May 13, 2025 • 55 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 May 12, 2025.
This week, our top 3 issues are these: 1) we explain why Alaska’s current fiscal dilemma reminds us of a game of chicken and what it will take to resolve it (2:04); 2) we discuss what role the Governor should play in resolving the dilemma and why Governor Dunleavy’s actions are lacking (18:34); and 3) we discuss how the failure to resolve the dilemma is adversely affecting Alaska’s private sector business climate and confidence level (38:11).
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 May 12, 2025.
The weekly top three is aregular segment on the Michael
Dukes Show.
The show broadcasts on bothFacebook Live and YouTube Live
(00:32):
as well as via streaming audiofrom the show's website.
Weekdays from 6 to 8 am.
I join Michael weekly in thefirst hour of Tuesday's show
from 6.10 to 7 am for adiscussion between the two of us
about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:54):
soundcloud, spotify and Substackpages.
Also on the Alaskans forSustainable Budgets website, as
well as the project's page onnational 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
(01:15):
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 why
Alaska's current fiscal dilemmareminds us of a game of chicken
(01:38):
and what it will take toresolve it.
Second, we discuss what rolethe governor should play in
resolving the dilemma and whyGovernor Dunleavy's actions are
lacking.
And third, we discuss how thefailure to resolve the dilemma
is affecting Alaska's privatesector, business climate and
(01:59):
confidence level.
Speaker 2 (02:20):
And now let's join Michael, the stuff from the
governor.
The latest it's like somepeople just discovered that
we're in a crisis and everythingelse.
I guess we'll start off withthe fiscal game of chicken.
And you said the news minorblinked.
Tell me what you mean by that.
What's going on?
Speaker 1 (02:39):
Well, increasingly over the last couple of years,
I've been viewing our fiscaldilemma as a game of chicken,
with those who are taking aposition that we have to have a
full PFD and cut spending on oneside and those who take the
position that no, we need tokeep spending and we need to
(03:02):
take it through PFD cuts on theother side and just sort of both
of them heading toward thiscrash that we'll talk about in
the second segment.
Both of them sort of headingtoward this crash and seeing who
blinks.
And for those who want toincrease spending, they sort of
view it from the top and theydon't really care, I don't think
(03:24):
, where the money comes from forthe spending.
They just want the money tocome from the spending and
they're looking at it aswherever it's easiest to get it
from, they'll take it.
So you've got these two forcesthose who want to cut the PFD to
fund spending and those whowant to cut spending to fund the
PFD just sort of heading towardeach other in a game of chicken
(03:49):
.
And the question is, in anygame of chicken, who blinks, who
pulls off, who diverts, whogets out of the way?
And it's been interesting towatch the various players in the
game over the course of thelast several years and watch
(04:09):
who's blinking and who's pullingaway and who's saying no, I
will give up on my side and letthe other side have it.
The news minor is the latest toblink, probably a minor player
in the scheme of things, butthey're the latest to blink.
And they have had an editorialthat says welcome to the PFD
(04:31):
that's headed welcome to the PFDwars a full dividend or a
functioning state.
And they define the battle asthat, as either you're going to
have a full PFD If you're goingto have a full PFD, you're going
to have to cut spending andyou're not going to have a
functioning state.
And so, from their standpoint,the perspective seems to be we
(04:55):
need to cut the PFD and pay forgovernment through PFD cuts.
And this whole editorial isreally a rationalization of why
they're blinking and why they'resaying no, we need to cut the
PFD in order to fund government.
They sort of accept like youwant in a game of chicken, I
(05:19):
suppose they sort of accept thepremise that there's not a third
way, what there is when younormally have, when you normally
are able to resolve a game ofchicken successfully, you find a
third way.
You find it's not all this way,not all you know cutting the
spending or it's not all cuttingthe PFD.
There's a third way.
(05:41):
And the third way in this casewould be coming up with an
alternative source of revenuesto cutting the PFD.
And normally in a game ofchicken you have people who are
trying to find that third waybut the news miner goes all in
basically and sort ofrationalizes away the third way
that we're not going to be ableto get to.
(06:02):
The third way we're not goingto be able to have a resolution
of this short of somebodycrashing.
And so, in their opinion, theforce that ought to win is the
force that proposes morespending at the expense of the
PFD.
And it's always interesting towatch these rationalizations
(06:26):
spin out as people try tojustify their position on this
particular conflict.
They begin with a brief historyof the brief history quote or
colon, the PFD's originalpurpose, and everybody has their
(06:48):
take that fits their particularargument, their take on what
the PFD's original purpose.
But the Newsminer now, theoriginal purpose that the
Newsminer comes up with was itwas intended sort of as a
temporary thing when we had asurplus, but now the surplus has
(07:08):
gone away.
It's no longer viable and it'sconsistent with the history to
take it away.
Then they have a subheading,the 2025 reality check, which is
we are coming to the crashpoint and the next subheader is
the full PFD fallacy, that is,that we can't have a full PFD
(07:29):
because, of course, we have todeflect, we have to drive the
PFD off the road because we haveto keep spending, and then the
final subheader is what comesnext.
The question isn't whether thePFD should exist.
It's whether we, as Alaskans,are ready to make hard choices
about what matters most.
Do we want a smaller dividendand strong public services, or a
(07:52):
larger dividend in a threadbarestate?
It's time to stop pretending wecan have it all.
Speaker 2 (07:58):
I just can't with these guys.
I can't with these guys.
I mean, have they just not read?
All you have to do is go backand read the statements in the
minutes of the formation of thePFD.
All you have to do is go backand read Hammond's works on
diapering the devil.
He talks exactly why he didwhat he did, why he pushed that.
I mean, they, they, theydiscuss it on the floor.
This is not some kind ofamorphous.
(08:18):
Oh, let's guess why they didthis.
Speaker 1 (08:26):
It was not a short-term deal.
That was not.
I mean, I can't even with thesepeople, but it would get in the
way.
It would get in the way oftheir rationalization if they
had, if they actually went backand tried to do an actual
history on why the PFD gotcreated.
It would just get in the way oftheir rationalization.
So they don't go through allthat.
They just say, oh well, it'sintended as temporary.
You know, it was put in the wayof their rationalization.
So they don't.
They don't go through all that.
(08:47):
They just say, oh well, it'sintended as as as as temporary.
You know, it was put in thestatute.
It wasn't put in theconstitution, which I've heard
that argument before.
You know, back then we thoughtstatutes meant something.
I guess.
I guess we should have beenomniscient and known that
statutes didn't mean anything,but it's, but it's, but it's.
It's a rationalization.
But the thing that reallystrikes me about this op-ed and
(09:08):
others, when people in the gameof check-in decide which way
they're going to divert off theroad, is that you don't look for
a third way.
It's either got to be one wayor the other.
It can't be the middle ground.
It's got to be one way or theother.
And so, from the news minerstandpoint, it's got to be that
(09:28):
we cut the PFD in order to keepspending, in order to avoid
having a quote threadbare stateand keep pushing forward on
spending, and thus we need touse PFD cuts to fund that
spending.
And I find it, you know, thisgame of chicken is just is is,
(09:49):
you know, it's it's who blinksfirst, and the top 20%,
non-residents, non-residentindustries, the tourism and
fishing and and the oil industryare all counting on, you know,
those supporting the PFD toblink and to and to pull off to
the side of the road so they cankeep right on going through,
don't have to contribute towardthe cost of government, they can
(10:09):
keep right on going through.
And I think that, and those whowant to increase spending, as we
saw in yesterday's vote on thedefined pension, they don't want
to, they're not going to blink,they don't think they should
blink, they just keep on, theyjust keep on going.
And so you have people whoought to know better, who ought
to be concerned about 80% ofAlaska families, who ought to be
(10:31):
concerned about middle andlower income Alaska families.
They're blinking and they'repulling off to the side of the
road and letting the forces ofspending and the forces of
protecting the top 20% whilethey're spending win the game.
And I just it's disturbing.
I mean the news minor, the newsthe editorial boards of the
(10:54):
papers ought to be thoughtfulenough to say look, there's a
third way.
We don't need to be crashingthese cars into each other.
We don't need to be saying it'sall one way or the other way.
We don't need to be saying it'sall one way or the other way.
We don't need to be rewritinghistory.
We need to look for a way thatresolves this situation in a way
that avoids the crash.
(11:14):
But the news minor has gone allin, it seems, on avoiding the
crash by giving up on middle andlower income Alaska families
and diverting the car away fromprotecting the PFD and letting
the forces that want to spendand protect the top 20%
non-resident in the oil industrywhile they're doing it Just
(11:35):
keep on going.
Speaker 2 (11:36):
Just advocating again for more and more government
spending.
I mean, again, it's shocking tome how many people
organizations, editorial boards,politicians all of a sudden
just discovered that we're in afiscal crisis.
It's like, I mean literally.
I mean even the governor I knowyou're going to get into this
in a little bit, but even thegovernor have you not been
(11:57):
reading your 10-year forecastfor the last five years?
I mean, all of a sudden, it'snow, it's a crisis.
You know in the news, oh, nowit's a crisis, now it's a.
I mean, come on, this has beengoing on for years and the one
thing, what is the one commonthread between all this, is that
we just continue to spend morethan we have.
I mean, I don't know how to bemore plain about it.
(12:19):
That's, that is the onecommonality between this whole.
The problem for the last 30years in this state is that we
have always spent more than wehave, and that's just the one
thing.
They don't even address it.
Hardly any of the stories evenaddress it that this could
potentially be part of the.
I mean as a potential, it mightbe part of the problem right
(12:42):
it's all, just we don't haveenough money.
Speaker 1 (12:45):
Well, the newsbinder certainly doesn't address that
aspect of it.
They don't address the aspectthat we've overspent or we're
overspending on things, or thatwe have to get our spending
house in order as part of this.
To them, it's just a binarydecision.
It's either continue spending,cut the PFD, or continue the PFD
(13:09):
, cut spending.
And we can't cut spendingbecause it will send the state
into some sort of shock.
So it's a very black and white.
What the Newsminer editorialpaints is a very black and white
world, and it's not a black andwhite world, as the Fiscal
(13:33):
Policy Working Group in 2021concluded.
It's a very gray world and toresolve this situation, we need
to deal in the gray.
We need a little bit ofeverything to deal with the
situation.
But the Newsminer doesn't seeit that way and as I read it, it
sort of reinforced myperception that this is all
about a game of chicken andwho's going to blink, and the
(13:54):
Newsminer editorial boardblinked.
Speaker 2 (13:56):
Yeah, absolutely, which, again, not unexpected
from the Newsminer editorialboard and many of the other
editorial boards in the state.
Quite honestly, brad, this isit.
I mean I'd like to say it'sshocking, but it's.
It's really not, but it's justso.
I guess demoralizing at timesto see these people going on and
(14:20):
on and on about how, you know,well, we have a revenue, we just
need more revenue.
And all I could say is have youseen what they've done with all
the revenue we've given themthus far?
I mean starting in 1969 andmoving forward from the time
I've been alive, my entirelifetime.
They got that first check andthey, you know, like it was a
(14:42):
house of fire and they've neverstopped.
They have never, ever stoppedand and nobody has been.
Like you know, maybe we shouldjust, you know, spend what we
have and abide by what thestatutes say and do those kinds
of.
But you know, it's, it's.
It is demoralizing in some waysto think this is the, this is
the same problem.
(15:02):
And you know who knows, maybein 25 years we'll look back and
still have the same problemafter we burn through the PFD
and most of the permanent fundand everything else, and then
we'll be taxing everybody andwe'll still have the same
problem.
I mean, I don't know if thesepeople are going to.
You know, I don't know if theseguys are going to ever figure
it out.
Speaker 1 (15:20):
Well, it's, yeah, it's just.
