a
partisan issue.
This is do you understandnumbers issue, do you understand
what's going on and whatthey're trying to do?
Issue.
It's not a Democrat issue.
I mean Paskavan's proving it'snot a Democrat issue.
Republican issue it's do youunderstand numbers and do you
understand the effect of SJ-14issue.
(32:12):
And that's encouraging thatit's not a partisan issue.
But then you start to wonderabout how many legislators
really do understand accounting.
So it's, it's the.
The important point I think outof this is it's not a partisan
issue, it's a.
It's a are we going to protectthe permanent fund or not?
Speaker 2 (32:29):
issue rob says.
Here's his prediction SGR 14might pass the Senate, but it
won't pass the House.
I mean, I just cannot evenfathom why somebody in the
Senate who is ostensibly afiscal conservative would look
at this and think that's a goodidea.
(32:49):
This is a good idea.
Um, you know, I I just I can'teven understand, but I mean what
Willie was talking aboutyesterday.
Uh, that amendment to removesix positions that haven't been
filled in two years, um, uh, isjust is part of our problem.
For some people who are sayingwe should just just focus on the
(33:11):
cuts, I agree that would be theultimate way to fix the problem
that we have is to just focuson the cuts.
The problem is we bring up asimple line to remove six
positions, to cut just a millionto a million.
That's pocket change.
A million dollars, that's's itOut of a $6 billion budget a
million dollars.
(33:31):
And they voted down Dude, thereis no.
We have to acknowledge that atsome point.
Tilting at windmills doesnothing but break your lance and
hurt your horse, right?
I mean, that's where we're atright now.
Speaker 1 (33:47):
And as they continue to spend without having a
distributionally balancedapproach, as they continue to
spend it, it's all coming out ofthe PFD, they're taking it out
of the, out of the permanentfund dividend, they're taking it
out of the pockets of middleand lower income Alaska families
.
So it's got to be.
I mean, I think the incentiveschange.
I think if we havedistributional balance, if the
(34:10):
oil companies have to contributemore responding to increased
spending, if the top 20% have tocontribute, if the non-resident
industries tourism and fish andothers have to contribute to
respond to additional spending,I think the dynamics change.
(34:31):
I think the incentives change.
I think the pushback onspending starts to have an
effect.
But right now there's not thateffect.
I mean, right now it's okay,we're going to spend a little
bit more.
It's going to come out of thePFD.
We've managed to take it out oftheir pockets before.
We'll just take a little bitmore and a little bit more and a
little bit more.
We'll take it down to athousand.
We'll tell them that's good,even though a thousand is like
(34:53):
8713, the split between the POMVsplit at a thousand dollars is
8713.
Then we'll take it down to 900.
Then we'll take it down to 800.
That's what's going on.
We have to broaden the basethat's pushing back.
We have to change theincentives to broaden the base
that's pushing back and if we dothat, if we have a
(35:15):
distributional balance, wereduce the burden on Alaska
families by having a significantshare of the burden borne by
non-residents, an increasedshare of the burden borne by the
oil, and that's, I think thathas the effect of improving life
for middle and lower incomealaska families and it has the
(35:36):
effect of increasing thepushback on spending frank asked
the question.
Speaker 2 (35:42):
This is the million dollar question how do we change
the mindset in the legislature?
Then?
It's a great question, frank.
Frank, I wish I knew.
I mean, we've been talkingabout it for 10, 12 years now on
this program with Brad.
How do we change the mindset inthe legislature?
I don't know.
I mean, we had legislators onthe program where we'd ask them
(36:02):
back in the late mid-20 teenswill you follow the ICER example
where they said you couldn'tspend over $3.9 billion?
And they said yes, and then itwas $4 billion and they said yes
, and then it was $4.1 billionand they said yes.
And what do they do?
They just keep blowing past it.
I don't know, frank.
I wish I had the answer.
(36:24):
You know the answer is yes, weneed a mindset of trimming
government.
The problem is nobody in thereis doing it and the few that are
trying to do it and theholdouts they're holding against
the tide.
That's all they're doing.
Again, this is like one ofthose all-consuming things that
(36:44):
just sucks up everything in theroom and you could scream and
shout and wave your hands allyou want, and it's still coming
for you, baby.
That's what's happening rightnow.
How do we fix it.
I don't know, maybe we let thewhole thing go, just flow apart.
I don't.
I have no idea at this point.
Speaker 1 (36:57):
Well, one of the ways to fix it is to have a governor
who will stand up.
I mean, we we Dunleavy hasessentially checked out.
He's been checked out for maybethe last six years but Dun't
want to be essentially checkedout.
He doesn't get involved in thediscussions about revenue.
We've got a revenuecommissioner, adam Crum, who's
on vacation in Hawaii during thesession.
(37:17):
We've got an administrationwho's just checked out, and so
you're leaving the power in thehands of Bryce, bryce, Edgman
and others, gary Stevens and thelegislature, who are who are
developing these policieswithout the governor, governor's
involvement or governorgovernor taking a lead or the
(37:38):
governor's vetoes.
You know, at one point you mayremember this conversation way
the heck back in 2019.
At one point, we said look, thegovernor ought to just veto the
entire budget.
If you're not going to, ifyou're not going to preserve the
permanent fund dividend, vetothe entire budget, start over
again.
But he didn't do that and he'snot taken positions along the
(37:58):
way that have helped address theproblem.
Speaker 2 (38:02):
All right, we're continuing now.
Brad Keithley Alaskans forSustainable Budgets the weekly
top three.
We're on to number three.
We're trying something a littlebit different because you know
we knew it was going to bepainful, uh.
But now we want to do somethinga little more fun.
Brad just spent two weeks overin ireland.
Uh, he was a, he was a groupiefor a celtic man thing.
(38:23):
He just basically followed himaround like the grateful dead.
Only it was the celtic versionof that.
Of course, I'm sure everybody'sfirst question is did you run
into rosie o'donnell while youwere?
Not?
I did not.
I'm sure that's the, I'm surethat's the first question that
everybody's asking.
Uh, but you got some top threemoments for, uh, while you're
(38:43):
over there.
You said you've been over thereseveral times and this was
still the best.
Give us, uh, give us a rundownman, give us your it, your
itinerary.
What, what happened?
Speaker 1 (38:50):
Well, this is an old Michael Duke's finer things
segment.
One of the one of the myfavorite things that you ever
did was your, was your finerthings program, that that that
talked about, talked about.
You know the things that placesto eat, places to go, places to
see, places to stay, right.
So this, this is a.
This is a.
(39:11):
This is a michael duke's finerthing segment.
Um, I've been to ireland a lot,uh over my life, um, and I've
done it several different ways.
Uh, sometimes I've gone overand I've just rented a car and
driven myself around.
Basically, I've sort of set theagenda by where bands that I
want to hear are playing, andI've just sort of wandered
(39:32):
around the country, going frommusic festival to music festival
in the summer.
That's one way I've done it.
Another way I've done it is togo on various tours that are set
up as musical tours and theykick off and every night there's
music and somebody comes in andplays.
(39:53):
You have a tour guide, you havea tour director who is a
musician themselves.
They arrange for othermusicians Irish musicians to
come in and play and and and you, you get music every night and
then during the day you sort oftour the country.
You see castles and you seedifferent things about Ireland.
This one was different.
(40:14):
This tour was different in thisrespect.
The tour guide, the tourdirector, was Ciaran Casey who,
for those who follow Irish music, was one of the original
members of the band Sullis backin the 1990s.
A great Irish musician who hasIrish singer, who's gone on and
done several things.
(40:34):
But Karen is interested notonly in the music but she's also
interested in the history.
She's dug into the history ofIreland and one of the things
that I've missed about either Adoing it by myself or B doing it
through the music tours, hasbeen digging into the history.
I'm really fascinatedparticularly by the early 1900s
(40:58):
segment of Irish history theEaster Rising of 1916, the Civil
War or the War of Independencefrom 1919 to 1921, and then the
Civil War that followed the Warof Independence, which it was
Irishman against Irishman andI've never quite understood that
.
But this tour was great becauseKaren not only is a great
(41:21):
singer, not only a greatmusician and not only did she
bring in musicians on the tour,but we also had three or four
academic quality graduatelectures on Irish history,
particularly on the Irishhistory of the early 1900s.
To understand that you had todig into, you had to go back in
(41:45):
Irish history quite a ways, andthese lectures did, and some of
the tour was visiting thesevarious locations that were
important to Irish history.
