The Weekly Top 3 (9.1.2025)

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 September 1, 2025.

This week, our top 3 issues are these: 1) we explain, using the Permanent Fund Corporation’s own numbers, how its high-cost “active asset management” program is failing Alaskans by badly underperforming even its own Passive Index Benchmark (2:25); 2) we explain why we applaud Senator Mike Cronk’s point that developing a successful K-12 funding plan is contingent on first developing an overall, solid fiscal plan for the state (18:45); and 3) we explain how the recent op-ed’s from gubernatorial candidates Click Bishop and Tom Begich blatantly ignore the central issue facing the next Governor: the huge and continuing current law budget deficits the state is projected to run over the next decade (37:12).

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.

Episode Transcript

Speaker 1 (00:09):
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 September 1st 2025.
The Weekly Top three is aregular segment on the Michael
Duke 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,

(00:55):
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

(01:16):
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
using the Permanent FundCorporation's own numbers, how

(01:39):
its high-cost active assetmanagement program is failing
Alaskans by underperforming evenits own passive index benchmark
.
Second, we explain why weapplaud Senator Mike Kronk's
point that developing asuccessful K-12 funding plan is
contingent on first developingan overall solid fiscal plan for

(02:02):
the state.
And third, we explain how therecent op-eds from gubernatorial
candidates Click Bishop and TomBegich blatantly ignore the
central issue facing the nextgovernor the huge and continuing
current law budget deficits thestate is projected to run over
the next decade.
And now let's join Michael.

Speaker 2 (02:25):
Let's get started.
Uh, brad, we've got a lot ofthings to uh, to crack in about
and uh, we're going to start off, um, with some, with some hot
stuff, a hot take from you onthe permanent fund.
Um, and the permanent fund isuh well, uh, they're not.
They're not doing everything.

(02:46):
They cannot be all they can be.
Let's put it that way, it's abig, big investment for very
little return.
Let's get down to it, shall we?

Speaker 1 (02:54):
Well, michael, this is another in our ongoing series
of the performance of thePermanent Fund Corporation, and
I think it's important tocontinue to differentiate
between the Permanent FundCorporation and the Permanent
Fund, the Permanent FundCorporation and the Permanent
Fund.
The Permanent Fund Corporationis the manager of the fund.
The fund is the $80 billionplus or minus that we've got in
the fund, but the management ofthat fund is by the Permanent

(03:18):
Fund Corporation.
In essence, it's the same as aGoldman Sachs or any of the
other managers of funds, andwe're talking about the
performance.
We've been talking about theperformance of that corporation,
the performance of the managerof the fund, and the reason I
keep going back to this is,frankly, permanent fund returns.

(03:39):
Given the state of play thatwe're in right now, returns on
the permanent fund are moreimportant than oil.
The revenues that we're gettingfrom the POMV draws for the
general fund and for the PFD aregreater than what we're getting

(03:59):
from oil.
Oil.
The future, in terms of growthof where the revenues are coming
from, is bigger for thepermanent fund corporation,
particularly given where oiltaxes are is bigger for returns
from the permanent fund than foroil.
So I keep coming back to thisbecause it's a big deal from the
standpoint of the state'sfiscal situation and the state's

(04:23):
revenue situation.
The development this past weekis that the Permanent Fund
finally published what they calltheir Management Fees and
Expenses Report.
That's a quarterly report thatthey do that totals up the
management fees and expensesthat they've incurred during the

(04:44):
quarter and shows how much it'scosting us to have this active
management that the PermanentFund Corporation keeps claiming
is important and valuable toAlaskans.
How much it's costing us to dothat.
Now I take that report and Iuse it in conjunction with a

(05:06):
monthly report that thePermanent Fund Corporation does
that shows its returns, thereturns that the Permanent Fund
Corporation has managed toachieve on the Permanent Fund.
Compared to some benchmarks thatthe Permanent Fund
Corporation's adopted, one ofthose is particularly important
when you're looking at themanagement fees.