I mean, it's a stare downcontest or a game of chicken, or
however you want to put it, andthey're just waiting for the
other guy to blink.
I mean, I mean, you knowyesterday's vote on the defined
benefit, how we're going tospend this and, and we need to
spend it.
We have to spend it and we'regoing to spend it, and, but it's
(15:43):
going to come at the expense ofsomebody.
It's going to come at theexpense of somebody.
It's going to come at theexpense of middle and lower
income alaska families in termsof, in terms of pfd cuts.
But we have to do it andthere's no, there's, there's no
compromise about this.
It's either one side wins orthe other side wins, and, and
the news minor just reinforcesthat and says, yep, it's one
side wins or the other side wins, and we're gonna, and we're
(16:04):
gonna give up and and let sidewins or the other side wins, and
we're going to give up and letthe other side win.
We're going to let the otherside, the forces of spending and
the forces of avoiding payingfor it, through on the top 20%
non-resident oil companies.
We're going to let them win.
And it's just.
You know, every time I see oneof these, my mind goes back to
(16:24):
the fiscal policy working groupwho worked through these issues
and deserves a lot of credit forfinding a middle way through
these issues and finding a wayto resolve these issues in a way
that doesn't that spreads theburden amongst everybody,
including spending cuts and aspending cap, that works through
(16:46):
these issues in a way thatavoids the crash and avoids a
game of chicken where one guyhas to go off the road or one
guy ends up going off the roadand when I see the news, minor
just taking sides now basicallyand saying, yeah, we give up,
we're going to drive our car offor we're going to drive the PFD
car off the road, those whowant to spend, those who want to
(17:07):
protect the top 20%, etc.
We're going to let them win thegame.
What help is that?
I mean you're destroying onepart of the state, you're
destroying the underpinnings formiddle and lower income Alaska
families in order to dosomething else and there's just
no sense that we have to find amiddle ground, reinforcing that.
Speaker 2 (17:30):
we have to find a middle ground, destroying the
private economy as well, becauseit's all basically goes back to
the government.
Now, chris and I normally agreeon most of the things he says,
but I disagree with this.
He says why do we still talkabout the fiscal policy working
group Like it was a real effort,fake news, pure theater to
(17:51):
create the appearance of doingthe people's work?
I disagree.
I talked in depth with many ofthe people who were part of that
and it was a knockdown, dragout struggle because it was such
a dimor, you know, dichotomousgroup of you know left and right
and chamber and or bothchambers and everything.
I mean they worked really hardto try and find something that
would work and it was acompromise.
So I disagree with that.
I think it was a good plan.
Um, the problem is nobodywanted to implement.
(18:13):
Uh, in the end nobody was happywith any of the pieces outside
of the working group and thenthe working group itself really
didn't push much on it after themeeting itself.
I don't think it was fake news.
I think it was just too painful.
It was the truth and it was toopainful for people to pick up
on.
They just didn't want to doanything with it.
(18:33):
Brad Keithley Alaskans forSustainable Budgets.
The weekly top three continuesthis morning as we go on.
We were talking about the biggame of chicken and now we move
over to how's the governor'stiming doing.
How's he, if you're going torank him, how's the governor's
time?
I mean, I had to laugh becausethis last Friday governor sends
(18:54):
out this urgent letter.
I'm freezing everything.
I'm doing all this stuffbecause, wow, we've got a crisis
.
And again, all I could think ofwas have you not been reading
your 10-year forecast for thelast five years?
I mean, like this is some bigshot.
It was the same thing that manyof the legislatures.
They all of a sudden, they werepale-faced like oh my God,
(19:14):
we're out of money.
And then the governor nowputting out the second piece
where he sends the letter toEdgeman and company and says we
need to come up with a new, weneed to come up with a group or
a committee that could figure wedid in 2021.
We had a perfect.
It's like, all of a sudden,how's your timing, mike?
I mean it just it seems.
It seems ridiculous to me.
(19:35):
It is.
Speaker 1 (19:37):
I mean, I just look at this session I mean the
governor's, as you've, as youpointed out, the governor's own
10 year plan showed huge holes,showed huge amounts of red.
Having draining through theremainder of the CBR and having
nothing to fit fit in thoseblanks, a huge amount of red
going out, that was, if there'sever been an indication of the
(19:59):
crisis.
It was an indication that thegovernor's giving up.
He's got no revenue plan, he'sgot no spending plan.
He just assumes spendingcontinues.
He assumes that there's norevenue offsetting revenue to
develop it.
He just runs through the CBRand drains it and then there's
red throughout the remainder ofthe 10 year plan.
If there was ever an indicationof a crisis, that was it in his
(20:23):
own 10 year plan.
And yet he, you know he did notdeclare a crisis, then he
didn't declare the, the need todevelop a, a response to it, and
he just, you know, he just letit go.
And then he says things like,well, I'm not going to, I'm not
(20:47):
going to, I'm going to let thelegislature figure this out, I'm
not going to propose revenues.
If the legislature wants todevelop revenues, that's great.
Let them figure it out and I'llconsider it.
Well, then the legislaturewants to develop revenues,
that's great, let them figure itout and I'll consider it.
Well, then the legislature doesthat in a way.
It figures out some portion ofrevenues and now the governor
says, oh well, not those.
(21:08):
I mean I'm going to let youfigure it out, but then when you
figure it out, I'm going to saynot those and tell you I'm
going to veto those.
So it's just, it is odd timing.
I think the best chance we had,chris notwithstanding, I think
(21:30):
the best chance we had fordealing with this was when the
fiscal policy working group cameout.
And I think the governor atthat point should have backed it
up and said okay, it's adifficult situation, the
legislature has named thiscommittee, named this commission
to look at it.
They developed a solution.
It's not perfect for anybody,but it's a good middle of the
(21:53):
road compromise.
I'm going to back it up and I'mgoing to have legislation that
follows through on it.
But he didn't do that.
He just sort of, you know, saidjust let it sort of drift off
in the night when Ben Carpenterproposed individual bills that
would implement pieces of thefiscal policy working group in
the Ways Committee, ways andMeans Committee last legislature
(22:15):
.
It would have been great, itwould have been useful, it would
have been fulfilling his roleIf the governor said yep, I'm
not, you know, this isn'tperfect, but it's a good
compromise of all the situations.
I'm going to back Ben'slegislation the legislation
that's in the Ways and MeansCommittee and I'm going to put
my weight behind trying to passit.
(22:36):
But he didn't do that.
He just let it sort of sit outthere and let it get picked off
a piece at a time, because itwas individual packages as
opposed to a comprehensivepackage.
He let it get picked off apiece at a time.
So his timing has been horriblethroughout all this.
(22:57):
And now we get to the pointwhere oil prices are dropping
again and we're facing asituation where we don't have
much in the CBR and everybody'sstarting to have to confront the
fact that we don't have muchleft in the CBR.
And we are confronting thisfiscal situation, but late in
(23:17):
the session, after everybody'sworked through these situations,
all of a sudden, yeah, we needa fiscal commissioner, we need
to work together to try to finda solution to it.
Well, we were there once before.
We were there in 2021.
So maybe we get there again.
Maybe the governor participatesthis time.
(23:38):
Maybe the governor backs it upthis time and maybe next session
you know he supports or in aspecial session.
If it comes to that he supports, you know the principles that
people come up with.
I mean, I don't know if Benwould say this, but at least
from the outside, looking in,every time you stand up, every
(24:01):
time a legislator has stood upand said look, we need to come
to a comprehensive solution.
We need to, we need to, we needeverybody needs to give a
little bit.
We need to have a spending cap,we need to cut spending, we
need to have some alternativerevenues, we need to modify the
restructure of the PFD a littlebit down to POMV 50-50.
Everybody needs to give alittle bit.
Every time a legislator sort ofgoes out there and does that
(24:28):
something that you would thinkthe governor would be supportive
of because of what the governorsaid at various times,
something you think the governorwould be supportive of, you
sort of turn around I mean fromBen's standpoint.
Again, looking at it from theoutside, from Ben's standpoint,
you sort of turn around.
The governor's not there, right?
He's off in some otherdimension, and so you're sitting
there by yourself taking slingsand arrows that the governor
(24:49):
ought to be backing you up onRight, and you just sort of
disappear.
So you know, yeah, maybe he'sserious this time.
Maybe we'll figure it out thistime.
Maybe he'll stick around longenough in the state to work it
out.
Maybe he'll stick around longenough in the state to back it
up, but looking at history, hesure as hell hasn't done that to
this point.
Speaker 2 (25:09):
Well, and I guess in Dunleavy's defense he attempted
to do this with his first budgetwhen Donna Ardwin was there and
uh, and of course he got thehell kicked out of him, right.
And then I had to laugh becauselast week in the press
conference Bert Stedman saidwell, you know, we really hope
the governor comes back with abudget next year where he's cut.
You know, he's made thesuggested cuts to the thing.
(25:30):
And I'm like he did that andyou guys rained hell on him
because he proposed to cut 8% ofI don't think it was 8%, but he
proposed to make these cuts.
And you guys said it was theapocalypse.
I mean this is come on.
I mean now it's the governor's,it's his shell game of blame
(25:52):
back and forth.
Like I said, everybody and MiaCostello said something the
other day about well, nobodyliked parts of it.
Well, you're right, that's thelegitimate scheme of any
compromise.
Is the fact that everybody isunhappy with some part of it,
right?
Of course nobody's going to behappy.
Nobody's going to want to bethe bad guy to say, no, I'm
sorry, your program's gone, orthere's no money for that, or
(26:13):
I'm sorry, we can't do this.
That's the thing.
Everybody is in avoidance mode,trying to avoid the pain of
being the person that does it.
The governor tried it, gotkicked and now he's like a
whipped dog.
He spent the last you knowseven years as a whipped dog on
this deal and it's just come on,guys, get with the program.
If we don't do something, it'sgoing to be catastrophic.
Speaker 1 (26:35):
That's the thing do something, it's going to be
catastrophic.
That's the thing it is.
And people don't like parts ofit.
And so we go back to the firstsegment.
I mean, it's like this game ofchicken right, who's going to
blink?
And the people that want tocontinue spending, the people
that don't want to pay for itthemselves, those in the top 20%
(26:55):
non-resident oil industry,those who want to continue
spending but not pay it forthemselves, just keep barreling
down the road thinking that theother side is going to blink.
And then you get stuff like theFairbanks News Minor editorial
that blinks, and so that sort ofreinforces them.
Yes, we'll just keep pressingdown the road.
Compromise yeah, we'll talkabout it, but then we'll just
(27:17):
keep pressing down the road.
It takes good faith, it takesparticipation from both sides,
but it also takes the guys onyour side backing you up when
you do it.
And when Ben and others on thefiscal policy working group made
those compromises and then Benproposed the pieces on the House
side and the Ways and MeansCommittee.
(27:38):
It takes your guys backing youup to make sure that, to push it
through.
And I think what Ben found againlooking from the outside I'm
not going to speak for Ben.
But again, looking from theoutside, I think what he found
was he put it out there.
He took the stuff in the fiscalpolicy working group and put it
out there, and put it in billswith his name on it, including
(28:00):
the sales tax, the ultrabroad-based sales tax.
Put it out there and then whenhe looked around, nobody was
there.
All these guys had said we needto compromise, we need to come
to some solution.
Ben put it out, ben took whatthe fiscal policy working group
did, put it out there and theneverybody else was off doing
something else, including thegovernor.
(28:21):
So maybe the governor sticksaround this time.
Maybe the governor actuallygoes through with it this time.
Maybe the governor actuallyfinally puts the sales tax that
he talked about in 2023, I thinkit was puts the sales tax that
he talked about on the table,and so we have alternative
revenues to deal with instead ofPFD cuts, and then we have the
(28:45):
spending cap and then we havethe other components and maybe
the governor backs it up thistime.