But to me, the great thing aboutit was we combined the music
and the culture with this sortof focus on the history.
That's not for everybody, youknow.
(42:06):
Some people want to focus ondifferent things, but but I, my
point is that there is really,if you, if you look for it and
you spend enough timeresearching it, you're going to
find a tour for whatever it isyou you want to do, what you,
what you want to learn aboutabout Ireland.
If you want music all the time,there's tours for that.
If you want just to go aroundfrom castle to castle, there's
(42:29):
tours for that.
If you want to go around fromcity to city, from shopping
center to shopping center,there's tours for that.
But what this really broughthome to me is if you dig deep
enough and if you follow enough,if you understand what people
are trying to accomplish, enoughyou can get into.
You can find a tour that reallyhits all of your hits, all of
(42:50):
your buttons, and that's that'swhat this tour did for me Great
country, great people, greatmusic.
This was as much a foodie touras it was a music tour, because
Ireland also has great foodthese days.
You have to dig a little bit tofind it, but it also has a
great food uh, great food, greatuh.
(43:11):
Great views, great uh, uh, uhuh.
Geological uh uh, things to to,things to do and things to see,
um, but, but at the core, youcan find a tour that does
whatever it is you want.
Speaker 2 (43:27):
So when Terry, finally, you know, prevails on
you Michael it's not that Idon't want to go to Ireland, man
, it's not that I don't want togo there.
Um, well, name, you know I'mI'm curious about the cause.
The food thing is definitelypart of the finer things.
For those of you who don't know, it was a podcast that I did.
I think there's still 12 or 14episodes up on iTunes or
(43:49):
wherever it's at.
You can go back and listen toit.
It was one of my kind of mypassion projects that I just I
ran out of time and money to do,where we went around to various
areas in Alaska and the PacificNorthwest and we visited them
and interviewed different peopleand talked about how did they
get started, and it was just, itwas fun, it was really
enjoyable.
I, too, enjoy the history ofhow people get started and
(44:11):
things like that, but you knowIreland would be that would
definitely be bucket list stufffor that.
You talk about food.
What was you know?
I don't know if I think oftraditional Irish fare.
You know I mean my wife does,we do the corned beef, obviously
, and the shortbread and all thethings, the hot cross buns,
(44:31):
those kind of things, but whatwas the things that stuck out to
you?
What is traditional Irish farein your mind?
Speaker 1 (44:40):
So Ireland is an island right, and there's a huge
amount of fishing that goes onfrom Ireland, and so the seafood
was frankly it is, it is everbit the equal I'm going to get
in trouble for this, but it isevery bit the equal of the
seafood that we have in Alaska.
I love Alaska seafood and I andI eat a lot of seafood, but the
(45:02):
Irish seafood was every bit theequal of that.
So you had some great seafoodrestaurants.
Ireland typically was thebreadbasket, the beef
breadbasket for England.
One piece of history the Irishfamine in the 1850s was a famine
and it was the failure of thepotato crop, which is what the
(45:22):
Irish people relied on.
But they were growing a lot ofbeef, they were growing a lot of
other vegetables for export toGreat Britain, and the famine
was not because Ireland didn'thave food.
They did.
It's just that the British kepttaking, the English kept taking
the food that was traditionallyexported to them and the crop
(45:43):
that the food source that theIrish relied on potatoes failed
and that's what triggered thefamine.
But Irish beef has always beena favorite of mine.
I've got a couple of steakhousesin the country that I always go
to whenever I'm over there andand the Irish beef was good and
lamb.
So you, so you think aboutIreland and and a lot of the
(46:04):
country is is cheap.
I mean a lot of wool, theygenerate a lot of wool, but as a
consequence of that you have alot of lamb, and so lamb is also
a wonderful, a wonderful dishover there, and you can find
restaurants that have aselection of the of the three of
seafood, you know, beef and andlamb.
Or you can find restaurantsthat focus on one of those great
(46:28):
potato dishes, other vegetables, but it's those big three
seafood, because it's a bigfishing country, beef, because
that's historically what they'vedone a lot of, and lamb.
Speaker 2 (46:43):
I love me a good mutton dish.
I'll tell you, it's not oftenthat we get a chance to have
that around here anymore, butthat's good stuff.
Where do you recommend startingoff in Ireland?
Is there a good primer?
Is there a good starting thingbefore we get two minutes here?
Speaker 1 (47:02):
Well, you have to just look up Irish tours and
start digging down through that.
Or if you have a favorite Irishperformer, a favorite Irish
singer, see if they lead a tourand start trying to dig into
that.
Ireland's basically there'sfour different parts.
There's the South, which iscentered around Cork.
There's the West, which iscentered around Galway.
(47:23):
There's the East, which iscentered around Dublin, and
there's the North, which is moreor less centered around Belfast
, although there's still thedivision between Northern
Ireland and the Republic ofIreland in the North.
But there's four differentregions.
They generally emphasizedifferent things.
There's a lot more history,particularly around the early
(47:45):
1900s, the period that I've beenfocused on.
There's a lot more historyaround cork than there is
perhaps elsewhere in the country.
But you just start digging in.
I mean there's Wild AtlanticWay tours is one, there's Inish
Free Music Tours is another, andjust start with those and then
(48:08):
just start digging in from there.
Another, and just start withthose and then just start
digging in, digging in fromthere.
Or you can go on your own, buthave some focus when you're
doing that.
Say, you're going to go toGalway and you're going to go to
Cork and you're going to go toDublin.
Speaker 2 (48:19):
Say you're going to follow a certain musician around
.
All right.
Well, I'm looking forward.
I mean, you know me, I wouldhave to do the whiskey, the
Jameson's, the Irish whiskeytour as well.
On top of all that, it would be, uh, it'd be an amazing time.
Well, brad, like you said, youleft and it was a mess, and you
came back and it was a mess.
We can go away for five yearsand come back and it would still
(48:43):
be.
I mean, this is what happensevery time when I, you know, at
the end of the year, when I goon vacation, I come back and
it's everything's still there,all the problems still there,
all the things still there.
I mean, going back to Frank'squestion, how do we change the
mindset of the legislature?
I don't know.
I mean, at this point I used tothink we could change the
(49:05):
players and that would do it.
I just don't even know, man.
I just don't even know.
You know, man, I just don'teven know.
Speaker 1 (49:09):
You know that's a question.
I'm sure you put it to him, butthat's a question for Rob Myers
.
I mean, that's a question forsomebody who's inside dealing
with these issues, albeit in theminority Senate minority, but
inside dealing with these issuesand trying to figure out, you
know, how you make your waythrough the morass that's the
(49:29):
legislature to get somethingthat makes more, that makes more
sense.
I'm not I.
I, I'm not I.
You know we've been doing thisfor however long we've been
doing it, we've never solved it.
So I think that's a questionfor you know, for somebody who's
on the inside trying to dealwith these issues.
Speaker 2 (49:50):
Yeah, I mean at this point, I just you know, I know
that a lot of these people I'msure that they believe I don't I
don't ascribe like evil toeverybody you know, or anything.
I know some people are likethat, that feel that way.
I think that these people thinkthat in their heart of hearts
they're doing the right thing,but I just don't see how, in the
big picture, they can continueto think that what they're doing
is sustainable and will workout in the end, especially based
(50:11):
on the history of what'shappened so far.
You can't keep doing the samething that you've been doing for
the past 30 years and expectthat it's going to turn out
differently.
Speaker 1 (50:20):
Yeah, and one of the problems and again, I think Rob
would be a much bettercommentator on this than I am
but one of the things thatstrikes me as I look at this
stuff is it's always just get methrough this session.
I'll be better next session, butjust get me through this
session.
Or, in the case of Gary Stevens, just get me to retirement and
if I need to raid the permanentfund, you know that'll be fine,
(50:43):
it'll get me through the end ofthe session.
It's just there's not anoverarching long-term view, and
that's where the governor comesin.
I mean, the governor is elected, in my view, to have that
overarching long-term view, tohave that plan, to have that
vision.
Thank you, that vision thatwe're working toward and you
(51:06):
know, I'm sure Governor Dunleavyhas a vision.
I'm just not sure what it isand I'm not sure it's relevant
to what's going on in thelegislature.
So that's, I mean, to me thatis where the process could be
helped a lot by having agovernor with a consistent
(51:28):
vision who is going to step inthe battles and fight those
battles.
Speaker 2 (51:34):
I think the first step would be to have a governor
that doesn't have largeraspirations, right?