(05:27):
One of those benchmarks iswhat's called the passive index
benchmark, and this is how thepermanent fund corporation
defines or explains the passiveindex benchmark A blend of
passive indices reflective of atraditional portfolio consisting
of public equities, fixedincome and real estate

(05:48):
investments.
Outperformance of the totalfund versus the passive index
benchmark is representative ofthe value added by APFC staff in
generating higher returnsthrough active asset allocation
through active management,active asset allocation through
active management, active assetallocation and portfolio

(06:12):
management.
Let me read that last sentencein reverse because I want you to
understand what I'm going to betalking about Underperformance.
The sentence goesoutperformance of the total fund
versus.
So the reverse of this isunderperformance of the total
fund versus.
This passive index benchmark isrepresentative of the value
destruction by APSE staff ingenerating lower returns through

(06:33):
active asset allocation andportfolio management.
So, just the same way that youcan look at the passive index
benchmark, and if they exceedthe passive index benchmark,
then that is value added throughthe permanent fund
corporation's active management.
If they fall lower than thepassive index benchmark, then

(06:54):
that's indicative of the factthat the active management that
the permanent fund corporationis engaged in is destroying
value, is taking value away, allright.
So let's look at the numbers.
Engaged in is destroying value,is taking value away, all right
.
So let's look at the numbers,and here is just a fascinating

(07:15):
chart.
What this chart does is, yearby year, look at the permanent
fund return that they achieved,the permanent fund corporation's
return that they achieved onassets, versus the passive index
benchmark that we just talkedabout, and then the difference
between is the value added, whatthey said, what they themselves
described.
If it's positive, it's thevalue added compared to the
passive index benchmark,compared to just letting it on

(07:38):
autopilot.
If it's negative, it's thevalue destruction from their
active management compared tothe passive index benchmark,
just putting it on autopilot.
And then, next to that, next tothat column, I've got the
management incentive fees as apercent of assets that the
permanent fund corporation hasspent on this active management,

(07:59):
and then, next to that, is thedollar amount and then you can
look at the value added afterfees and the return on fees.
Here's the thing the last threeyears look at 2023, 2024, and
2025.
The last three years have beennegative.
Consecutively, consecutiveyears have been negative by not

(08:23):
a little bit.
The passive, the permanentfunds return was short of the
passive index benchmark in 2023by 3.6%, was short in 2024 by 4%
and was short in 2025 by 3.84%.
That is the comparison of theirreturns, the returns the PFC

(08:47):
achieve, compared to the passiveindex benchmark.
And so that, by their own words, that is the value destruction,
the negative value that wasadded compared to autopilot, the
negative value that was createdby the permanent fund
corporation's active managementof the fund.

(09:08):
How much did that activemanagement cost us?
That's what the new report thatcame out last week, the
quarterly report, tells us.
How much did that activemanagement cost us and you can
see in the next column over thecolumns that are entitled
management incentive fees, firstin terms of percent of assets
and second in terms of dollarshow much did that active

(09:28):
management cost us and the totalfor the last three years.
The total for the three yearsthat we're showing negative
returns from the activemanagement.
The total is $2.4 billion.
The Permanent Fund Corporationspent $2.4 billion over the past

(09:49):
three years on its so-calledactive management to earn a
negative return, negativeagainst what they would have
achieved had it been onautopilot.
If you look at that $2.4billion as an investment that
they spent it they invested itin this active management to
produce these returns If youlook at that $2.4 billion as an

(10:11):
investment, it's a negativereturn over the three years it's
a negative return of 492%, anegative 492%, 492%.

(10:31):
I posted this up over theweekend and there was a comment
by Brian Fector that I thinkjust captures this.
Brian is former deputy directorof the Department of Revenue in
Alaska.
He formerly was with the OMB inAlaska.
He's now in Idaho because ofAdam Crum, but that's another
story.
But here's Brian's take on this.