But this sort of I mean you saidyou were sick of the circus
this sort of it's important,then it's not.
It's important, then it's not.
It's important, then it's not,it's important, then get out
there, front for it, uh, put itall together and then, and then
you know, don't leave you justgoing off someplace else, that's
(29:07):
sort of.
That's sort of in and out, inand out, in and out.
Just you know, nobody trusts itanymore, nobody trusts the
system anymore as in.
And it's emboldening againgoing back to the game of.
And it's emboldening againgoing back to the game of
chicken.
It's emboldening them who thinkthat they can continue spending
and not bear a portion of thecost the top 20% non-resident in
(29:29):
the oil industry not bear aportion of the cost.
It's emboldening them to thinkthat they're winning the game of
chicken and they just keepshoving and shoving and shoving
and shoving and shoving, with,you know, those on the other
side not pushing back very hard.
Speaker 2 (29:43):
Well, and I guess that was again one of the more
frustrating things is to watchpeople like Ben do the hard work
, try and get what they did tothe floor, and then to watch the
rest of the fiscal policyworking group that you know
members most of the members werestill in panel, were still
elected, were still there and towatch them kind of go.
Oh yeah, that's nice.
(30:03):
You just stand there all byyourself and again going back to
the governor's original planthat he put out with Donna, and
you know you had legislatorslike yes, yes, yes, oh, except
for that, don't, don't cut my.
You know you had legislatorslike yes, yes, yes, oh, except
for that, don't cut my.
You know the Delaina Johnson'sdon't cut my ag, or don't cut
this or I just she was the firstone to pop in mind, but there
(30:24):
are plenty of other Republicanswho are like, oh well, no, you
can cut, but just don't cut mybackyard, don't go cut.
Everybody's going to feel thepain.
I mean, everybody's got to feelthe pain If we're going to fix
it.
It's the same problem we haveat the national level.
Everybody's got to feel thepain and nobody wants to do it.
Uh, nobody wants to be the badguy that they.
(30:47):
They want to be the ones thattake all the accolades for
giving all the stuff.
They don't want to be the badguys that say, well, now you're
cutting what you know.
Well, sorry, well, sorry.
They're not trying to explainreality to these people.
Speaker 1 (30:58):
They just want to be the heroes that give all the
projects and the monies and theprograms, but not the ones that
say, hey, we've got to befiscally responsible and we're
not going to get to a solution,Michael, we're not going to get
to a solution until the governorbacks it up forcefully and says
look, if we don't do this, ifwe don't find some common ground
(31:23):
, if we don't enact the fiscalpolicy working group or if we
don't enact whatever newcompromise people come up, if we
don't do this, then, like Trumpor like Elon Musk, I'm going to
start cutting stuff.
I'm going to start withholdingfunds.
I'm going to start until thegovernor shows that he's willing
(31:45):
to play chicken too, and he'swilling to barrel down the road
just like the other guys are.
Until he shows he's willing todo that, I'm not sure we're
going to get.
I'm not sure we're going to getto a resolution.
He tried that in 2019.
He wasn't successful, but butthings have gotten worse since
then, and so the question is ishe willing to try it again?
Is he willing to stand up again?
Speaker 2 (32:07):
Well, and he's a lame , he's lame duck.
So I don't understand why youwouldn't, at that point, grab
the bull by the horns and sayI'm going to be the one that
saves the state and frame itthat way I'm going to save the
state and maybe he's got higheraspirations, you know.
It would really show Alaskansthat he's got the chutzpah to do
the job, to take the reins ofthe state finances and to try
and fix it.
He could have spent the lastthree and a half years trying to
(32:29):
fix it and instead he's justkind of absent, I mean just
really absent, and then againcoming in at the last minute and
signing oh, we got to freeze.
It makes no sense at all.
I agree with Terry.
I mean, if Dunleavy ran foranother office, I absolutely
would not vote for him.
No, he'd be the last guy that Iwould vote for, just based on
his track record here.
(32:50):
I mean, that's the thing.
Yes, I understand you took alicking over the 2019 budget you
had.
Yes, I understand you took alicking over the 2019 budget.
I understand that.
I understand that was painfuland you felt like you were again
kind of a whipped puppy.
I understand.
But now you've been elected,you've got four years.
You're not coming back.
Why not?
Why not be the hero?
(33:11):
Why not?
Why put these pie in the skythings with carbon credits and
all, and then unbalanced budgetswhere you draw big money from
the CBR with no fiscal plan andthen act like shocked, shocked.
I tell you that, uh, thatthere's a crisis that, like you,
haven't been reading your ownreports that have been coming
out for years.
I just I don't understand it.
That at all.
(33:31):
I just do not understand themindset at all.
Speaker 1 (33:35):
Yeah, it's a, it's a minimalist, it's it's it's do do
nothing.
I mean it's not, it's not do noharm, it's just do nothing.
Um, the.
You know, the rumor is thatthat he's setting out to run
against Lisa.
Uh, in whatever cycle that twoyears after his terms, over 20,
28, I guess, um, and he'ssetting up to run against Lisa
(33:57):
and and he doesn't.
He wants to, you know, be theTrump supported conservative
candidate running against Lisa.
He and he wants to act like youknow, he, he didn't pass, he
didn't endorse taxes.
Um, he.
Speaker 2 (34:12):
Then act like Trump.
Then act like Trump, go inthere and cut, go in there with
a chainsaw and get the JavierMalay thing.
I mean, just go in there and doit.
I mean that's the thing.
If you sure you've already gotthe president's endorsement,
you've already got his, you knowhis ear why not go in there and
and buy into that full on andsay we're doing it, we're
creating a you know, a doge forAlaska.
Speaker 1 (34:32):
We're doing because I mean, I would guess, because
his advisors would remind him,or his own mind reminds him of
2019, when he did that and healmost got himself impeached.
And I would guess that he'ssaying, oh, I just want to steer
(34:54):
this course that doesn't get mein trouble with anybody, and I
want to get through my eightyears and set myself up to be
Trump-like and set myself up torun against Lisa.
That's what everybody wants meto do.
That's what Trump wants me todo.
That's why I'm getting all thishigh profile from Trump.
That's why I didn't getappointed to an office or a
cabinet position.
(35:14):
It's because everybody's tryingto set me up to run against
Lisa and I don't want to doanything that pisses anybody off
.
So I don't want to do all these, all these cuts on the other
side.
And if that's the attitude, ifthat's the attitude he's got, we
don't get this result.
Yeah, I mean the added.
The attitude is give me aheadline every once in a while
that I'm talking about it.
I least recognize it's outthere by things like this, like
(35:37):
the latest memo I issued, andI'll you know, I'll you know
I'll be able to say later yes, Irecognize and I tried and you
know I did these things.
But if the attitude is, I don'twant to go back to what I tried
to do in 2019, I don't want to.
I don't want to play the gameof chicken by running down the
road and saying we're going todo it this way, then I'm not
(35:58):
sure we ever get this resolved.
Speaker 2 (35:59):
Let's change gears for a quick second.
We've got about two and a halfminutes.
I see that Hillcorp has justbought up another player in the
Cook Inlet, which I mean theyalready have the majority.
They almost own all of it,right?
I mean they own the lion'sshare of everything.
Is that dangerous in your mind?
I mean to have one player thatyou have to negotiate with and
(36:20):
they hold all the cards.
At this point, I mean, does itget more tough?
Speaker 1 (36:29):
uh, in this regard, I was just thinking about it as I
read the article this morning.
What's your thoughts?
Yeah, monopolies are tough.
Uh, we shot we.
We saw it last session whengeisel tried to.
Geisel and others tried toclose the hillcorp loophole and
hillcorp essentially threatenedthe cook inlet with with no
development.
If, uh, if the legislature uhwent through it and the
legislature backed down becausehillcorp essentially threatened
the Cook Inlet with nodevelopment.
If the legislature went throughit and the legislature backed
down because Hillcorp's in amonopoly position, yeah,
(36:50):
monopolies are bad, that's whywe have laws against them.
The current purchase of thisminor interest down in the lower
Kenai isn't a problem, it's avery small interest.
Lower Kenai isn't a problem,it's a very small interest.
The big issue currently isHillcorp's proposed acquisition
of the Kenai LNG plant,marathon's Kenai LNG plant, and
if they have control not only ofCook Inlet production but also
(37:13):
Cook Inlet imports, lng importsas they would, if they're
successful in that purchase ofthe unqualified purchase of
Kenai LNG plant, that's going tobe a real problem.
I mean, what we're setting upfor is we are going to have some
competition coming in in theform of LNG and that's not
perfect competition, but atleast it's some competition to
(37:36):
keep Hillcorp from having atotally monopoly position.
But Hillcorp's the one who'sproposed to buy the Kenai LNG
plant.
There are ways to deal withthat.
I wrote a column about it a fewweeks ago, the ways to deal
with that.
But that's the problem, notthis little minor acquisition
they're doing down in the lowerKenai.
The problem is the proposedacquisition of the Kenai LNG
(37:58):
plant.
Speaker 2 (38:00):
Well, it'll be interesting to watch.
I guess we should get thepopcorn out again.
It's much more fun to watchwhen it's a movie and not when
you're living it.
That's the uh, that's the.
That's the problem right now.
Okay, uh, continuing now withbrad keith lee alaskans for
sustainable budgets we're allover the place this morning, but
I gotta tell you, it's uh, Imean, I just I just I'm shaking
(38:22):
my head, just wonder what'sgoing to happen next.
So, brad, a quick check, a gutcheck here on the Alaska economy
and on the on the privateeconomy specifically, and I know
you're going to talk a littlebit about that US News and World
Report finding, which we talkedabout yesterday quite a bit,
(38:44):
where Alaska is again in theback of the pack, 49th out of 50
on many different things.
But the fiscal situation andthe economy is a big chunk of
that.
Tell me, give me your check onthe business climate here and
the economy in Alaska.
Speaker 1 (39:03):
So this is sort of the culmination of the first two
segments, right?
The first segment is we'replaying this game of chicken.
Second segment is Dunleavy'snot doing anything about it, or
when he does, he doesn't back itup, he just sort of throws it
out there and then walks away.
And the third segment thissegment is the consequence of
that, and the consequence ofthat is that we're beginning to
(39:25):
see this deterioration inbusiness confidence and in the
state's economic position.
The headline that sort ofbrought me to this is in the ADN
from earlier this week is inthe ADN from earlier this week.
The headline is Survey ofAlaska's Small Businesses Shows
(39:46):
Dramatic in quotes, dramaticConfidence Drop as Political
Uncertainty Grew.
Now most of this, most of thearticle, is about the tariffs
and the potential impact ofTrump's tariffs on Alaska in
terms of creating higher costfrom imports and reducing the
(40:11):
demand for Alaska products likefish and other things.
The mining reducing the demandfor that as a result of the
tariffs and the concern that iscreating in the Alaska business
community about this crunchbetween higher costs and lower
(40:33):
sales.
That's most of what the articletalks about, but there is
something else going on inaddition to that.
I think we would be seeing thissort of problem even if we
hadn't had the tariffs, thissort of growing problem even if
we hadn't had the tariffs.
And part of that is picked upby the US News and World Report
(40:56):
survey Alaska ranks I justpicked the Peninsula Clarion
headline.
Alaska ranks 49th ahead of onlyLouisiana in US News and World
Reports annual best statessurvey and the reason that I use
the Peninsula is because theyhad the chart at the top of the
article how Alaska ranks amongstates in US News and World
(41:17):
Reports annual.
And the part I went to quicklywas fiscal stability Alaska
ranked in 2018.
It's got the various categoriesthat US News World Report ranks
and it's got Alaska's rank init in those categories as it
(41:41):
goes along.