I mean, it would be interestingto have a governor who'd be
like I'm willing to just do oneterm.
If I'm only here for one term,that's fine.
I'll make as big a mess as Ican to try and solve the
problems.
As you said, I mean, thegovernor could have vetoed the
whole budget when it was upagainst it.
(51:54):
He could have vetoed the wholebudget.
He could have taken a strongstand and and Dunleavy's checked
out.
Dunleavy, I mean, he got calledout by James Kaufman, of all
people, the other day for notengaging and not being part of
the whole thing.
You know, just like not notbeing there, um, and whether
he's planning on running forSenate or what.
I don't know what he's planningon, but he you just can't.
(52:15):
He has an inordinate amount ofpower in all the States.
The governor of Alaska is oneof the strongest executive
positions in the entire countryand yet he has done virtually
nothing, um, uh, other thanpropose some real mealy mouth
budgets and everything else.
It's, it's frustrating to watch.
Speaker 1 (52:35):
He's absolutely done nothing.
I mean, the budget this yearproves that.
The budget this year showeddeficits, showed running out of
the constitutional budgetreserve, draining the
constitutional budget reserve.
About four years in and nothingbut red numbers from from there
on out.
And he, and that's what hesubmitted.
The statute says you have tosubmit a balanced budget.
He didn't.
(52:55):
He just ignored it and kept ongoing.
So he's absolutely done nothingin terms of providing vision
for where this state ought to begoing.
One could say or Bill Walkerwould probably say in his
defense he was that governor whostepped in and agreed to do and
, you know, made the harddecisions in that one term.
(53:17):
Problem is Walker made thewrong decisions.
Problem is Walker ultimatelytook the easy road out and took
the PFD because that's where thepolitical forces, the top 20%,
the oil companies and thenon-resident industries wanted
to take it from, because thatprotected them.
So you have to have a governorwho's not only willing to get in
(53:38):
the battle but you have to havea governor whose heart is in
the right place in terms offighting these battles, and
maybe that's asking more than isout there, but we'll keep
looking, but that's that's partof where this starts Having a
leader, having a governor whowill drive these issues home,
who will, who will veto whennecessary and send them back to
(54:01):
the drawing board when necessary.
That's that's, I think, part ofwhere this starts.
Speaker 2 (54:06):
Well, and Frank points out the problem with this
mindset.
He says so, if I'm correct,no-transcript.
Speaker 1 (54:35):
Yeah, yeah, If you look at Trump, I mean, if you
look at Trump, I don't think wego back to the same old, same
old after after Trump.
I don't think.
I don't think there is a sameold, same old to go back to.
It's, everything's going to be.
You know, we're going to be in52.
It's going to be a game of 52pickup and somebody's going to
have to sort of put some ofHumpty Dumpty back together
again.
But I don't think you go backto the to the same old, same old
.
So if you have a governor whodoes that sort of thing, I think
(54:57):
I think we break the mold andgo forward.
Speaker 2 (54:59):
Yeah, I would agree.
I think if we change thedirection of the momentum, that
is what we do.
All right, well, brad KeithleyAlaskans for Sustainable Budgets
the weekly top three next weekMaybe we should include a
positive segment.
Speaker 1 (55:15):
every week I'll just have to travel more to do that.
Speaker 2 (55:19):
That's your mandate.
Thank you, brad, appreciate youcoming on board.
We're out of time.
Speaker 1 (55:25):
Well, that's a wrap for another week's edition of
the weekly top three fromAlaskans for Sustainable Budgets
.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
SoundCloud, Spotify and Substackpages, and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,Managing Director of Alaskans
for Sustainable Budgets.
(55:46):
We look forward to you joiningus again next week for the next
edition of the Weekly Top Three.
Hi, this is Brad Keithley, managing Director of
Alaskans for Sustainable Budgets.
Welcome to the weekly top threethe top three things on our
mind here at Alaskans forSustainable Budgets for the week
of April 14th 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 six to 8.
Am.
I joined Michael weekly in thefirst hour of Tuesday show from
six 10 to 7.
Am For a discussion between thetwo of us about our three
issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:53):
soundcloud, spotify and Substackpages, also on the Alaskans for
Sustainable Budgets website, aswell as the projects page on
national blog site mediumcom.
You can find past episodes ofthe weekly top three also at the
same locations.
Keep in mind that, in additionto these podcasts during the
(01:13):
week, 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
Twitter.
This week, our top three issuesare these First, we explain the
difference between an accountingbalanced budget and a
(01:36):
distributionally balanced budgetand why the legislature is
continually failing to producethe latter.
Second, we discuss formerSenator Joe Paskvan's recent
op-ed in the Fairbanks DailyNews Minor attacking the
Permanent Fund Corporation'sproposed backdoor raid on the
Permanent Fund Corpus.
And third, for those interested, we do a Michael Duke Show
(01:59):
finer things segment on myrecent trip to Ireland.
And now let's join Michael.
Speaker 2 (02:06):
So the weekly top three we've got some good stuff.
We're saving that for savingthat for the end.
Number three, we're going totalk about a little bit about
your trip to Ireland and all thefun stuff.
We'll have a mini top threeinside the top three.
But before we get to that let'syou know I hate to do it, but
we've got to talk about it.
There's been a lot that's goneon, uh, over the last couple of
(02:31):
weeks while you've been gone,and there's going to be a lot
more coming up in the next twoweeks.
I mean we have seen somechicanery, we've seen some, uh,
some deceptions and some fifthdimensional chess moves and you
night, late night things andeverything else.
But this balanced budget thingthat we keep talking about, I
(02:52):
mean they keep using that wordbut I don't think it means what
they think it means.
Give me the rundown here.
The number one is the balancedbudget that they keep talking
about.
Is it really, brad?
Is it really?
Speaker 1 (03:07):
Well, michael, it's funny, over the two weeks I'm
not sure anything's changed allthat much.
When I left, we were talkingabout the budget that was in
house finance.
When I come back, we're talkingabout the budget that's just
barely made it out of housefinance and onto the floor.
So I got rested over the twoweeks.
I'm not sure about anybody else.
(03:28):
So we're going to hear a lotthis week and next and maybe the
week following that, maybe theweek following that maybe into a
special session.
We're going to hear a lot oftalk about a balanced budget and
achieving a balanced budget,that that is the goal of
everybody to achieve a balancedbudget.
And what I want to talk aboutis there's really two balances.
(03:51):
When you talk about fiscalpolicy, there's two balanced
budgets.
One is an accounting balance,where revenues equal spending or
spending equal revenues, whereyou have an accounting balance
across the top.
But there's also, when fiscalpolicy experts talk about a
balanced budget, they're alsotalking about a distributionally
balanced budget.
(04:11):
That is, that the contributionstoward the budget and the
distributions out of the budgetare roughly equal.
That no one bracket incomebracket or no one industry or no
one.
That no one bracket incomebracket or no one industry, or
no one segment of industry istaking a bigger hit than any
other.
They're all contributing in afashion that is distributionally
(04:40):
balanced.
What we're going to hear overthe next couple of weeks or
three weeks is we're going tohear a lot of talk about
accounting balance.
We're going to hear a lot oftalk about, at the top level,
spending equaling revenues orrevenues equaling spending, and
I'm not sure they're even goingto achieve that.
If you look at the numbers thatare in the House Finance
version, if you look at thenumbers that are being talked
(05:02):
about on the floor, if you lookat the amendments that are on
the floor thus far, we have moreamendments to go, but if you
look at the amendments on thefloor, I'm not sure.
And also, at the same time,look at where FY26 revenues are
going.
With the oil price slide, I'mnot sure that we're even going
to achieve an accounting balancebudget.
(05:24):
People talk about dipping intothe CBR to balance this year's
budget because we're having aslide in revenues and there's
been additional spending addedon top in terms of the
supplementals.
And now people are talkingabout dipping into the CBR to
balance next year's budget, theFY26 budget, because of the
(05:44):
slide, ostensibly because of theslide in oil revenues.
It's a combination of beingunable to control spending and
the slide in revenues.
But we're going to have a lotof discussion about that
accounting balance and I suspectthat the majority in the House
and the majority in the Senateare going to claim victory if
(06:06):
they come close to thataccounting balance spending
equaling revenues.
But that's not the only balancethat's important.
When fiscal policy people talkabout balanced budgets, they're
also talking aboutdistributional imbalance and
we've already given up on that.