(10:52):
There are two ends of thespectrum in terms of active
management.
There's Yale's endowment, whichis superly active management.
Their fees are something like1.5% of the assets under
management, but they've averaged3% excess returns 3% over the

(11:12):
autopilot.
Excess returns long-term, superwell-connected people, very
highly compensated he's talkingabout the Yale Endowment Fund,
but able to get in on the groundfloor of a lot of startup
activities.
Then there's Nevada and Idaho,both of whom have one guy
running the show whose fees areless than $200,000 and just puts

(11:37):
it in an index, in other words,puts it on autopilot at a low
expense ratio and calls it good.
The APFC, the permanent fundcorporation, seems to be in the
middle in the worst way.
They pay their people way toomuch, their fees are way too
high and they're not able togenerate any excess returns for

(11:58):
what they're paying managementcompanies.
In fact, they're generatingnegative returns.
That's what the red is.
They are generating less thanwhat's on autopilot.
I think this is a huge, huge,huge problem that is more
important than oil, thanwhatever we're doing with the
oil companies, more importantthan oil and is falling under

(12:22):
the radar.
So we've talked about it on theshow before.
We're going to keep talkingabout it until people really
finally understand what's goingon with the management by the
Permanent Fund Corporation ofthe Permanent Fund and we have
exactly opposite of what theformer deputy director talked
about as far as people who areconnected, and we've got
political appointees.

Speaker 2 (12:42):
We don't have professionals in a lot of those
positions on the board andthings like that.
They had what's her face inthere.
Ellie Rubenstein was in there.
She was connected, but she wasseen to be doing it for her own
thing.
There's a lot of shenanigansgoing on, I guess, between the
board and the management system.

Speaker 1 (13:02):
I think this needs to be a campaign issue.
I think gubernatorialcandidates need to talk about
what their vision is for thePermanent Fund Board.
The governor appoints thePermanent Fund Board, appoints
the members of the PermanentFund Board.
There is no legislativeoversight, there is no
requirement for legislativeconfirmation of the Permanent

(13:24):
Fund Board members, so it'sentirely on the governor.
These returns, these negativereturns, are entirely on the
Dunleavy administration.
All of the members of thepermanent fund board have been
appointed or reappointed by theDunleavy administration and the
board is the one that's drivingthe show.
They have an executive director, but the board's the one that

(13:44):
makes the allocation decisionsthat are producing these
negative returns.
So I think this needs to be anissue that is asked of
gubernatorial candidates what isyour vision for the permanent
fund board and, more importantly, what's your vision?
I mean to sort of test whetherthey really understand what's
going on.
What's your understanding ofwhat's been going on with the

(14:07):
Permanent Fund Corporation overthe last several years?

Speaker 2 (14:11):
I mean it's kind of when you look at the numbers and
you threw those numbers upthere not quite as much as I
expected.
But when we look at them still,when you're talking about a
489% negative return and somepeople would say, well, yeah,
but they got us this really nicepositive return.
The year before they were 900%over, yada, yada, yada, and

(14:35):
you're like, okay, but when itaverages it out, wouldn't it
just be better to not pay thefees and be on the S&P benchmark
average?
I mean, when you look at it,it's not that great.

Speaker 1 (14:51):
Well, I would settle now in this situation, for the
passive index.
Just put it on autopilot untilwe can get our arms around this.
Just put it on autopilot, putit on the passive index
benchmark.
The S&P is better, producesbetter returns, has been
producing better returns thanthe passive index benchmark, but
at least put it on the passiveindex benchmark.

(15:13):
And yeah, people say well, look, yeah, look at those big
numbers.
But when you average it overthree years, let's take these
numbers and average them.
Average them over three yearsit's a negative 492% return.
When you average it over fiveyears, even taking in 2022,
which was a really bizarre yearthat's the year that we came out
of COVID, stock market plunged,all sorts of weird things went

(15:36):
on but even when you take intoaccount that year, we're still
at a negative 38% return on whatthey're spending on the active
management.
Something's gone wrong.
I mean these numbers weren'talways like this.
When you look back at 2017,2018, 2019, 2020, these numbers,
I mean you had down years inthere, but they weren't triple

(15:57):
digit down years.
They weren't triple digitnegative return down years.
They had some good years, theyhad some bad years, but
something in the last threeyears has gone wrong.
Some would point out that sortof runs simultaneous with the
change in the executive directorthat occurred a few years ago
at the Dunleavy administration'surging.