Fiscal stability here's theranks In 2018, alaska ranked
47th.
In 2019, alaska ranked 48th.
In 2021, alaska ranked first.
And the reason Alaska rankedfirst was the survey finally
sort of caught up with the factthat we'd started diverting the
(42:03):
PFD to fund government and thatwe were taking care of
government spending.
We were funding governmentspending in some way through PFD
cuts.
Us in Alaska knew we werefunding it through PFD cuts but
we were funding governmentspending, so it looked like
Alaska, was very fiscallyresponsible.
No taxes, no obvious taxes,nothing that we labeled a tax.
(42:25):
Pfd cuts are taxes, but nothingthat we labeled a tax and we
were continuing to meet budgetwithout talking about
significant cuts in spending.
So in 2021, alaska ranked first.
2023, alaska is down to 33rd.
2024, alaska is back up to 21st.
2025, alaska is down at 44thand I think what we're seeing is
(42:53):
a recognition that Alaska'sfiscal stability is
deteriorating quickly and we'reseeing a recognition that that
has consequences to the businesscommunity, certainly in terms
of uncertainty, because thebusiness community really
doesn't know where we're goingto go as a state.
(43:13):
None of us know where we'regoing to go as a state with
respect to this uncertainty.
Are we going to continue totake money out of the private
economy by pulling money out ofmiddle and lower income Alaska
families through PFD cuts?
Are we going to have taxes?
Are we going to have highertaxes on the oil industry?
Are we going to finally taxnon-residents?
Just the uncertainty.
(43:34):
Are we going to cut spendingdown to moderate spending, down
to the level that we can affordit?
Just the uncertainty that wehave about that at the state
level, I think is feeding intothe confidence concern also that
we're seeing showing up in thesurvey that the small business
(43:55):
group did, the small businessconfidence survey that they did.
So I think we're seeing sort ofthe culmination.
The first thing we talked abouttoday was this game of chicken
coming at each other.
The second thing was Dunleavynot trying to stop the game of
chicken, not trying to find athird way, not stepping in and
(44:17):
saying this is important toAlaska, we need to resolve it
Just sort of flitting in and out, sort of depending upon how it
affects his 2020, here we goagain how it affects his 2028
election prospects against Lisa.
Sort of flitting in and outabout that.
(44:39):
And the third thing, then, iswe're seeing it show up in the
business community in terms oflack of confidence and in terms
of a drop in Alaska's ratingamong the states, because we
don't have this resolved, wedon't have our fiscal situation
resolved.
Speaker 2 (44:55):
Right.
Well, and this was a questionfor Mark Sabatini of the Juneau
Empire and the Peninsula Clarionat the press conference last
week to the Senate majorityleadership you know, what do you
think of Alaska being 49th,just ahead of Louisiana?
And they had no, it was likethe birds and, you know, like
the deer in a headlight kind ofmoment, where they were like, oh
(45:16):
well, you know, alaska's greatIt'd be.
Just, they don't care about theprivate economy.
That's the thing.
They don't care.
What care about the privateeconomy?
That's the thing.
They don't care.
What happens to the privateeconomy, they don't care if we
show up as 49th or 50th or 51stout of 50.
They don't care, because aslong as they've got their money
in their programs, they're okaywith it.
Speaker 1 (45:35):
That's what it comes down to well, and to some degree
they they think they are theprivate economy.
I mean, we, we've heardlegislators say that, you know,
alaska, it's important to havethis spending or that spending
because that's what drives theeconomy, that's what keeps the
economy going.
A lack of recognition thatthere is a private economy that
needs to be addressed.
And so they think they are theeconomy and they just need to.
(46:00):
They think they need to keeppulling in more and more funds
and spending more and more toaddress it.
It's sort of the same thing,michael, as out-migration.
Remember, out-migration was abig issue a couple of years ago.
It was at the start of thesession.
Everybody was talking aboutout-migration and how they had
great solutions to it.
But the solutions were, youknow, as we discovered when we
(46:24):
did the analysis, it's themiddle and lower income Alaska
families that are out migratingand the solutions were to make
to take steps to help bolstertheir economic position, bolster
the economic position of middleand lower income Alaska
families.
And I think, as that dawned onthe legislators, they said, well
, there's nothing we can doabout that.
And so you haven't heard,you've heard people barely talk
(46:52):
about out migration this sessionbecause that's a private
economy thing.
They think they don't have anyeffect on the private economy,
so why talk about it?
And it's sort of the same thingwith respect to business
confidence.
They think the only solution tobusiness confidence is for them
to spend more.
It's not.
It's for them to take less outof the private economy and let
the private economy have moreresources for itself.
Speaker 2 (47:15):
I would dare to guess that probably 70 to 80 percent
of the legislature believes thatthe economy can only be driven
by government spending.
That that's it, that there'sjust no.
They have to be there, theyhave to be part of it, otherwise
the economy just won't.
And again to them, that is likeyou said, I think in their
minds that is the economy.
There is no public, private.
It is the economy and it's allgovernment.
(47:37):
And that's a.
That's a shame.
Speaker 1 (47:44):
Down to the last minute here, brad.
Final thoughts Well, I thinkit's all part of the same thing.
I think the fact that we'replaying chicken with our fiscal
policy, I think the fact thatgovernor won't step in and back
up people who are trying to getto a compromise on fiscal policy
, and I think the lack ofbusiness confidence that's
showing up is all part of thesame thing.
Showing up is all part of thesame thing.
(48:06):
We've gone on long enough withan uncertain fiscal policy that
is now affecting the privatesector of the economy in ways
that are bad, and we're seeingit show up in these various
reports.
Speaker 2 (48:16):
Something you said resonated here a little bit ago.
I don't know if it was duringthe break or what, but when you
basically said I don't know ifit was during the break or what,
but when you, you know,basically say I don't know if we
, I don't know if we solve this,I don't know if I mean, do we
have to hit that?
I mean we were talking theother day do we just embrace it?
Do we just embrace every bit ofspending and just say go ahead,
spend it all, put it all inthere, do it all, and just
(48:38):
accelerate the crash until itactually happens?
Um, or Accelerate the crashuntil it actually happens, or
you know, I don't know, I don'tknow what the solution is there.
But you know we can't continuethe way we are.
And now, of course, kathy Gieselat the last meeting was pushing
on the combining of the ERA andthe corpus.
I mean, that's the next bigtarget, right is to get that big
(48:59):
pot of money.
So I mean, do we see some kindof fiscal crash?
Or will they try and sell that?
And Alaskans will be sodesperate and there'll be so
many people out there who are,you know, like the news, the
daily news you know, had onthere who are like oh, tax me
harder daddy.
(49:20):
I mean they just, you know, isthat what they want?
They'll be like oh sure meharder daddy.
I mean they just you know, isthat what they want?
They'll be like oh sure,combine them, because we just
don't want to just give us moregovernment.
Give us more, I mean, is that Idon't understand.
Speaker 1 (49:40):
Well, I think the only thing that's going to
resolve this game of chicken tothe benefit of the Alaska
economy, to the benefit ofmiddle-income Alaska families,
to the benefit of the privatesector Alaska economy, I think
the only thing that's going toresolve it is to find some sort
of compromise, because the gameof chicken right now, the game
of chicken if you look at theFairbanks News minor op-ed as an
(50:03):
indicator the game of chickenis being won by those who are
saying spend more, spend more,spend more, take it out of the
pockets of middle and lowerincome Alaska families.
Just keep on going down thisroad.
And, geisel, take it out of thecorpus, just keep on going down
this road and that's who'swinning this game.
Just keep on going down thisroad and that's who's winning
(50:24):
this game.
So if the response to that isstop spending, stop spending,
full PFD, cut spending, ifthat's the only response to it,
we're seeing, I think that thatloses the game of chicken.
Fairbanks Newsminer gave up, thegame of chicken.
(50:47):
Fairbanks Newsminer gave up andI think we're seeing that the
game of chicken is going to bewon by those who just keep
forcing more spending.
I think the only way to resolveit is to find some compromise.
And to go back to the thingthat Chris discounts, the 2021
Fiscal Policy Working Groupfound principles of compromise
and I think that we've got tofind a way to enforce that,
(51:10):
because I don't think the gameof chicken is just going to end
up in a big crash For theprivate economy, for private
confidence in the economy.
I think it's just going to endup in a big crash and I don't
think it's a winnable position.
So what I think we ought to bedoing is concentrating on
finding a compromise, and thegovernor ought to be stepping in
(51:33):
and forcing hands at efforts,at that compromise.
If we don't do it, I, I, I'mincreasingly I mean, it's not
just the news miners, just otherthings I pick up I'm
increasingly pessimistic thatwe're going to resolve this
situation in a way that's to thebenefit of middle income Alaska
(51:55):
families and to the privatesector of Alaska economy.
Speaker 2 (51:58):
Hey, Donna Ardwin is in the chat room.
Hello, donna, ben Carpenter wasright about everything.
Yeah, I mean he was.
I mean we don't disagree.
In fact, ben Carpenter is goingto be on the show tomorrow to
talk with us, give us a recap ofhis take on everything that's
happening this year.
He's going to be with ustomorrow morning.
It's in the 6 o'clock hour.
(52:19):
But you're right, he was rightabout everything.
The fiscal policy working groupwas right about everything.
That was a pretty contentious,cantankerous kind of group of
people who didn't agree, but inthe end they all unanimously.
When you get Jesse Keel and abunch of folks on a big
government on the left agreeingwith you know, ben Carpenter and
(52:41):
Mike shower and andauer andKevin McCabe and those on the
right, when they come togetherand say, okay, it's not great,
but this is what we've got, thisis the best that we can come up
with, this is the bestcompromise, and then everybody
just ignores it.
What do you expect, what?
What are you?
I guess you know.
What do you?
Is it going to get any better?
(53:07):
I don't, I just I can't see howthis is going to survive.
Speaker 1 (53:08):
Well, Ben didn't ignore it.
I mean, Ben, Ben put thosebills in.
We had the ways and meanscommittee.
What, what again?
You know what happened, though.
When Ben looked around, therewas nobody there.
The governor wasn't there, youknow, some of his fellow
legislators weren't there.
They, everybody sort of wentoff and started playing the game
of chicken again, and so theeffort to find a resolution of
this in the middle someplace,recognizing that both sides have
(53:33):
some justification in theirpositions, the effort to find
some resolution just crateredand the game of chicken
continued.
And the game of chicken isincreasingly being won by those
who want to press for morespending and avoid the private
economy.
We need to recognize it'shaving an effect on business
confidence.
We need to recognize it'shaving an effect on things that
(54:11):
are important to Alaska and thensort of back up and say, okay,
we recognize that we need to getto a resolution, the governor
needs to be involved in it andwe need to stop playing the game
of chicken and we need to cometo some sort of third way, third
way resolution.
Speaker 2 (54:25):
I I hope there's enough time for people to see
this and I hope that there's nota bunch of people out there who
are just like, oh, I'll justpay the tax.
Speaker 1 (54:35):
Or I'm just going to continue to fight to the end to
cut spending to pay for the fullPFD Spending is part of the
overall plan.
That's what it is.
It is, but it's part.
It's not.
We can't do it through allthrough cut spend.
Speaker 2 (54:51):
So I agree with that at this point, because it's
obviously not worked for thelast 25 years.
All right, Brad KeithleyAlaskans for Sustainable Budgets
.
Thanks, Brad, I appreciate it.
Speaker 1 (55:01):
Michael Zois, thanks for having me.
Well, that's a wrap for anotherweek's edition of the Weekly
Top Three from Alaskans forSustainable Budgets.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
soundcloud, Spotify and Substackpages and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,managing Director of Alaskans
(55:22):
for Sustainable Budgets Twitter.