The amendment Friday night tosignificantly cut the PFD below
(06:37):
the statutory levels andtransfer the remainder, transfer
that difference, the cut, tothe general fund essentially tax
middle and lower income Alaskafamilies and transfer that
difference to the general fundensures virtually ensures that
there's not going to be adistributional balance.
Everybody talks aboutdistribution.
They don't say they're talkingabout distributional balance.
(06:58):
But everybody talks aboutdistributional balance.
When the oil industry says, oh,you can't increase revenues
from us because it will affectour industry, they're talking
about distributional balance.
They're talking about you can'ttake more from us because it
will affect our business and itwill cause us to have adverse
(07:19):
consequences in our business.
That's a discussion aboutdistributional balance.
When people say oh, you can'thave taxes, you can't have sales
taxes or income taxes becausethat would take from Alaska
families separate.
Apart from the fact that PFD istaking from Alaska families,
the PFD cuts are taking fromAlaska families.
They're talking aboutdistributional balance.
(07:39):
And so I think it would beuseful if we sort of fessed up
in this discussion that we'regoing to have and admit that
we're talking aboutdistributional balance and focus
on distributional balance as anissue.
When the oil companies say theycan't afford any more, dig into
that.
Can the oil companies affordmore?
(08:01):
They can't, and we've talked toyou on the show a lot about the
economics of the oil industry.
We've talked on the show aboutthe revenue you take from the
oil industry and they can'tafford more.
When we talk about sales taxesand income taxes, we're talking
about really a distributionalbalance affecting Alaska
(08:22):
families, but we're also talkingabout a distributional
affecting non-residents.
We don't take fromnon-residents.
Currently Non-residents get off,as Governor Hammond put it at
one point, scot-free.
They don't have to contributeto the cost of government in
Alaska, unlike in the 49 otherstates and the District of
Columbia.
Non-residents in Alaska,tourists, non-resident employees
(08:44):
, don't have to contribute tothe cost of Columbia,
non-residents.
In Alaska, tourists,non-resident employees don't
have to contribute to the costof government and the result of
that is a shift.
The share they would otherwisepay over to residents increase
the burden on residents ofAlaska.
So we would gain a lot, I think,if we would just confront the
(09:08):
fact that we're talking aboutdistributional balance when
we're talking about these issuesand try to develop a budget and
work to develop the budget andset as a goal of a budget that
not only is accounting balancein the sense that revenues equal
spending, but also in terms ofdistributional balance, that
(09:31):
we're spreading the burden ofwho pays for the costs of
government in a balanced manneracross all categories, including
industry, including oil,including non-residents and
including residents and withinresidents, looking at finding a
(09:51):
way to distribute the burdenthat we're going to shift to
Alaska families.
Finding a way to shift thatburden in a way that's balanced
across Alaska families, asopposed to the way we're doing
it now with PFD cuts, pushingthat burden almost entirely on
the middle and lower incomeAlaska families and letting the
top 20% escape from sharing anyof the costs of that burden.
(10:14):
So, as we have this discussionover the next two weeks and as
people in the legislature talkabout oh, we got to achieve a
balanced budget.
People in the legislature talkabout oh, we got to achieve a
balanced budget.
It's in two ways it's in.
(10:35):
One is an accounting balanceacross from spending and
revenues, to spending andrevenues equal out.
But also it's distributionalbalance that takes from all
categories, uh on a in a in abalanced fashion and make sure
everyone is contributing in away that is balanced, uh, across
across the whole spectrum.
And right now we don't have it.
Um, I would love to give areward to the first person who
(11:00):
would go on the, on the housefloor, on the Senate floor, and
talk about a distributionallybalanced budget, who would go on
the House floor or on theSenate floor and talk about a
distributionally balanced budget, because I think it would
elevate the discussion in a hugeway from where we've been.
Speaker 2 (11:14):
Well, good luck with that.
I mean, we watched NellieJimmy's speech about this
impassioned speech about thepeople and how they're affected
and everything else, uh, youknow, by pfd cuts and how it
drives people her people intopoverty and all this other kind
of stuff uh, really tearful.
And then it was all and at theend she was like and to save you
(11:35):
, I'm going to cut the pfd.
Wait, you just spent fiveminutes telling us why this was
horrible for people.
You're, and now you're gonna.
I mean it, it makes no sense.
Speaker 1 (11:47):
Brad, that was a great opportunity to talk about
distributional balance.
That was a great opportunity tosay look, you're taking it out
of, out of my constituents,you're taking it out of middle
and lower income Alaska familiesin my district, you're taking
it out of subsistence, you'retaking it out of elders.
It's a great opportunity to sayand we need to finish that off
by saying and we need balanceacross all categories of Alaska
(12:15):
industry and people incontributing to this budget.
Great opportunity.
She set it up perfectly to dothat and then she just gave up
on it.
I mean, she backed off and saidoh no, we've got to, we've got
to spend instead of instead offocusing, instead of focusing on
.
It was a great, it was a greatsetup, I mean absolutely great
setup.
Speaker 2 (12:34):
It was a great.
I mean, it was completelybipolar.
At some point You're like allthese bad things about taking
the PFD and to save you I haveto take the PFD.
I mean, it is the prime exampleof we know better than you how
to spend your money.
Speaker 1 (12:48):
Yeah, it's a combination.
What's going on?
The Senate, or the Housemajority, rather sold their soul
to Chuck Kopp To get Chuck Koppto come over and give them a
one vote majority.
What Kopp insisted on was notaxes on the oil companies and
no taxes, no personal taxes inthe form of income or sales
(13:11):
taxes, and that's.
I mean that's what's gone on,and COP is.
There was a press conference aweek ago, a couple of weeks ago,
it's all blurring in my mindbut where Kopp said something to
the effect of I would havejoined the minority, I would
have made the minority amajority if they just would have
(13:33):
agreed to a balanced budget.
And what he meant by that wasthe accounting balanced budget.
He certainly didn't mean thedistributionally balanced budget
, right, but I joined themajority.
I joined the current majority.
I joined Bryce and the othersbecause they promised me he
didn't say this, but if you readbetween the lines and look at
(13:53):
his votes and look at the votesalong the way, because they
promised me that they would nottax all companies and they would
not have a personal tax otherthan PFD cuts tax.
They would not have a personaltax other than PFD cuts.
And so what they got.
What the majority got was copsvote to spend.
(14:15):
But they gave up any effort,any votes, to get distributional
balance.
Nellie Jimmy should have.
Well, she should have called aspade a spade and said look,
this is what's going on.
You know we need distributionalbalance.
This is why we needdistributional balance.
This is who's being affected byhaving distributional imbalance
(14:35):
.
This is the consequences ofdistributional imbalance.
We need to have distributionalbalance and I urge my colleagues
to work on distributionalbalance.
But she didn't.
She adhered to the party linethat Bryce and Kopp had set up.
Speaker 2 (14:50):
Well, even even Neil Foster didn't talk about this,
even though he voted against it.
It's the same guy I mean.
This is it's again.
I'm not holding my breathbecause I don't think they're
going to talk about that.
They don't because it wouldtake away their ability to spend
.
That's the whole thing.
They again.
This is a symptom of thepolitician's disease.
And if we did talk about someof those distributional things
(15:12):
again, without that spending cap, they're just going to spend it
anyway.
So it's kind of where we're atright now.
Final thoughts on this Brad,we've got a break here.
Speaker 1 (15:22):
Well, they're going to spend it anyway.
But at least the cost of itwould be distributionally more
balanced than what we have itnow.
At least the top 20%, at leastthe oil companies, at least the
non-residents would contributeto the cost and that would
reduce the burden on Alaskafamilies.
(15:43):
Having the oil companiescontribute more, having
non-residents contribute more,would reduce the burden on on
alaska families.
Having the oil companiescontribute more, having
non-residents contribute more,would reduce the burden on on
alaska they, they want to talkabout it, they, they, I mean
they want to.
Speaker 2 (15:54):
they they're well, they don't care about
distributionally, they don'tcare about it, but they want to
talk about it.
That press conference thatyou're referring to, where cop
told that which, by the way,turns out may not have been true
I mean, I'm just you know, hesaid he had a conversation but
turns out that may not have beentrue Was the same one where
Josephson said the quiet partout loud.
But we don't yet live in aworld where the Alaska people
(16:17):
are ready for themselves toinvest in their state government
.
Speaker 1 (16:23):
Yeah, but they do.