(16:19):
But something's going wrong andthis is so important the
permanent fund and theperformance of the permanent
fund and the earnings from thepermanent fund are so important
to to the state's fiscal outlookthat we need to, we need to
identify the problem and we needto get the problem corrected.

Speaker 2 (16:39):
Yeah, but again, I'm trying to get you know what I've
.
I've talked to a couple ofcandidates and they get kind of
a glazed look in their eyes whenI ask them about this.
It's something that's I mean,this is important.
This is the future income ofthe state of Alaska right here.
This is the lion's share of it.
The PFC, the permanent funddraw, is the largest share of

(17:04):
revenue in the state right now,well beyond oil and gas or fish
or timber, or even the PFD take.
I mean it is the biggest chunk.

Speaker 1 (17:15):
Yeah, and it's something going wrong.
I mean, we've identified we'vetalked a lot about what's going
wrong with SB21, right Withwhat's going wrong with oil
taxes, and something is goingwrong with oil taxes as we've
gotten into the current decadeand we need to look at that and
correct it.
But this is even more importantthan getting oil taxes

(17:38):
corrected.
This is more of the state'srevenue generation than oil
taxes.
And if we have a continuationof this I mean, the last three
years have been consecutive downyears we have a continuation of
this then we're going to havesome serious issues.
I mean, some people getconfused.

(18:00):
It's not that we're losing money.
It's that we're not earning themoney we should out of the
permanent fund, and it is losingmoney in this sense If we put
it on autopilot.
This is telling us.
If we put it on autopilot thepermanent fund corporation's own
benchmark, own autopilotbenchmark we put it on autopilot

(18:22):
and got rid of the $2.4 billionthat we've spent in management
fees we'd be doing better and weneed to be doing better.
When you look at the state'sfiscal outlook we'll talk about
this in a moment but when youlook at the state's fiscal
outlook, we need to be doingbetter.
We need to be clicking on allcylinders in terms of returns
from the state's assets,including the permanent fund.

Speaker 2 (18:45):
Welcome back the Michael Duke Show, common Sense,
liberty-based Free ThinkingRadio.
Brad Keithley our guest.
We continue on now talkingabout the weekly top three.
Number two has to do, of course, with education, and, uh, brad
sprinkles some kudos out there.
He says senator cronk isexactly right, which, uh, it's

(19:08):
not something I expected to hear, brad.
What are you?
What are you talking about here?

Speaker 1 (19:11):
well, uh, we had a mini segment on this, uh, during
the break, uh last week, and Iwant to.
I want to give it a minisegment on this during the break
last week and I want to.
I want to give it a fullsegment because I think this is
this is important in the openingsession of the of the of the K
through 12 task force, thelegislative K through 12 chat
task force that's charged withlooking at funding for education

(19:34):
funding for the state andcoming up with a new approach or
revised approach, revisions tothe approach we take on
education funding for the state,and coming up with a new
approach or revised approach,revisions to the approach we
take on education funding to getto get education funding back
to where, to where people thinkit should be, including
including any any uh uh uh testsor assessments that that ought
to be used to assess whetherwe're going in the right

(19:55):
direction on education.
In the course of the openingmeeting of the legislative K-12
task force, senator Cronk, mikeCronk, said this.
Cronk, a former school teacher,pointed to one.
This is in an ADN article onthe opening meeting.
Cronk, a former school teacher,pointed to one looming factor

(20:17):
not within the task forceofficial purview the state's
fiscal plan.
For years, most lawmakers haveagreed that the state is not
bringing in enough revenue topay for all the services that
Alaskans expect, includingpublic schools.
A fiscal plan working groupconvened in 2021, brought
together a bipartisan group oflawmakers to discuss specific

(20:38):
questions, much like theEducation Task Force seeks to do
now, but most of the fiscalplan recommendations were never
adopted.
Cronk's point and it's anabsolutely correct one was you
can spend all day, you can spendall the time you want on a K-12
funding plan, but if it doesn't, if there's not an overarching