This has been Brad Keithley,managing Director of Alaskans
for Sustainable Budgets.
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 May 12, 2025.
The weekly top three is aregular segment on the Michael
Dukes Show.
The show broadcasts on bothFacebook Live and YouTube Live
(00:32):
as well as via streaming audiofrom the show's website.
Weekdays from 6 to 8 am.
I join Michael weekly in thefirst hour of Tuesday's show
from 6.10 to 7 am for adiscussion between the two of us
about our three issues.
We post the podcast of ourdiscussion following the show on
the Alaskans for SustainableBudgets Facebook, youtube,
(00:54):
soundcloud, spotify and Substackpages.
Also on the Alaskans forSustainable Budgets website, as
well as the project's page onnational 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
(01:15):
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 why
Alaska's current fiscal dilemmareminds us of a game of chicken
(01:38):
and what it will take toresolve it.
Second, we discuss what rolethe governor should play in
resolving the dilemma and whyGovernor Dunleavy's actions are
lacking.
And third, we discuss how thefailure to resolve the dilemma
is affecting Alaska's privatesector, business climate and
(01:59):
confidence level.
Speaker 2 (02:20):
And now let's join Michael, the stuff from the
governor.
The latest it's like somepeople just discovered that
we're in a crisis and everythingelse.
I guess we'll start off withthe fiscal game of chicken.
And you said the news minorblinked.
Tell me what you mean by that.
What's going on?
Speaker 1 (02:39):
Well, increasingly over the last couple of years,
I've been viewing our fiscaldilemma as a game of chicken,
with those who are taking aposition that we have to have a
full PFD and cut spending on oneside and those who take the
position that no, we need tokeep spending and we need to
(03:02):
take it through PFD cuts on theother side and just sort of both
of them heading toward thiscrash that we'll talk about in
the second segment.
Both of them sort of headingtoward this crash and seeing who
blinks.
And for those who want toincrease spending, they sort of
view it from the top and theydon't really care, I don't think
(03:24):
, where the money comes from forthe spending.
They just want the money tocome from the spending and
they're looking at it aswherever it's easiest to get it
from, they'll take it.
So you've got these two forcesthose who want to cut the PFD to
fund spending and those whowant to cut spending to fund the
PFD just sort of heading towardeach other in a game of chicken
(03:49):
.
And the question is, in anygame of chicken, who blinks, who
pulls off, who diverts, whogets out of the way?
And it's been interesting towatch the various players in the
game over the course of thelast several years and watch
(04:09):
who's blinking and who's pullingaway and who's saying no, I
will give up on my side and letthe other side have it.
The news minor is the latest toblink, probably a minor player
in the scheme of things, butthey're the latest to blink.
And they have had an editorialthat says welcome to the PFD
(04:31):
that's headed welcome to the PFDwars a full dividend or a
functioning state.
And they define the battle asthat, as either you're going to
have a full PFD If you're goingto have a full PFD, you're going
to have to cut spending andyou're not going to have a
functioning state.
And so, from their standpoint,the perspective seems to be we
(04:55):
need to cut the PFD and pay forgovernment through PFD cuts.
And this whole editorial isreally a rationalization of why
they're blinking and why they'resaying no, we need to cut the
PFD in order to fund government.
They sort of accept like youwant in a game of chicken, I
(05:19):
suppose they sort of accept thepremise that there's not a third
way, what there is when younormally have, when you normally
are able to resolve a game ofchicken successfully, you find a
third way.
You find it's not all this way,not all you know cutting the
spending or it's not all cuttingthe PFD.
There's a third way.
(05:41):
And the third way in this casewould be coming up with an
alternative source of revenuesto cutting the PFD.
And normally in a game ofchicken you have people who are
trying to find that third waybut the news miner goes all in
basically and sort ofrationalizes away the third way
that we're not going to be ableto get to.
(06:02):
The third way we're not goingto be able to have a resolution
of this short of somebodycrashing.
And so, in their opinion, theforce that ought to win is the
force that proposes morespending at the expense of the
PFD.
And it's always interesting towatch these rationalizations
(06:26):
spin out as people try tojustify their position on this
particular conflict.
They begin with a brief historyof the brief history quote or
colon, the PFD's originalpurpose, and everybody has their
(06:48):
take that fits their particularargument, their take on what
the PFD's original purpose.
But the Newsminer now, theoriginal purpose that the
Newsminer comes up with was itwas intended sort of as a
temporary thing when we had asurplus, but now the surplus has
(07:08):
gone away.
It's no longer viable and it'sconsistent with the history to
take it away.
Then they have a subheading,the 2025 reality check, which is
we are coming to the crashpoint and the next subheader is
the full PFD fallacy, that is,that we can't have a full PFD
(07:29):
because, of course, we have todeflect, we have to drive the
PFD off the road because we haveto keep spending, and then the
final subheader is what comesnext.
The question isn't whether thePFD should exist.
It's whether we, as Alaskans,are ready to make hard choices
about what matters most.
Do we want a smaller dividendand strong public services, or a
(07:52):
larger dividend in a threadbarestate?
It's time to stop pretending wecan have it all.
Speaker 2 (07:58):
I just can't with these guys.
I can't with these guys.
I mean, have they just not read?
All you have to do is go backand read the statements in the
minutes of the formation of thePFD.
All you have to do is go backand read Hammond's works on
diapering the devil.
He talks exactly why he didwhat he did, why he pushed that.
I mean, they, they, theydiscuss it on the floor.
This is not some kind ofamorphous.
(08:18):
Oh, let's guess why they didthis.
Speaker 1 (08:26):
It was not a short-term deal.
That was not.
I mean, I can't even with thesepeople, but it would get in the
way.
It would get in the way oftheir rationalization if they
had, if they actually went backand tried to do an actual
history on why the PFD gotcreated.
It would just get in the way oftheir rationalization.
So they don't go through allthat.
They just say, oh well, it'sintended as temporary.
You know, it was put in the wayof their rationalization.
So they don't.
They don't go through all that.
(08:47):
They just say, oh well, it'sintended as as as as temporary.
You know, it was put in thestatute.
It wasn't put in theconstitution, which I've heard
that argument before.
You know, back then we thoughtstatutes meant something.
I guess.
I guess we should have beenomniscient and known that
statutes didn't mean anything,but it's, but it's, but it's.
It's a rationalization.
But the thing that reallystrikes me about this op-ed and
(09:08):
others, when people in the gameof check-in decide which way
they're going to divert off theroad, is that you don't look for
a third way.
It's either got to be one wayor the other.
It can't be the middle ground.
It's got to be one way or theother.
And so, from the news minerstandpoint, it's got to be that
(09:28):
we cut the PFD in order to keepspending, in order to avoid
having a quote threadbare stateand keep pushing forward on
spending, and thus we need touse PFD cuts to fund that
spending.
And I find it, you know, thisgame of chicken is just is is,
(09:49):
you know, it's it's who blinksfirst, and the top 20%,
non-residents, non-residentindustries, the tourism and
fishing and and the oil industryare all counting on, you know,
those supporting the PFD toblink and to and to pull off to
the side of the road so they cankeep right on going through,
don't have to contribute towardthe cost of government, they can
(10:09):
keep right on going through.
And I think that, and those whowant to increase spending, as we
saw in yesterday's vote on thedefined pension, they don't want
to, they're not going to blink,they don't think they should
blink, they just keep on, theyjust keep on going.
And so you have people whoought to know better, who ought
to be concerned about 80% ofAlaska families, who ought to be
(10:31):
concerned about middle andlower income Alaska families.
They're blinking and they'repulling off to the side of the
road and letting the forces ofspending and the forces of
protecting the top 20% whilethey're spending win the game.
And I just it's disturbing.
I mean the news minor, the newsthe editorial boards of the
(10:54):
papers ought to be thoughtfulenough to say look, there's a
third way.
We don't need to be crashingthese cars into each other.
We don't need to be saying it'sall one way or the other way.
We don't need to be saying it'sall one way or the other way.
We don't need to be rewritinghistory.
We need to look for a way thatresolves this situation in a way
that avoids the crash.
(11:14):
But the news minor has gone allin, it seems, on avoiding the
crash by giving up on middle andlower income Alaska families
and diverting the car away fromprotecting the PFD and letting
the forces that want to spendand protect the top 20%
non-resident in the oil industrywhile they're doing it Just
(11:35):
keep on going.
Speaker 2 (11:36):
Just advocating again for more and more government
spending.
I mean, again, it's shocking tome how many people
organizations, editorial boards,politicians all of a sudden
just discovered that we're in afiscal crisis.
It's like, I mean literally.
I mean even the governor I knowyou're going to get into this
in a little bit, but even thegovernor have you not been
(11:57):
reading your 10-year forecastfor the last five years?
I mean, all of a sudden, it'snow, it's a crisis.
You know in the news, oh, nowit's a crisis, now it's a.
I mean, come on, this has beengoing on for years and the one
thing, what is the one commonthread between all this, is that
we just continue to spend morethan we have.
I mean, I don't know how to bemore plain about it.
(12:19):
That's, that is the onecommonality between this whole.
The problem for the last 30years in this state is that we
have always spent more than wehave, and that's just the one
thing.
They don't even address it.
Hardly any of the stories evenaddress it that this could
potentially be part of the.
I mean as a potential, it mightbe part of the problem right
(12:42):
it's all, just we don't haveenough money.
Speaker 1 (12:45):
Well, the newsbinder certainly doesn't address that
aspect of it.
They don't address the aspectthat we've overspent or we're
overspending on things, or thatwe have to get our spending
house in order as part of this.
To them, it's just a binarydecision.
It's either continue spending,cut the PFD, or continue the PFD
(13:09):
, cut spending.
And we can't cut spendingbecause it will send the state
into some sort of shock.
So it's a very black and white.
What the Newsminer editorialpaints is a very black and white
world, and it's not a black andwhite world, as the Fiscal
(13:33):
Policy Working Group in 2021concluded.
It's a very gray world and toresolve this situation, we need
to deal in the gray.
We need a little bit ofeverything to deal with the
situation.
But the Newsminer doesn't seeit that way and as I read it, it
sort of reinforced myperception that this is all
about a game of chicken andwho's going to blink, and the
(13:54):
Newsminer editorial boardblinked.
Speaker 2 (13:56):
Yeah, absolutely, which, again, not unexpected
from the Newsminer editorialboard and many of the other
editorial boards in the state.
Quite honestly, brad, this isit.
I mean I'd like to say it'sshocking, but it's.
It's really not, but it's justso.
I guess demoralizing at timesto see these people going on and
(14:20):
on and on about how, you know,well, we have a revenue, we just
need more revenue.
And all I could say is have youseen what they've done with all
the revenue we've given themthus far?
I mean starting in 1969 andmoving forward from the time
I've been alive, my entirelifetime.
They got that first check andthey, you know, like it was a
(14:42):
house of fire and they've neverstopped.
They have never, ever stoppedand and nobody has been.
Like you know, maybe we shouldjust, you know, spend what we
have and abide by what thestatutes say and do those kinds
of.
But you know, it's, it's.
It is demoralizing in some waysto think this is the, this is
the same problem.
(15:02):
And you know who knows, maybein 25 years we'll look back and
still have the same problemafter we burn through the PFD
and most of the permanent fundand everything else, and then
we'll be taxing everybody andwe'll still have the same
problem.
I mean, I don't know if thesepeople are going to.
You know, I don't know if theseguys are going to ever figure
it out.
Speaker 1 (15:20):
Well, it's, yeah, it's just.
I mean, it's a stare downcontest or a game of chicken, or
however you want to put it, andthey're just waiting for the
other guy to blink.
I mean, I mean, you knowyesterday's vote on the defined
benefit, how we're going tospend this and, and we need to
spend it.