I mean, that's the fallacy ofall this they do through PFD
cuts.
We're reducing the income ofmiddle and lower income Alaska
families to increase spending.
Speaker 2 (16:34):
You and I know that, but see, they're not treating it
like that.
See, they're saying the quietpart out loud.
We need people to invest intheir own state.
Remember I said what did I tellyou?
You guys need to pay your fairshare.
That's what he's saying there.
You guys need to pay your way,and this is where we're at right
now, brad, you're talking.
this is pie in the sky, baby.
(16:54):
I mean, you're talking aboutthese people actually wanting to
talk about distributionalfairness between who's paying
and everything else.
It's all about protecting whothey're protecting and, most
importantly, because they wouldthrow their top 20% donors under
the bus in a hot second if theythought they could get away
with it, just so that they couldprotect their spend.
(17:16):
That's what this is all about,right?
I mean, this is already whatthis is all about.
Speaker 1 (17:21):
Yeah, I understand that.
But here, keep this in mind.
Keep this in mind If we haddistributional balance, if we
had the oil companies payingwhat they're supposed to pay
under the Constitution, if wehad the top 20% contributing, if
we had non-residentscontributing, we might spend
more, but the share of that andthe burden on Alaska families
(17:43):
would be less because of thecontribution coming from
non-residents, which is about15% of revenues, could be about
15% of revenues because of thecontribution coming from
non-residents, because of thecontribution coming from the oil
companies, because of thecontribution coming from other
industries.
We might be spending more, butthe burden on Alaska families,
(18:07):
which is what we really shouldbe focused on, would be less
because we have thesecontributions coming from from
the other segments.
So it's you've got.
We need to keep in mind.
We need to keep the focus onwhat Alaska families are paying,
as opposed to what the overallspend is.
(18:27):
The overall spend is important,but even more important is what
the burden is that you'reshifting to Alaska families.
Speaker 2 (18:36):
Well, again, my fear is and I mean, I see what you're
saying, I understand whatyou're saying intellectually,
but my fear is, if we did getmore oil taxes and we did start
taxing outside interests youknow, tourists and out of state
employees, et cetera, et ceterataxing outside interests, you
know tourists and out of stateemployees, et cetera, et cetera
(18:59):
they already know what we, whatthey're willing to take from us,
so they would just expand it towhat we were already paying
before and take all thatadditional money and spend it.
This is the danger and whileI'm I'm happy to talk about you
know, we need to talk about thetaxes and the different types of
taxation, the fear, my fear hasalways been, is that that
spending will expand to consumeall the available money.
Speaker 1 (19:17):
But think of what you're, but also think about
what you're picking up.
All of a sudden, you're pickingup the old companies, pushing
back on spending because they'rehaving to pay a share of the
increased spending.
You're picking up the top 20%,pushing back on spending because
they're having to pay a shareof the spending.
You're picking up thenon-resident industries tourism
and fish pushing back onspending because they're having
(19:38):
to pay a share of the spending.
So the dynamics are shifting.
Yes, you may have a slightincrease in the overall spend,
but you're picking up a lot ofopposition to that overall spend
by allocating a portion of itto the additional segments and
you're collapsing or you'rereducing the share that Alaska
(20:01):
families have to contributebecause you're bringing in
contributions from non-residents, from the oil companies and
from other industries, andyou're right.
Speaker 2 (20:10):
I just don't know if the pressure is great enough to
hold down the spending.
And that's that's the biggestpart of the problem.
Rob Meyer says investingimplies we're happy with our
return.
Well, but I mean some peopleare.
We saw that meeting inAnchorage.
I mean tax me, tax me harder,daddy, right, I mean that's what
they want.
They there's, there's, there'sa group in there that's like
just tax it, give it all to thegovernment.
(20:31):
They know better than us how tospend that money.
So there's a whole group outthere that believe that.
And you know.
And of course now, like I said,with them saying the quiet part
out loud, we're on the verge,brad.
I mean, you know, do you thinkwe're going to see taxes?
Right, I mean I think we're inagreement, we're going to see
(20:53):
taxes in one form or another.
Now that people like Josephsonand others are saying that more
and more.
That's not the first time it'sbeen mentioned in the last eight
months and I think it's justgoing to continue.
I think that's the new refrain.
Speaker 1 (21:06):
Yeah, but the focus I mean as we enter that era we
need to keep the focus ondistributional balance to make
sure that the beneficiaries ofthe contributions by the
additional, to make sure thatthe additional segments can
contribute to that spending andmake sure that the share being
(21:26):
borne by Alaska families is atleast held constant, if not
reduced, as a result of theadditional shares coming in from
other segments.
Speaker 2 (21:34):
Well, like I said, I'm not going to hold my breath,
because that's how yousuffocate, that's how it happens
.
Right there, brad Keithley,alaska's Four Sustainable
Budgets, the weekly top three.
I'm looking forward to numberthree, number two I'm looking
forward to number three.
I mean, you know, while Bradwas gone, apparently hell froze
over because Joe Pascovan wrotean opinion piece that Brad
(21:56):
Keithley actually agrees with,which is unusual.
I know there's been a littlebit of a tete-a-tete between
Brad and Joe on this.
Joe wrote a piece talking aboutthe permanent fund and the
earnings reserve and theprinciple of the fund and
everything else.
And, my golly, you guysactually agree on something,
brad.
Speaker 1 (22:15):
Yeah, I'm not sure I've ever agreed with Joe before
.
I mean, usually Joe's op-edsare about oil taxes and while
you and I talk about that,there's a justification and a
need for additional oil taxes.
Joe sort of goes to the extreme.
Additional oil taxes Joe sortof goes to the extreme of that
(22:35):
and I think, goes beyond what'sa balanced approach with respect
to the oil companies.
But this op-ed was on somethingdifferent.
This op-ed was on the permanentfund corporation's proposal
that's currently before thelegislature to combine the
earnings reserve and thepermanent fund corpus.
We've talked about it on theshow before.
I oppose it because to me it'sopening a backdoor.
(22:56):
Well, to a lot of people.
It's opening a backdoor intothe corpus.
It allows the permanent fundcorporation to draw, to take a
5% draw, even if they're notearning a five percent draw, and
that additional amount beyondwhat they're earning, between
what they're earning and thefive percent draw, would come
(23:18):
from the corpus, and thisproposed constitutional
amendment opens that door andallows them to do it.
There's also some otherincentive issues with that.
The Permanent Fund Corporationreally wouldn't care anymore
about its performance becauseit's going to generate 5% with
this combination consolidation.
It's going to generate 5%regardless of what it does.
(23:41):
If it produces a 1% return, 2%return, 3% return, they're still
going to take 5% by drawing theadditional amount out of out of
the corpus.
To my somewhat to my surprise,pascavan, in an op-ed in the in
the Fairbanks News Minor, agreeswith that.
This is what he said theproposed constitutional change
converts the currenttwo-component system to a
(24:03):
single-component system.
The 5% POMB would be withdrawnfrom this single-component
system Because that amountbecomes spendable.
The permanent fund can be spentdown to nothing.
The word permanent is gone.
Risks to maintaining safety ofprinciple arise.
Consider this question, and Ithink this is a perfect setup
(24:24):
for it.
If the 5% withdrawal rate forthe current POMV is a factor in
fully depleting the ERA, that is, the ERA is being depleted
because we're taking 5% eventhough the permanent fund
corporation isn't generating a5% return.
Isn't it obvious that ifconstitutional protection of the
principal is removed, a 5%withdrawal rate from the single
(24:46):
component permanent fund can andwill deplete the principal?
The answer is yes, of course.
Removing constitutionalprotection of the principal
destroys safety of principle.
Permanent becomes impermanent,and Joe's got that issue exactly
right.
What we're doing with thisproposed constitutional
amendment that's currentlybefore the legislature, that's
(25:07):
being pushed by the PermanentFund Corporation.
The current Permanent FundCorporation is opening a back
door into the principal andallowing the permanent fund
corporation and the legislatureto get in and take from the
principal whenever it needs itto make up the difference
between what the permanent fundcorporation is actually earning
(25:28):
and 5%.
Here's the fundamental problemthat's going on.
That's causing this issue.
The permanent fund corporationis not earning what it should.
5% isn't a bad standard interms of withdrawal, but the
permanent fund corporation hasbecome so risk-averse, so
(25:56):
protective in its investmentpolicy, that it isn't earning
the 5%.
If you look at the S&P, if youlook at other standards of
earnings, they're all well inexcess of the 5%.