(20:58):
fiscal plan within which the Kthrough 12 funding works, you're
just setting yourself up forfailure.
A lot of times in Alaska and Iwrote a column on this a few
weeks ago in the landmine a lotof times in Alaska we argue
about trees, trees within theforest, and we argue about

(21:19):
specific trees and whether thattree is growing fast enough or
whether that tree ought to bepruned or whether that tree
ought to be replanted in someother place.
We argue about the trees and welose sight of the overall
forest of the fiscal plan.
We lose sight of how that treefits in the overall forest and
if moving that and whethermoving that tree we lose sight

(21:42):
of analyzing whether changingthat tree or moving that tree
destroys the forest, does thingsto the overall forest that the
overall forest can't manage.
And that's exactly what's goingon here with the K-12 Funding
Task Force.
We're looking at the tree ofK-12 funding and we're saying,
oh, we need to change this or weneed to change that, or we need

(22:03):
to evaluate this or we need toevaluate that.
There's going to be a lot ofpush for increasing the BSA.
There's going to probably be alot of push for increasing the
factors that are attached to theBSA that result in the overall
funding.
There's probably going to be alot of focus on the K-12 tree

(22:25):
and whether the K-12 tree needsto be changed.
But if you don't have anoverall forest that you're
looking at at the same time asyou look at the K-12 tree, if
you don't understand what impactthat has on the overall forest,
you're doomed to failure.
And the problem with this taskforce, the problem with any

(22:47):
debate about any given level ofspending in the state
corrections, education, theuniversity the problem with
focusing on any given segment ofspending is if you don't fit
that within the entire fiscalplan, you're making problems
worse.
We're running and I'll talkabout this a bit more in the

(23:11):
next segment but we're running a$1.7 billion annual current law
deficit.
When you look out over the next10 years, an average of $1.7
billion annually in deficits,that's a huge number.
That's like 20, 25% of totalspending.

(23:34):
That's the deficit number wehave.
If you say, oh, k-12 needs nomore, without addressing the
overall, the overarching fiscalplan, the overall forest, the
fiscal forest that we're dealingwith, if you just add more on
top of that, we're just addingmore on top of the deficit.
We have to get the.
We have to deal with thecurrent law deficit.

(23:57):
We have to deal with the fiscalplan.
First get the forest definedand then start dealing with the
trees and make sure that whenyou're dealing with these
individual trees oh, theuniversity needs more money.
Oh, k-12 needs more money.

(24:20):
Oh, corrections needs moremoney.
Oh, public safety needs moremoney If we keep dealing with
these individual trees withoutdealing with the overall context
, we're just going to keep goingfurther and further and further
down the hole.
So Senator Cronk has it right.
Senator Cronk's point is look,the K-12, yes, k-12 task force,
good thing.
Let's talk about a lot of stuff, but we need to get it in the

(24:43):
context of an overall fiscalplan, or else this whole thing
is doomed to failure, just likeeverything else in the forest is
doomed to failure, becausewe're overtaking the amount of
revenue that we have in thestate.

Speaker 2 (24:55):
You know, what was interesting in this whole
conversation is that KTUU had astory about the task force and
their meeting and everythingelse, and they mentioned that
both Kronk and Ruffridge werefocused heavily on how the state
was going to be able to fundthe education, giving us our
fiscal situation.
They quote Andy Story as sayingthe situation is a funding

(25:17):
conundrum, which is, I thinkthat's the understatement of the
year.
But then Loki Tobin says sheanticipated learning more about
funding schools from the AlaskaEducation and Early Development
Department at the next meeting.
Wait a second.
You're the ones that fund the.
What would you find out fromthe Department of Education and
what would Deed tell you aboutfunding?

(25:38):
You guys are the ones with thepurse strings.
You're the ones that have themoney and control it.
I mean, to me it's just like,oh okay, she obviously either
doesn't get it or isintentionally trying to just
delay and mislead, and I mean Idon't understand this at all.