We have to spend it and we'regoing to spend it, and, but it's
(15:43):
going to come at the expense ofsomebody.
It's going to come at theexpense of somebody.
It's going to come at theexpense of middle and lower
income alaska families in termsof, in terms of pfd cuts.
But we have to do it andthere's no, there's, there's no
compromise about this.
It's either one side wins orthe other side wins, and, and
the news minor just reinforcesthat and says, yep, it's one
side wins or the other side wins, and we're gonna, and we're
(16:04):
gonna give up and and let sidewins or the other side wins, and
we're going to give up and letthe other side win.
We're going to let the otherside, the forces of spending and
the forces of avoiding payingfor it, through on the top 20%
non-resident oil companies.
We're going to let them win.
And it's just.
You know, every time I see oneof these, my mind goes back to
(16:24):
the fiscal policy working groupwho worked through these issues
and deserves a lot of credit forfinding a middle way through
these issues and finding a wayto resolve these issues in a way
that doesn't that spreads theburden amongst everybody,
including spending cuts and aspending cap, that works through
(16:46):
these issues in a way thatavoids the crash and avoids a
game of chicken where one guyhas to go off the road or one
guy ends up going off the roadand when I see the news, minor
just taking sides now basicallyand saying, yeah, we give up,
we're going to drive our car offor we're going to drive the PFD
car off the road, those whowant to spend, those who want to
(17:07):
protect the top 20%, etc.
We're going to let them win thegame.
What help is that?
I mean you're destroying onepart of the state, you're
destroying the underpinnings formiddle and lower income Alaska
families in order to dosomething else and there's just
no sense that we have to find amiddle ground, reinforcing that.
Speaker 2 (17:30):
we have to find a middle ground, destroying the
private economy as well, becauseit's all basically goes back to
the government.
Now, chris and I normally agreeon most of the things he says,
but I disagree with this.
He says why do we still talkabout the fiscal policy working
group Like it was a real effort,fake news, pure theater to
(17:51):
create the appearance of doingthe people's work?
I disagree.
I talked in depth with many ofthe people who were part of that
and it was a knockdown, dragout struggle because it was such
a dimor, you know, dichotomousgroup of you know left and right
and chamber and or bothchambers and everything.
I mean they worked really hardto try and find something that
would work and it was acompromise.
So I disagree with that.
I think it was a good plan.
Um, the problem is nobodywanted to implement.
(18:13):
Uh, in the end nobody was happywith any of the pieces outside
of the working group and thenthe working group itself really
didn't push much on it after themeeting itself.
I don't think it was fake news.
I think it was just too painful.
It was the truth and it was toopainful for people to pick up
on.
They just didn't want to doanything with it.
(18:33):
Brad Keithley Alaskans forSustainable Budgets.
The weekly top three continuesthis morning as we go on.
We were talking about the biggame of chicken and now we move
over to how's the governor'stiming doing.
How's he, if you're going torank him, how's the governor's
time?
I mean, I had to laugh becausethis last Friday governor sends
(18:54):
out this urgent letter.
I'm freezing everything.
I'm doing all this stuffbecause, wow, we've got a crisis
.
And again, all I could think ofwas have you not been reading
your 10-year forecast for thelast five years?
I mean, like this is some bigshot.
It was the same thing that manyof the legislatures.
They all of a sudden, they werepale-faced like oh my God,
(19:14):
we're out of money.
And then the governor nowputting out the second piece
where he sends the letter toEdgeman and company and says we
need to come up with a new, weneed to come up with a group or
a committee that could figure wedid in 2021.
We had a perfect.
It's like, all of a sudden,how's your timing, mike?
I mean it just it seems.
It seems ridiculous to me.
(19:35):
It is.
Speaker 1 (19:37):
I mean, I just look at this session I mean the
governor's, as you've, as youpointed out, the governor's own
10 year plan showed huge holes,showed huge amounts of red.
Having draining through theremainder of the CBR and having
nothing to fit fit in thoseblanks, a huge amount of red
going out, that was, if there'sever been an indication of the
(19:59):
crisis.
It was an indication that thegovernor's giving up.
He's got no revenue plan, he'sgot no spending plan.
He just assumes spendingcontinues.
He assumes that there's norevenue offsetting revenue to
develop it.
He just runs through the CBRand drains it and then there's
red throughout the remainder ofthe 10 year plan.
If there was ever an indicationof a crisis, that was it in his
(20:23):
own 10 year plan.
And yet he, you know he did notdeclare a crisis, then he
didn't declare the, the need todevelop a, a response to it, and
he just, you know, he just letit go.
And then he says things like,well, I'm not going to, I'm not
(20:47):
going to, I'm going to let thelegislature figure this out, I'm
not going to propose revenues.
If the legislature wants todevelop revenues, that's great.
Let them figure it out and I'llconsider it.
Well, then the legislaturewants to develop revenues,
that's great, let them figure itout and I'll consider it.
Well, then the legislature doesthat in a way.
It figures out some portion ofrevenues and now the governor
says, oh well, not those.
(21:08):
I mean I'm going to let youfigure it out, but then when you
figure it out, I'm going to saynot those and tell you I'm
going to veto those.
So it's just, it is odd timing.
I think the best chance we had,chris notwithstanding, I think
(21:30):
the best chance we had fordealing with this was when the
fiscal policy working group cameout.
And I think the governor atthat point should have backed it
up and said okay, it's adifficult situation, the
legislature has named thiscommittee, named this commission
to look at it.
They developed a solution.
It's not perfect for anybody,but it's a good middle of the
(21:53):
road compromise.
I'm going to back it up and I'mgoing to have legislation that
follows through on it.
But he didn't do that.
He just sort of, you know, saidjust let it sort of drift off
in the night when Ben Carpenterproposed individual bills that
would implement pieces of thefiscal policy working group in
the Ways Committee, ways andMeans Committee last legislature
(22:15):
.
It would have been great, itwould have been useful, it would
have been fulfilling his roleIf the governor said yep, I'm
not, you know, this isn'tperfect, but it's a good
compromise of all the situations.
I'm going to back Ben'slegislation the legislation
that's in the Ways and MeansCommittee and I'm going to put
my weight behind trying to passit.
(22:36):
But he didn't do that.
He just let it sort of sit outthere and let it get picked off
a piece at a time, because itwas individual packages as
opposed to a comprehensivepackage.
He let it get picked off apiece at a time.
So his timing has been horriblethroughout all this.
(22:57):
And now we get to the pointwhere oil prices are dropping
again and we're facing asituation where we don't have
much in the CBR and everybody'sstarting to have to confront the
fact that we don't have muchleft in the CBR.
And we are confronting thisfiscal situation, but late in
(23:17):
the session, after everybody'sworked through these situations,
all of a sudden, yeah, we needa fiscal commissioner, we need
to work together to try to finda solution to it.
Well, we were there once before.
We were there in 2021.
So maybe we get there again.
Maybe the governor participatesthis time.
(23:38):
Maybe the governor backs it upthis time and maybe next session
you know he supports or in aspecial session.
If it comes to that he supports, you know the principles that
people come up with.
I mean, I don't know if Benwould say this, but at least
from the outside, looking in,every time you stand up, every
(24:01):
time a legislator has stood upand said look, we need to come
to a comprehensive solution.
We need to, we need to, we needeverybody needs to give a
little bit.
We need to have a spending cap,we need to cut spending, we
need to have some alternativerevenues, we need to modify the
restructure of the PFD a littlebit down to POMV 50-50.
Everybody needs to give alittle bit.
Every time a legislator sort ofgoes out there and does that
(24:28):
something that you would thinkthe governor would be supportive
of because of what the governorsaid at various times,
something you think the governorwould be supportive of, you
sort of turn around I mean fromBen's standpoint.
Again, looking at it from theoutside, from Ben's standpoint,
you sort of turn around.
The governor's not there, right?
He's off in some otherdimension, and so you're sitting
there by yourself taking slingsand arrows that the governor
(24:49):
ought to be backing you up onRight, and you just sort of
disappear.
So you know, yeah, maybe he'sserious this time.
Maybe we'll figure it out thistime.
Maybe he'll stick around longenough in the state to work it
out.
Maybe he'll stick around longenough in the state to back it
up, but looking at history, hesure as hell hasn't done that to
this point.
Speaker 2 (25:09):
Well, and I guess in Dunleavy's defense he attempted
to do this with his first budgetwhen Donna Ardwin was there and
uh, and of course he got thehell kicked out of him, right.
And then I had to laugh becauselast week in the press
conference Bert Stedman saidwell, you know, we really hope
the governor comes back with abudget next year where he's cut.
You know, he's made thesuggested cuts to the thing.
(25:30):
And I'm like he did that andyou guys rained hell on him
because he proposed to cut 8% ofI don't think it was 8%, but he
proposed to make these cuts.
And you guys said it was theapocalypse.
I mean this is come on.
I mean now it's the governor's,it's his shell game of blame
(25:52):
back and forth.
Like I said, everybody and MiaCostello said something the
other day about well, nobodyliked parts of it.
Well, you're right, that's thelegitimate scheme of any
compromise.
Is the fact that everybody isunhappy with some part of it,
right?
Of course nobody's going to behappy.
Nobody's going to want to bethe bad guy to say, no, I'm
sorry, your program's gone, orthere's no money for that, or
(26:13):
I'm sorry, we can't do this.
That's the thing.
Everybody is in avoidance mode,trying to avoid the pain of
being the person that does it.
The governor tried it, gotkicked and now he's like a
whipped dog.
He spent the last you knowseven years as a whipped dog on
this deal and it's just come on,guys, get with the program.
If we don't do something, it'sgoing to be catastrophic.
Speaker 1 (26:35):
That's the thing do something, it's going to be
catastrophic.
That's the thing it is.
And people don't like parts ofit.
And so we go back to the firstsegment.
I mean, it's like this game ofchicken right, who's going to
blink?
And the people that want tocontinue spending, the people
that don't want to pay for itthemselves, those in the top 20%
(26:55):
non-resident oil industry,those who want to continue
spending but not pay it forthemselves, just keep barreling
down the road thinking that theother side is going to blink.
And then you get stuff like theFairbanks News Minor editorial
that blinks, and so that sort ofreinforces them.
Yes, we'll just keep pressingdown the road.
Compromise yeah, we'll talkabout it, but then we'll just
(27:17):
keep pressing down the road.
It takes good faith, it takesparticipation from both sides,
but it also takes the guys onyour side backing you up when
you do it.
And when Ben and others on thefiscal policy working group made
those compromises and then Benproposed the pieces on the House
side and the Ways and MeansCommittee.
(27:38):
It takes your guys backing youup to make sure that, to push it
through.
And I think what Ben found againlooking from the outside I'm
not going to speak for Ben.
But again, looking from theoutside, I think what he found
was he put it out there.
He took the stuff in the fiscalpolicy working group and put it
out there, and put it in billswith his name on it, including
(28:00):
the sales tax, the ultrabroad-based sales tax.
Put it out there and then whenhe looked around, nobody was
there.
All these guys had said we needto compromise, we need to come
to some solution.
Ben put it out, ben took whatthe fiscal policy working group
did, put it out there and theneverybody else was off doing
something else, including thegovernor.
(28:21):
So maybe the governor sticksaround this time.
Maybe the governor actuallygoes through with it this time.
Maybe the governor actuallyfinally puts the sales tax that
he talked about in 2023, I thinkit was puts the sales tax that
he talked about on the table,and so we have alternative
revenues to deal with instead ofPFD cuts, and then we have the
(28:45):
spending cap and then we havethe other components and maybe
the governor backs it up thistime.
But this sort of I mean you saidyou were sick of the circus
this sort of it's important,then it's not.