The permanent fund has becomepermanent fund corporation which
(26:17):
manages the permanent fund hasbecome so tied up in its efforts
to become risk averse that it'sreduced the earnings of the
permanent fund on the Alaskapermanent fund below that 5%
standard.
That's the problem.
The problem is the way in whichthe Permanent Fund Corporation
(26:38):
is managing its investments.
The problem is they aren'tearning enough on the
investments Secondary to that.
They're spending a hell of alot of money not to earn very
much.
I mean they're spending almosta percent of the annual earnings
on management fees andconsultants fees to advise them
(26:58):
on how to do this complicatedinvestment approach.
So they're not only not earning5% on return, they're reducing
what they are earning by apercent to pay all of the
management and consulting fees.
That's the problem and they'retrying to get out of there
rather than address that problem.
(27:19):
Rather than address the factthat they're not earning what
they should, they're notpursuing investment policies,
that they're spending way theheck too much in order to
produce those inadequate returns.
Rather than address thosefundamental issues, they're
trying to backdoor it by sayingwell, you know, if we don't
(27:42):
produce 5%, we'll just go intothe principal.
We'll just open this backdoorinto the principal and keep
generating, keep giving you a 5%return over time.
Generating, keep giving you a5% return over time.
We need, instead of thisconstitutional amendment,
instead of consolidating the twoaccounts, instead of opening
this back door into thepermanent fund principle, we
(28:03):
need to focus on the legislature, needs to focus on the core of
the problem, which is thepermanent fund corporation is
not producing the type ofreturns it should and it's
spending way the heck too muchto produce those inadequate
returns.
We need to focus on thepermanent fund corporation and
on its performance, rather thanpermitting them and permitting
(28:25):
the state to open this back doorso that they can begin to drain
the permanent fund corpus whenthey don't have the type of
returns they should.
Speaker 2 (28:32):
It's the next step, right?
I mean, this is the nextlogical step because they don't.
You know they're going to intheir whole appetite for spend.
The next logical step is accessto the corpus, because it kicks
a can down the road, preventsthem from having to talk more
about taxes, and this is why theRepublicans will get on board
with this, because they don'twant cuts.
(28:54):
Willie Keppel just mentionedthat again, there was an
amendment yesterday to removesix positions that haven't been
filled in two or three years andit failed on a party line vote.
It would have saved a millionbucks and they said no, I mean
cuts.
We all think, we all know thatcuts would work.
But again, that's just moreproof right there that we're
(29:15):
never going to get there at thisrate.
With a group of people we havedown there now, because they're
not going to cut anything, it'stoo easy to gather more revenue,
to steal from the PFD, tocombine the PFD and go to the
corpus.
This is the direction they'regoing.
Speaker 1 (29:32):
Yeah, you and I have talked on the show probably
since the mid-20-teens aboutwhere do they go next after they
drain the SBR, the CBR, andonce they started into the
permanent fund dividend, wheredo they go next?
And the question was whetherthey go to taxes or the question
was whether they go to thepermanent fund corpus.
And what this is doing.
What SJR 14, I think it is isdoing is opening the door to the
(29:58):
permanent fund corpus to allowthem to start taking from the
permanent fund corpus, eventhough the permanent fund is
generating less in earnings thanwhat they're taking out.
So it's a bad, bad policy thatthey're wrapping up as, oh, it's
necessary to make the permanentfund permanent.
(30:19):
It's not.
It's necessary.
What they're doing is trying tomake the permanent fund
impermanent by allowing them tohave a backdoor into the corpus.
And Joe Pascovan has it exactlyright.
If SJR 14 gets out of thelegislature, it's going to have
to be voted on by the peoplebecause it's a constitutional
(30:39):
amendment to the constitutionalprovisions that currently set up
the two-account system for thepermanent fund, and it's going
to be interesting.
I hope it doesn't get out ofthe legislature.
I hope that they don't get thesuper majorities that are
required to pass theconstitutional amendment out of
the legislature.
I hope the Senate Republicans,for one group, stand up against
(31:01):
it.
I hope the House majority orHouse minority rather stands up
against it.
Calling it what it is a raid onthe permanent fund.
But if it gets out of thelegislature it's going to go for
a popular vote and it's goingto be interesting to see the
division between those who,excuse me, are lining up to raid
the permanent fund to keep thespend going, to keep the
(31:22):
revenues going, as opposed tothose who really do want to keep
the permanent fund permanent.
Speaker 2 (31:27):
Yeah, no, it's the next step.
It's the next logical step intheir progression to basically
consume everything in sight.
That's essentially what itcomes down to.
All right, brad, we're up tothe end here of this segment.
Any final thoughts before wemove on to more happy times.
Speaker 1 (31:49):
Yeah, I guess the one thought is this is not a
partisan issue.
This is do you understandnumbers issue, do you understand
what's going on and whatthey're trying to do?
Issue.
It's not a Democrat issue.
I mean Paskavan's proving it'snot a Democrat issue.
Republican issue it's do youunderstand numbers and do you
understand the effect of SJ-14issue.
(32:12):
And that's encouraging thatit's not a partisan issue.
But then you start to wonderabout how many legislators
really do understand accounting.
So it's, it's the.
The important point I think outof this is it's not a partisan
issue, it's a.
It's a are we going to protectthe permanent fund or not?
Speaker 2 (32:29):
issue rob says.
Here's his prediction SGR 14might pass the Senate, but it
won't pass the House.
I mean, I just cannot evenfathom why somebody in the
Senate who is ostensibly afiscal conservative would look
at this and think that's a goodidea.
(32:49):
This is a good idea.
Um, you know, I I just I can'teven understand, but I mean what
Willie was talking aboutyesterday.
Uh, that amendment to removesix positions that haven't been
filled in two years, um, uh, isjust is part of our problem.
For some people who are sayingwe should just just focus on the
(33:11):
cuts, I agree that would be theultimate way to fix the problem
that we have is to just focuson the cuts.
The problem is we bring up asimple line to remove six
positions, to cut just a millionto a million.
That's pocket change.
A million dollars, that's's itOut of a $6 billion budget a
million dollars.
(33:31):
And they voted down Dude, thereis no.
We have to acknowledge that atsome point.
Tilting at windmills doesnothing but break your lance and
hurt your horse, right?
I mean, that's where we're atright now.
Speaker 1 (33:47):
And as they continue to spend without having a
distributionally balancedapproach, as they continue to
spend it, it's all coming out ofthe PFD, they're taking it out
of the, out of the permanentfund dividend, they're taking it
out of the pockets of middleand lower income Alaska families
.
So it's got to be.
I mean, I think the incentiveschange.
I think if we havedistributional balance, if the
(34:10):
oil companies have to contributemore responding to increased
spending, if the top 20% have tocontribute, if the non-resident
industries tourism and fish andothers have to contribute to
respond to additional spending,I think the dynamics change.
(34:31):
I think the incentives change.
I think the pushback onspending starts to have an
effect.
But right now there's not thateffect.
I mean, right now it's okay,we're going to spend a little
bit more.
It's going to come out of thePFD.
We've managed to take it out oftheir pockets before.
We'll just take a little bitmore and a little bit more and a
little bit more.
We'll take it down to athousand.
We'll tell them that's good,even though a thousand is like
(34:53):
8713, the split between the POMVsplit at a thousand dollars is
8713.
Then we'll take it down to 900.
Then we'll take it down to 800.
That's what's going on.
We have to broaden the basethat's pushing back.
We have to change theincentives to broaden the base
that's pushing back and if we dothat, if we have a
(35:15):
distributional balance, wereduce the burden on Alaska
families by having a significantshare of the burden borne by
non-residents, an increasedshare of the burden borne by the
oil, and that's, I think thathas the effect of improving life
for middle and lower incomealaska families and it has the
(35:36):
effect of increasing thepushback on spending frank asked
the question.
Speaker 2 (35:42):
This is the million dollar question how do we change
the mindset in the legislature?
Then?
It's a great question, frank.
Frank, I wish I knew.
I mean, we've been talkingabout it for 10, 12 years now on
this program with Brad.
How do we change the mindset inthe legislature?
I don't know.
I mean, we had legislators onthe program where we'd ask them
(36:02):
back in the late mid-20 teenswill you follow the ICER example
where they said you couldn'tspend over $3.9 billion?
And they said yes, and then itwas $4 billion and they said yes
, and then it was $4.1 billionand they said yes.