It's important, then it's not.
It's important, then it's not,it's important, then get out
there, front for it, uh, put itall together and then, and then
you know, don't leave you justgoing off someplace else, that's
(29:07):
sort of.
That's sort of in and out, inand out, in and out.
Just you know, nobody trusts itanymore, nobody trusts the
system anymore as in.
And it's emboldening againgoing back to the game of.
And it's emboldening againgoing back to the game of
chicken.
It's emboldening them who thinkthat they can continue spending
and not bear a portion of thecost the top 20% non-resident in
(29:29):
the oil industry not bear aportion of the cost.
It's emboldening them to thinkthat they're winning the game of
chicken and they just keepshoving and shoving and shoving
and shoving and shoving, with,you know, those on the other
side not pushing back very hard.
Speaker 2 (29:43):
Well, and I guess that was again one of the more
frustrating things is to watchpeople like Ben do the hard work
, try and get what they did tothe floor, and then to watch the
rest of the fiscal policyworking group that you know
members most of the members werestill in panel, were still
elected, were still there and towatch them kind of go.
Oh yeah, that's nice.
(30:03):
You just stand there all byyourself and again going back to
the governor's original planthat he put out with Donna, and
you know you had legislatorslike yes, yes, yes, oh, except
for that, don't, don't cut my.
You know you had legislatorslike yes, yes, yes, oh, except
for that, don't cut my.
You know the Delaina Johnson'sdon't cut my ag, or don't cut
this or I just she was the firstone to pop in mind, but there
(30:24):
are plenty of other Republicanswho are like, oh well, no, you
can cut, but just don't cut mybackyard, don't go cut.
Everybody's going to feel thepain.
I mean, everybody's got to feelthe pain If we're going to fix
it.
It's the same problem we haveat the national level.
Everybody's got to feel thepain and nobody wants to do it.
Uh, nobody wants to be the badguy that they.
(30:47):
They want to be the ones thattake all the accolades for
giving all the stuff.
They don't want to be the badguys that say, well, now you're
cutting what you know.
Well, sorry, well, sorry.
They're not trying to explainreality to these people.
Speaker 1 (30:58):
They just want to be the heroes that give all the
projects and the monies and theprograms, but not the ones that
say, hey, we've got to befiscally responsible and we're
not going to get to a solution,Michael, we're not going to get
to a solution until the governorbacks it up forcefully and says
look, if we don't do this, ifwe don't find some common ground
(31:23):
, if we don't enact the fiscalpolicy working group or if we
don't enact whatever newcompromise people come up, if we
don't do this, then, like Trumpor like Elon Musk, I'm going to
start cutting stuff.
I'm going to start withholdingfunds.
I'm going to start until thegovernor shows that he's willing
(31:45):
to play chicken too, and he'swilling to barrel down the road
just like the other guys are.
Until he shows he's willing todo that, I'm not sure we're
going to get.
I'm not sure we're going to getto a resolution.
He tried that in 2019.
He wasn't successful, but butthings have gotten worse since
then, and so the question is ishe willing to try it again?
Is he willing to stand up again?
Speaker 2 (32:07):
Well, and he's a lame , he's lame duck.
So I don't understand why youwouldn't, at that point, grab
the bull by the horns and sayI'm going to be the one that
saves the state and frame itthat way I'm going to save the
state and maybe he's got higheraspirations, you know.
It would really show Alaskansthat he's got the chutzpah to do
the job, to take the reins ofthe state finances and to try
and fix it.
He could have spent the lastthree and a half years trying to
(32:29):
fix it and instead he's justkind of absent, I mean just
really absent, and then againcoming in at the last minute and
signing oh, we got to freeze.
It makes no sense at all.
I agree with Terry.
I mean, if Dunleavy ran foranother office, I absolutely
would not vote for him.
No, he'd be the last guy that Iwould vote for, just based on
his track record here.
(32:50):
I mean, that's the thing.
Yes, I understand you took alicking over the 2019 budget you
had.
Yes, I understand you took alicking over the 2019 budget.
I understand that.
I understand that was painfuland you felt like you were again
kind of a whipped puppy.
I understand.
But now you've been elected,you've got four years.
You're not coming back.
Why not?
Why not be the hero?
(33:11):
Why not?
Why put these pie in the skythings with carbon credits and
all, and then unbalanced budgetswhere you draw big money from
the CBR with no fiscal plan andthen act like shocked, shocked.
I tell you that, uh, thatthere's a crisis that, like you,
haven't been reading your ownreports that have been coming
out for years.
I just I don't understand it.
That at all.
(33:31):
I just do not understand themindset at all.
Speaker 1 (33:35):
Yeah, it's a, it's a minimalist, it's it's it's do do
nothing.
I mean it's not, it's not do noharm, it's just do nothing.
Um, the.
You know, the rumor is thatthat he's setting out to run
against Lisa.
Uh, in whatever cycle that twoyears after his terms, over 20,
28, I guess, um, and he'ssetting up to run against Lisa
(33:57):
and and he doesn't.
He wants to, you know, be theTrump supported conservative
candidate running against Lisa.
He and he wants to act like youknow, he, he didn't pass, he
didn't endorse taxes.
Um, he.
Speaker 2 (34:12):
Then act like Trump.
Then act like Trump, go inthere and cut, go in there with
a chainsaw and get the JavierMalay thing.
I mean, just go in there and doit.
I mean that's the thing.
If you sure you've already gotthe president's endorsement,
you've already got his, you knowhis ear why not go in there and
and buy into that full on andsay we're doing it, we're
creating a you know, a doge forAlaska.
Speaker 1 (34:32):
We're doing because I mean, I would guess, because
his advisors would remind him,or his own mind reminds him of
2019, when he did that and healmost got himself impeached.
And I would guess that he'ssaying, oh, I just want to steer
(34:54):
this course that doesn't get mein trouble with anybody, and I
want to get through my eightyears and set myself up to be
Trump-like and set myself up torun against Lisa.
That's what everybody wants meto do.
That's what Trump wants me todo.
That's why I'm getting all thishigh profile from Trump.
That's why I didn't getappointed to an office or a
cabinet position.
(35:14):
It's because everybody's tryingto set me up to run against
Lisa and I don't want to doanything that pisses anybody off
.
So I don't want to do all these, all these cuts on the other
side.
And if that's the attitude, ifthat's the attitude he's got, we
don't get this result.
Yeah, I mean the added.
The attitude is give me aheadline every once in a while
that I'm talking about it.
I least recognize it's outthere by things like this, like
(35:37):
the latest memo I issued, andI'll you know, I'll you know
I'll be able to say later yes, Irecognize and I tried and you
know I did these things.
But if the attitude is, I don'twant to go back to what I tried
to do in 2019, I don't want to.
I don't want to play the gameof chicken by running down the
road and saying we're going todo it this way, then I'm not
(35:58):
sure we ever get this resolved.
Speaker 2 (35:59):
Let's change gears for a quick second.
We've got about two and a halfminutes.
I see that Hillcorp has justbought up another player in the
Cook Inlet, which I mean theyalready have the majority.
They almost own all of it,right?
I mean they own the lion'sshare of everything.
Is that dangerous in your mind?
I mean to have one player thatyou have to negotiate with and
(36:20):
they hold all the cards.
At this point, I mean, does itget more tough?
Speaker 1 (36:29):
uh, in this regard, I was just thinking about it as I
read the article this morning.
What's your thoughts?
Yeah, monopolies are tough.
Uh, we shot we.
We saw it last session whengeisel tried to.
Geisel and others tried toclose the hillcorp loophole and
hillcorp essentially threatenedthe cook inlet with with no
development.
If, uh, if the legislature uhwent through it and the
legislature backed down becausehillcorp essentially threatened
the Cook Inlet with nodevelopment.
If the legislature went throughit and the legislature backed
down because Hillcorp's in amonopoly position, yeah,
(36:50):
monopolies are bad, that's whywe have laws against them.
The current purchase of thisminor interest down in the lower
Kenai isn't a problem, it's avery small interest.
Lower Kenai isn't a problem,it's a very small interest.
The big issue currently isHillcorp's proposed acquisition
of the Kenai LNG plant,marathon's Kenai LNG plant, and
if they have control not only ofCook Inlet production but also
(37:13):
Cook Inlet imports, lng importsas they would, if they're
successful in that purchase ofthe unqualified purchase of
Kenai LNG plant, that's going tobe a real problem.
I mean, what we're setting upfor is we are going to have some
competition coming in in theform of LNG and that's not
perfect competition, but atleast it's some competition to
(37:36):
keep Hillcorp from having atotally monopoly position.
But Hillcorp's the one who'sproposed to buy the Kenai LNG
plant.
There are ways to deal withthat.
I wrote a column about it a fewweeks ago, the ways to deal
with that.
But that's the problem, notthis little minor acquisition
they're doing down in the lowerKenai.
The problem is the proposedacquisition of the Kenai LNG
(37:58):
plant.
Speaker 2 (38:00):
Well, it'll be interesting to watch.
I guess we should get thepopcorn out again.
It's much more fun to watchwhen it's a movie and not when
you're living it.
That's the uh, that's the.
That's the problem right now.
Okay, uh, continuing now withbrad keith lee alaskans for
sustainable budgets we're allover the place this morning, but
I gotta tell you, it's uh, Imean, I just I just I'm shaking
(38:22):
my head, just wonder what'sgoing to happen next.
So, brad, a quick check, a gutcheck here on the Alaska economy
and on the on the privateeconomy specifically, and I know
you're going to talk a littlebit about that US News and World
Report finding, which we talkedabout yesterday quite a bit,
(38:44):
where Alaska is again in theback of the pack, 49th out of 50
on many different things.
But the fiscal situation andthe economy is a big chunk of
that.
Tell me, give me your check onthe business climate here and
the economy in Alaska.
Speaker 1 (39:03):
So this is sort of the culmination of the first two
segments, right?
The first segment is we'replaying this game of chicken.
Second segment is Dunleavy'snot doing anything about it, or
when he does, he doesn't back itup, he just sort of throws it
out there and then walks away.
And the third segment thissegment is the consequence of
that, and the consequence ofthat is that we're beginning to
(39:25):
see this deterioration inbusiness confidence and in the
state's economic position.
The headline that sort ofbrought me to this is in the ADN
from earlier this week is inthe ADN from earlier this week.
The headline is Survey ofAlaska's Small Businesses Shows
(39:46):
Dramatic in quotes, dramaticConfidence Drop as Political
Uncertainty Grew.
Now most of this, most of thearticle, is about the tariffs
and the potential impact ofTrump's tariffs on Alaska in
terms of creating higher costfrom imports and reducing the
(40:11):
demand for Alaska products likefish and other things.
The mining reducing the demandfor that as a result of the
tariffs and the concern that iscreating in the Alaska business
community about this crunchbetween higher costs and lower
(40:33):
sales.
That's most of what the articletalks about, but there is
something else going on inaddition to that.
I think we would be seeing thissort of problem even if we
hadn't had the tariffs, thissort of growing problem even if
we hadn't had the tariffs.
And part of that is picked upby the US News and World Report
(40:56):
survey Alaska ranks I justpicked the Peninsula Clarion
headline.
Alaska ranks 49th ahead of onlyLouisiana in US News and World
Reports annual best statessurvey and the reason that I use
the Peninsula is because theyhad the chart at the top of the
article how Alaska ranks amongstates in US News and World
(41:17):
Reports annual.
And the part I went to quicklywas fiscal stability Alaska
ranked in 2018.
It's got the various categoriesthat US News World Report ranks
and it's got Alaska's rank init in those categories as it
(41:41):
goes along.
Fiscal stability here's theranks In 2018, alaska ranked
47th.
In 2019, alaska ranked 48th.
In 2021, alaska ranked first.