And what do they do?
They just keep blowing past it.
I don't know, frank.
I wish I had the answer.
(36:24):
You know the answer is yes, weneed a mindset of trimming
government.
The problem is nobody in thereis doing it and the few that are
trying to do it and theholdouts they're holding against
the tide.
That's all they're doing.
Again, this is like one ofthose all-consuming things that
(36:44):
just sucks up everything in theroom and you could scream and
shout and wave your hands allyou want, and it's still coming
for you, baby.
That's what's happening rightnow.
How do we fix it.
I don't know, maybe we let thewhole thing go, just flow apart.
I don't.
I have no idea at this point.
Speaker 1 (36:57):
Well, one of the ways to fix it is to have a governor
who will stand up.
I mean, we we Dunleavy hasessentially checked out.
He's been checked out for maybethe last six years but Dun't
want to be essentially checkedout.
He doesn't get involved in thediscussions about revenue.
We've got a revenuecommissioner, adam Crum, who's
on vacation in Hawaii during thesession.
(37:17):
We've got an administrationwho's just checked out, and so
you're leaving the power in thehands of Bryce, bryce, Edgman
and others, gary Stevens and thelegislature, who are who are
developing these policieswithout the governor, governor's
involvement or governorgovernor taking a lead or the
(37:38):
governor's vetoes.
You know, at one point you mayremember this conversation way
the heck back in 2019.
At one point, we said look, thegovernor ought to just veto the
entire budget.
If you're not going to, ifyou're not going to preserve the
permanent fund dividend, vetothe entire budget, start over
again.
But he didn't do that and he'snot taken positions along the
(37:58):
way that have helped address theproblem.
Speaker 2 (38:02):
All right, we're continuing now.
Brad Keithley Alaskans forSustainable Budgets the weekly
top three.
We're on to number three.
We're trying something a littlebit different because you know
we knew it was going to bepainful, uh.
But now we want to do somethinga little more fun.
Brad just spent two weeks overin ireland.
Uh, he was a, he was a groupiefor a celtic man thing.
(38:23):
He just basically followed himaround like the grateful dead.
Only it was the celtic versionof that.
Of course, I'm sure everybody'sfirst question is did you run
into rosie o'donnell while youwere?
Not?
I did not.
I'm sure that's the, I'm surethat's the first question that
everybody's asking.
Uh, but you got some top threemoments for, uh, while you're
(38:43):
over there.
You said you've been over thereseveral times and this was
still the best.
Give us, uh, give us a rundownman, give us your it, your
itinerary.
What, what happened?
Speaker 1 (38:50):
Well, this is an old Michael Duke's finer things
segment.
One of the one of the myfavorite things that you ever
did was your, was your finerthings program, that that that
talked about, talked about.
You know the things that placesto eat, places to go, places to
see, places to stay, right.
So this, this is a.
This is a.
(39:11):
This is a michael duke's finerthing segment.
Um, I've been to ireland a lot,uh over my life, um, and I've
done it several different ways.
Uh, sometimes I've gone overand I've just rented a car and
driven myself around.
Basically, I've sort of set theagenda by where bands that I
want to hear are playing, andI've just sort of wandered
(39:32):
around the country, going frommusic festival to music festival
in the summer.
That's one way I've done it.
Another way I've done it is togo on various tours that are set
up as musical tours and theykick off and every night there's
music and somebody comes in andplays.
(39:53):
You have a tour guide, you havea tour director who is a
musician themselves.
They arrange for othermusicians Irish musicians to
come in and play and and and you, you get music every night and
then during the day you sort oftour the country.
You see castles and you seedifferent things about Ireland.
This one was different.
(40:14):
This tour was different in thisrespect.
The tour guide, the tourdirector, was Ciaran Casey who,
for those who follow Irish music, was one of the original
members of the band Sullis backin the 1990s.
A great Irish musician who hasIrish singer, who's gone on and
done several things.
(40:34):
But Karen is interested notonly in the music but she's also
interested in the history.
She's dug into the history ofIreland and one of the things
that I've missed about either Adoing it by myself or B doing it
through the music tours, hasbeen digging into the history.
I'm really fascinatedparticularly by the early 1900s
(40:58):
segment of Irish history theEaster Rising of 1916, the Civil
War or the War of Independencefrom 1919 to 1921, and then the
Civil War that followed the Warof Independence, which it was
Irishman against Irishman andI've never quite understood that
.
But this tour was great becauseKaren not only is a great
(41:21):
singer, not only a greatmusician and not only did she
bring in musicians on the tour,but we also had three or four
academic quality graduatelectures on Irish history,
particularly on the Irishhistory of the early 1900s.
To understand that you had todig into, you had to go back in
(41:45):
Irish history quite a ways, andthese lectures did, and some of
the tour was visiting thesevarious locations that were
important to Irish history.
But to me, the great thing aboutit was we combined the music
and the culture with this sortof focus on the history.
That's not for everybody, youknow.
(42:06):
Some people want to focus ondifferent things, but but I, my
point is that there is really,if you, if you look for it and
you spend enough timeresearching it, you're going to
find a tour for whatever it isyou you want to do, what you,
what you want to learn aboutabout Ireland.
If you want music all the time,there's tours for that.
If you want just to go aroundfrom castle to castle, there's
(42:29):
tours for that.
If you want to go around fromcity to city, from shopping
center to shopping center,there's tours for that.
But what this really broughthome to me is if you dig deep
enough and if you follow enough,if you understand what people
are trying to accomplish, enoughyou can get into.
You can find a tour that reallyhits all of your hits, all of
(42:50):
your buttons, and that's that'swhat this tour did for me Great
country, great people, greatmusic.
This was as much a foodie touras it was a music tour, because
Ireland also has great foodthese days.
You have to dig a little bit tofind it, but it also has a
great food uh, great food, greatuh.
(43:11):
Great views, great uh, uh, uhuh.
Geological uh uh, things to to,things to do and things to see,
um, but, but at the core, youcan find a tour that does
whatever it is you want.
Speaker 2 (43:27):
So when Terry, finally, you know, prevails on
you Michael it's not that Idon't want to go to Ireland, man
, it's not that I don't want togo there.
Um, well, name, you know I'mI'm curious about the cause.
The food thing is definitelypart of the finer things.
For those of you who don't know, it was a podcast that I did.
I think there's still 12 or 14episodes up on iTunes or
(43:49):
wherever it's at.
You can go back and listen toit.
It was one of my kind of mypassion projects that I just I
ran out of time and money to do,where we went around to various
areas in Alaska and the PacificNorthwest and we visited them
and interviewed different peopleand talked about how did they
get started, and it was just, itwas fun, it was really
enjoyable.
I, too, enjoy the history ofhow people get started and
(44:11):
things like that, but you knowIreland would be that would
definitely be bucket list stufffor that.
You talk about food.
What was you know?
I don't know if I think oftraditional Irish fare.
You know I mean my wife does,we do the corned beef, obviously
, and the shortbread and all thethings, the hot cross buns,
(44:31):
those kind of things, but whatwas the things that stuck out to
you?
What is traditional Irish farein your mind?
Speaker 1 (44:40):
So Ireland is an island right, and there's a huge
amount of fishing that goes onfrom Ireland, and so the seafood
was frankly it is, it is everbit the equal I'm going to get
in trouble for this, but it isevery bit the equal of the
seafood that we have in Alaska.
I love Alaska seafood and I andI eat a lot of seafood, but the
(45:02):
Irish seafood was every bit theequal of that.
So you had some great seafoodrestaurants.
Ireland typically was thebreadbasket, the beef
breadbasket for England.
One piece of history the Irishfamine in the 1850s was a famine
and it was the failure of thepotato crop, which is what the
(45:22):
Irish people relied on.
But they were growing a lot ofbeef, they were growing a lot of
other vegetables for export toGreat Britain, and the famine
was not because Ireland didn'thave food.
They did.
It's just that the British kepttaking, the English kept taking
the food that was traditionallyexported to them and the crop
(45:43):
that the food source that theIrish relied on potatoes failed
and that's what triggered thefamine.
But Irish beef has always beena favorite of mine.
I've got a couple of steakhousesin the country that I always go
to whenever I'm over there andand the Irish beef was good and
lamb.
So you, so you think aboutIreland and and a lot of the
(46:04):
country is is cheap.
I mean a lot of wool, theygenerate a lot of wool, but as a
consequence of that you have alot of lamb, and so lamb is also
a wonderful, a wonderful dishover there, and you can find
restaurants that have aselection of the of the three of
seafood, you know, beef and andlamb.