And the reason Alaska rankedfirst was the survey finally
sort of caught up with the factthat we'd started diverting the
(42:03):
PFD to fund government and thatwe were taking care of
government spending.
We were funding governmentspending in some way through PFD
cuts.
Us in Alaska knew we werefunding it through PFD cuts but
we were funding governmentspending, so it looked like
Alaska, was very fiscallyresponsible.
No taxes, no obvious taxes,nothing that we labeled a tax.
(42:25):
Pfd cuts are taxes, but nothingthat we labeled a tax and we
were continuing to meet budgetwithout talking about
significant cuts in spending.
So in 2021, alaska ranked first.
2023, alaska is down to 33rd.
2024, alaska is back up to 21st.
2025, alaska is down at 44thand I think what we're seeing is
(42:53):
a recognition that Alaska'sfiscal stability is
deteriorating quickly and we'reseeing a recognition that that
has consequences to the businesscommunity, certainly in terms
of uncertainty, because thebusiness community really
doesn't know where we're goingto go as a state.
(43:13):
None of us know where we'regoing to go as a state with
respect to this uncertainty.
Are we going to continue totake money out of the private
economy by pulling money out ofmiddle and lower income Alaska
families through PFD cuts?
Are we going to have taxes?
Are we going to have highertaxes on the oil industry?
Are we going to finally taxnon-residents?
Just the uncertainty.
(43:34):
Are we going to cut spendingdown to moderate spending, down
to the level that we can affordit?
Just the uncertainty that wehave about that at the state
level, I think is feeding intothe confidence concern also that
we're seeing showing up in thesurvey that the small business
(43:55):
group did, the small businessconfidence survey that they did.
So I think we're seeing sort ofthe culmination.
The first thing we talked abouttoday was this game of chicken
coming at each other.
The second thing was Dunleavynot trying to stop the game of
chicken, not trying to find athird way, not stepping in and
(44:17):
saying this is important toAlaska, we need to resolve it
Just sort of flitting in and out, sort of depending upon how it
affects his 2020, here we goagain how it affects his 2028
election prospects against Lisa.
Sort of flitting in and outabout that.
(44:39):
And the third thing, then, iswe're seeing it show up in the
business community in terms oflack of confidence and in terms
of a drop in Alaska's ratingamong the states, because we
don't have this resolved, wedon't have our fiscal situation
resolved.
Speaker 2 (44:55):
Right.
Well, and this was a questionfor Mark Sabatini of the Juneau
Empire and the Peninsula Clarionat the press conference last
week to the Senate majorityleadership you know, what do you
think of Alaska being 49th,just ahead of Louisiana?
And they had no, it was likethe birds and, you know, like
the deer in a headlight kind ofmoment, where they were like, oh
(45:16):
well, you know, alaska's greatIt'd be.
Just, they don't care about theprivate economy.
That's the thing.
They don't care.
What care about the privateeconomy?
That's the thing.
They don't care.
What happens to the privateeconomy, they don't care if we
show up as 49th or 50th or 51stout of 50.
They don't care, because aslong as they've got their money
in their programs, they're okaywith it.
Speaker 1 (45:35):
That's what it comes down to well, and to some degree
they they think they are theprivate economy.
I mean, we, we've heardlegislators say that, you know,
alaska, it's important to havethis spending or that spending
because that's what drives theeconomy, that's what keeps the
economy going.
A lack of recognition thatthere is a private economy that
needs to be addressed.
And so they think they are theeconomy and they just need to.
(46:00):
They think they need to keeppulling in more and more funds
and spending more and more toaddress it.
It's sort of the same thing,michael, as out-migration.
Remember, out-migration was abig issue a couple of years ago.
It was at the start of thesession.
Everybody was talking aboutout-migration and how they had
great solutions to it.
But the solutions were, youknow, as we discovered when we
(46:24):
did the analysis, it's themiddle and lower income Alaska
families that are out migratingand the solutions were to make
to take steps to help bolstertheir economic position, bolster
the economic position of middleand lower income Alaska
families.
And I think, as that dawned onthe legislators, they said, well
, there's nothing we can doabout that.
And so you haven't heard,you've heard people barely talk
(46:52):
about out migration this sessionbecause that's a private
economy thing.
They think they don't have anyeffect on the private economy,
so why talk about it?
And it's sort of the same thingwith respect to business
confidence.
They think the only solution tobusiness confidence is for them
to spend more.
It's not.
It's for them to take less outof the private economy and let
the private economy have moreresources for itself.
Speaker 2 (47:15):
I would dare to guess that probably 70 to 80 percent
of the legislature believes thatthe economy can only be driven
by government spending.
That that's it, that there'sjust no.
They have to be there, theyhave to be part of it, otherwise
the economy just won't.
And again to them, that is likeyou said, I think in their
minds that is the economy.
There is no public, private.
It is the economy and it's allgovernment.
(47:37):
And that's a.
That's a shame.
Speaker 1 (47:44):
Down to the last minute here, brad.
Final thoughts Well, I thinkit's all part of the same thing.
I think the fact that we'replaying chicken with our fiscal
policy, I think the fact thatgovernor won't step in and back
up people who are trying to getto a compromise on fiscal policy
, and I think the lack ofbusiness confidence that's
showing up is all part of thesame thing.
Showing up is all part of thesame thing.
(48:06):
We've gone on long enough withan uncertain fiscal policy that
is now affecting the privatesector of the economy in ways
that are bad, and we're seeingit show up in these various
reports.
Speaker 2 (48:16):
Something you said resonated here a little bit ago.
I don't know if it was duringthe break or what, but when you
basically said I don't know ifit was during the break or what,
but when you, you know,basically say I don't know if we
, I don't know if we solve this,I don't know if I mean, do we
have to hit that?
I mean we were talking theother day do we just embrace it?
Do we just embrace every bit ofspending and just say go ahead,
spend it all, put it all inthere, do it all, and just
(48:38):
accelerate the crash until itactually happens?
Um, or Accelerate the crashuntil it actually happens, or
you know, I don't know, I don'tknow what the solution is there.
But you know we can't continuethe way we are.
And now, of course, kathy Gieselat the last meeting was pushing
on the combining of the ERA andthe corpus.
I mean, that's the next bigtarget, right is to get that big
(48:59):
pot of money.
So I mean, do we see some kindof fiscal crash?
Or will they try and sell that?
And Alaskans will be sodesperate and there'll be so
many people out there who are,you know, like the news, the
daily news you know, had onthere who are like oh, tax me
harder daddy.
(49:20):
I mean they just, you know, isthat what they want?
They'll be like oh sure meharder daddy.
I mean they just you know, isthat what they want?
They'll be like oh sure,combine them, because we just
don't want to just give us moregovernment.
Give us more, I mean, is that Idon't understand.
Speaker 1 (49:40):
Well, I think the only thing that's going to
resolve this game of chicken tothe benefit of the Alaska
economy, to the benefit ofmiddle-income Alaska families,
to the benefit of the privatesector Alaska economy, I think
the only thing that's going toresolve it is to find some sort
of compromise, because the gameof chicken right now, the game
of chicken if you look at theFairbanks News minor op-ed as an
(50:03):
indicator the game of chickenis being won by those who are
saying spend more, spend more,spend more, take it out of the
pockets of middle and lowerincome Alaska families.
Just keep on going down thisroad.
And, geisel, take it out of thecorpus, just keep on going down
this road and that's who'swinning this game.
Just keep on going down thisroad and that's who's winning
(50:24):
this game.
So if the response to that isstop spending, stop spending,
full PFD, cut spending, ifthat's the only response to it,
we're seeing, I think that thatloses the game of chicken.
Fairbanks Newsminer gave up, thegame of chicken.
(50:47):
Fairbanks Newsminer gave up andI think we're seeing that the
game of chicken is going to bewon by those who just keep
forcing more spending.
I think the only way to resolveit is to find some compromise.
And to go back to the thingthat Chris discounts, the 2021
Fiscal Policy Working Groupfound principles of compromise
and I think that we've got tofind a way to enforce that,
(51:10):
because I don't think the gameof chicken is just going to end
up in a big crash For theprivate economy, for private
confidence in the economy.
I think it's just going to endup in a big crash and I don't
think it's a winnable position.
So what I think we ought to bedoing is concentrating on
finding a compromise, and thegovernor ought to be stepping in
(51:33):
and forcing hands at efforts,at that compromise.
If we don't do it, I, I, I'mincreasingly I mean, it's not
just the news miners, just otherthings I pick up I'm
increasingly pessimistic thatwe're going to resolve this
situation in a way that's to thebenefit of middle income Alaska
(51:55):
families and to the privatesector of Alaska economy.
Speaker 2 (51:58):
Hey, Donna Ardwin is in the chat room.
Hello, donna, ben Carpenter wasright about everything.
Yeah, I mean he was.
I mean we don't disagree.
In fact, ben Carpenter is goingto be on the show tomorrow to
talk with us, give us a recap ofhis take on everything that's
happening this year.
He's going to be with ustomorrow morning.
It's in the 6 o'clock hour.
(52:19):
But you're right, he was rightabout everything.
The fiscal policy working groupwas right about everything.
That was a pretty contentious,cantankerous kind of group of
people who didn't agree, but inthe end they all unanimously.
When you get Jesse Keel and abunch of folks on a big
government on the left agreeingwith you know, ben Carpenter and
(52:41):
Mike shower and andauer andKevin McCabe and those on the
right, when they come togetherand say, okay, it's not great,
but this is what we've got, thisis the best that we can come up
with, this is the bestcompromise, and then everybody
just ignores it.
What do you expect, what?
What are you?
I guess you know.
What do you?
Is it going to get any better?
(53:07):
I don't, I just I can't see howthis is going to survive.
Speaker 1 (53:08):
Well, Ben didn't ignore it.
I mean, Ben, Ben put thosebills in.
We had the ways and meanscommittee.
What, what again?
You know what happened, though.
When Ben looked around, therewas nobody there.
The governor wasn't there, youknow, some of his fellow
legislators weren't there.
They, everybody sort of wentoff and started playing the game
of chicken again, and so theeffort to find a resolution of
this in the middle someplace,recognizing that both sides have
(53:33):
some justification in theirpositions, the effort to find
some resolution just crateredand the game of chicken
continued.
And the game of chicken isincreasingly being won by those
who want to press for morespending and avoid the private
economy.
We need to recognize it'shaving an effect on business
confidence.
We need to recognize it'shaving an effect on things that
(54:11):
are important to Alaska and thensort of back up and say, okay,
we recognize that we need to getto a resolution, the governor
needs to be involved in it andwe need to stop playing the game
of chicken and we need to cometo some sort of third way, third
way resolution.
Speaker 2 (54:25):
I I hope there's enough time for people to see
this and I hope that there's nota bunch of people out there who
are just like, oh, I'll justpay the tax.
Speaker 1 (54:35):
Or I'm just going to continue to fight to the end to
cut spending to pay for the fullPFD Spending is part of the
overall plan.
That's what it is.
It is, but it's part.
It's not.
We can't do it through allthrough cut spend.
Speaker 2 (54:51):
So I agree with that at this point, because it's
obviously not worked for thelast 25 years.
All right, Brad KeithleyAlaskans for Sustainable Budgets
.
Thanks, Brad, I appreciate it.
Speaker 1 (55:01):
Michael Zois, thanks for having me.
Well, that's a wrap for anotherweek's edition of the Weekly
Top Three from Alaskans forSustainable Budgets.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
soundcloud, Spotify and Substackpages and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,managing Director of Alaskans
(55:22):
for Sustainable Budgets Twitter.
This has been Brad Keithley,managing Director of Alaskans
for Sustainable Budgets.
We look forward to you joiningus again next week for the next
edition of the Weekly Top Three.
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