Or you can find restaurantsthat focus on one of those great
(46:28):
potato dishes, other vegetables, but it's those big three
seafood, because it's a bigfishing country, beef, because
that's historically what they'vedone a lot of, and lamb.
Speaker 2 (46:43):
I love me a good mutton dish.
I'll tell you, it's not oftenthat we get a chance to have
that around here anymore, butthat's good stuff.
Where do you recommend startingoff in Ireland?
Is there a good primer?
Is there a good starting thingbefore we get two minutes here?
Speaker 1 (47:02):
Well, you have to just look up Irish tours and
start digging down through that.
Or if you have a favorite Irishperformer, a favorite Irish
singer, see if they lead a tourand start trying to dig into
that.
Ireland's basically there'sfour different parts.
There's the South, which iscentered around Cork.
There's the West, which iscentered around Galway.
(47:23):
There's the East, which iscentered around Dublin, and
there's the North, which is moreor less centered around Belfast
, although there's still thedivision between Northern
Ireland and the Republic ofIreland in the North.
But there's four differentregions.
They generally emphasizedifferent things.
There's a lot more history,particularly around the early
(47:45):
1900s, the period that I've beenfocused on.
There's a lot more historyaround cork than there is
perhaps elsewhere in the country.
But you just start digging in.
I mean there's Wild AtlanticWay tours is one, there's Inish
Free Music Tours is another, andjust start with those and then
(48:08):
just start digging in from there.
Another, and just start withthose and then just start
digging in, digging in fromthere.
Or you can go on your own, buthave some focus when you're
doing that.
Say, you're going to go toGalway and you're going to go to
Cork and you're going to go toDublin.
Speaker 2 (48:19):
Say you're going to follow a certain musician around
.
All right.
Well, I'm looking forward.
I mean, you know me, I wouldhave to do the whiskey, the
Jameson's, the Irish whiskeytour as well.
On top of all that, it would be, uh, it'd be an amazing time.
Well, brad, like you said, youleft and it was a mess, and you
came back and it was a mess.
We can go away for five yearsand come back and it would still
(48:43):
be.
I mean, this is what happensevery time when I, you know, at
the end of the year, when I goon vacation, I come back and
it's everything's still there,all the problems still there,
all the things still there.
I mean, going back to Frank'squestion, how do we change the
mindset of the legislature?
I don't know.
I mean, at this point I used tothink we could change the
(49:05):
players and that would do it.
I just don't even know, man.
I just don't even know.
You know, man, I just don'teven know.
Speaker 1 (49:09):
You know that's a question.
I'm sure you put it to him, butthat's a question for Rob Myers
.
I mean, that's a question forsomebody who's inside dealing
with these issues, albeit in theminority Senate minority, but
inside dealing with these issuesand trying to figure out, you
know, how you make your waythrough the morass that's the
(49:29):
legislature to get somethingthat makes more, that makes more
sense.
I'm not I.
I, I'm not I.
You know we've been doing thisfor however long we've been
doing it, we've never solved it.
So I think that's a questionfor you know, for somebody who's
on the inside trying to dealwith these issues.
Speaker 2 (49:50):
Yeah, I mean at this point, I just you know, I know
that a lot of these people I'msure that they believe I don't I
don't ascribe like evil toeverybody you know, or anything.
I know some people are likethat, that feel that way.
I think that these people thinkthat in their heart of hearts
they're doing the right thing,but I just don't see how, in the
big picture, they can continueto think that what they're doing
is sustainable and will workout in the end, especially based
(50:11):
on the history of what'shappened so far.
You can't keep doing the samething that you've been doing for
the past 30 years and expectthat it's going to turn out
differently.
Speaker 1 (50:20):
Yeah, and one of the problems and again, I think Rob
would be a much bettercommentator on this than I am
but one of the things thatstrikes me as I look at this
stuff is it's always just get methrough this session.
I'll be better next session, butjust get me through this
session.
Or, in the case of Gary Stevens, just get me to retirement and
if I need to raid the permanentfund, you know that'll be fine,
(50:43):
it'll get me through the end ofthe session.
It's just there's not anoverarching long-term view, and
that's where the governor comesin.
I mean, the governor is elected, in my view, to have that
overarching long-term view, tohave that plan, to have that
vision.
Thank you, that vision thatwe're working toward and you
(51:06):
know, I'm sure Governor Dunleavyhas a vision.
I'm just not sure what it isand I'm not sure it's relevant
to what's going on in thelegislature.
So that's, I mean, to me thatis where the process could be
helped a lot by having agovernor with a consistent
(51:28):
vision who is going to step inthe battles and fight those
battles.
Speaker 2 (51:34):
I think the first step would be to have a governor
that doesn't have largeraspirations, right?
I mean, it would be interestingto have a governor who'd be
like I'm willing to just do oneterm.
If I'm only here for one term,that's fine.
I'll make as big a mess as Ican to try and solve the
problems.
As you said, I mean, thegovernor could have vetoed the
whole budget when it was upagainst it.
(51:54):
He could have vetoed the wholebudget.
He could have taken a strongstand and and Dunleavy's checked
out.
Dunleavy, I mean, he got calledout by James Kaufman, of all
people, the other day for notengaging and not being part of
the whole thing.
You know, just like not notbeing there, um, and whether
he's planning on running forSenate or what.
I don't know what he's planningon, but he you just can't.
(52:15):
He has an inordinate amount ofpower in all the States.
The governor of Alaska is oneof the strongest executive
positions in the entire countryand yet he has done virtually
nothing, um, uh, other thanpropose some real mealy mouth
budgets and everything else.
It's, it's frustrating to watch.
Speaker 1 (52:35):
He's absolutely done nothing.
I mean, the budget this yearproves that.
The budget this year showeddeficits, showed running out of
the constitutional budgetreserve, draining the
constitutional budget reserve.
About four years in and nothingbut red numbers from from there
on out.
And he, and that's what hesubmitted.
The statute says you have tosubmit a balanced budget.
He didn't.
(52:55):
He just ignored it and kept ongoing.
So he's absolutely done nothingin terms of providing vision
for where this state ought to begoing.
One could say or Bill Walkerwould probably say in his
defense he was that governor whostepped in and agreed to do and
, you know, made the harddecisions in that one term.
(53:17):
Problem is Walker made thewrong decisions.
Problem is Walker ultimatelytook the easy road out and took
the PFD because that's where thepolitical forces, the top 20%,
the oil companies and thenon-resident industries wanted
to take it from, because thatprotected them.
So you have to have a governorwho's not only willing to get in
(53:38):
the battle but you have to havea governor whose heart is in
the right place in terms offighting these battles, and
maybe that's asking more than isout there, but we'll keep
looking, but that's that's partof where this starts Having a
leader, having a governor whowill drive these issues home,
who will, who will veto whennecessary and send them back to
(54:01):
the drawing board when necessary.
That's that's, I think, part ofwhere this starts.
Speaker 2 (54:06):
Well, and Frank points out the problem with this
mindset.
He says so, if I'm correct,no-transcript.
Speaker 1 (54:35):
Yeah, yeah, If you look at Trump, I mean, if you
look at Trump, I don't think wego back to the same old, same
old after after Trump.
I don't think.
I don't think there is a sameold, same old to go back to.
It's, everything's going to be.
You know, we're going to be in52.
It's going to be a game of 52pickup and somebody's going to
have to sort of put some ofHumpty Dumpty back together
again.
But I don't think you go backto the to the same old, same old
.
So if you have a governor whodoes that sort of thing, I think
(54:57):
I think we break the mold andgo forward.
Speaker 2 (54:59):
Yeah, I would agree.
I think if we change thedirection of the momentum, that
is what we do.
All right, well, brad KeithleyAlaskans for Sustainable Budgets
the weekly top three next weekMaybe we should include a
positive segment.
Speaker 1 (55:15):
every week I'll just have to travel more to do that.
Speaker 2 (55:19):
That's your mandate.
Thank you, brad, appreciate youcoming on board.
We're out of time.
Speaker 1 (55:25):
Well, that's a wrap for another week's edition of
the weekly top three fromAlaskans for Sustainable Budgets
.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
SoundCloud, Spotify and Substackpages, and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,Managing Director of Alaskans
for Sustainable Budgets.
(55:46):
We look forward to you joiningus again next week for the next
edition of the Weekly Top Three.
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