Speaker 1 (25:55):
Well, I think every meeting I mean I'm not a member
of the task force so I can say,you know, just spout whatever I
want.
But I think every meeting oughtto start with you know how in
Alaska we start industrymeetings with safety moments,
right, some articulation of howto be safe out there in the oil

(26:15):
patch, how to be safe out in thefield Good thing to start
meetings with.
I think we ought to start everysession of the K-12 task force
with a fiscal policy moment, afiscal overview moment.
Look, we're running $1.7billion deficits every year on
average every year through thenext 10-year period.

(26:36):
We've got to find a way offitting K through 12 in that
$1.7 billion deficit and we haveto resolve the $1.7 billion
deficit with and we have toresolve that overall deficit
before we can really resolvewhat we're going to do with K
through 12.
I think that is the startingpoint.
That should be the startingpoint with every meeting to

(26:57):
understand the forest before youstart digging in and trying to
shuffle around the trees.
Cronk's got it right.
Hopefully Cronk and Refridgecontinue to make this point,
even if the majority wants toignore it or wants to just keep
focusing on this tree andsprinkle more money at this tree
without understanding what it'sdoing to the forest.

(27:19):
I think Kronk and Refridge haveit right and and I hopefully
they will continue to repeatingthat point during every meeting.

Speaker 2 (27:27):
Well, it's not going to matter, because, again, the
big thing about this whole, thiswhole you know education
working group, is that it's noteven, it's not even supposed to
deliver its findings until yearafter next.
Right early 2027 is whenthey're going to deliver their,
their I mean we're going to gothrough a whole cycle here, a

(27:47):
whole budget cycle and then someand an election.
Um, trying to figure this is ait, this is my take.
My hot take on this is thatthis is just another one of
those delaying ploys where theycan push it outside of Governor
Dunleavy's preview because he'llpurview, because he'll be out
of office, and they could pushit past the, the election season

(28:10):
and everything else and have todeliver this sometime next year
, year after next, and so thisis just more of a delaying
tactic.
It's theater.
I mean, it feels like theaterto me.

Speaker 1 (28:21):
I don't know about what you think, but it is
theater, but I think it's alsodesigned, frankly, to try to
shape the debate during nextyear's campaign cycle.
I mean, so one of theconsequences of not delivering
the report until the end of nextyear is that they will have
hearings during the, during theentire year, next year during
the campaign year, and they will, they will be able to call

(28:44):
witnesses up and they'll be ableto spout you know statistics
that that they've, that they'vecherry picked or handpicked to
be able to prove their point andthat'll be repeated in the news
site and news cycles.
That's going on during thecampaign year.
So I think, as much as maybegetting it past Dunleavy,
setting up the time schedule sothat it's past the end of the

(29:07):
Dunleavy administration, I thinkit's as much to give it
credibility or to give it aposition during the entire
campaign cycle so that they cancontinue talking about this and
try, through those hearings, tocontrol what, the, what, the,
what the campaigns are talkingabout during the cycle.

Speaker 2 (29:25):
Don't you?
I mean, don't you think thatagain she's?
If somebody just mentioned,isn't, isn't Loki Tobin?
Wasn't she an expert ineducational math?
I mean, shouldn't the whole?
And between being a legislatorwho's in charge of the purse
strings and being an educationalexpert, I mean shouldn't she
know what's going on with thebudgetary issues?

(29:46):
I mean, again, this whole thingof well, we've got to wait for
Deed to tell us what's going onwith the funding.

Speaker 1 (29:51):
Wait a second.
It is theater in the sense that, michael, it's designed to
elevate this issue during thecampaign cycle.
It's designed to give them aplatform.
The platform they have duringthe legislative session is
confined to the spring right,and it's going to be even more
confined next year because it'san election year.

(30:12):
People are going to want toadjourn early and go out and
campaign, so it's confined tothat.
Their attention span or theirability to pierce into the news
media is confined to thatlegislative session.
What this is doing is expandingthem.
It's essentially for this oneissue, this one tree, it's

(30:34):
expanding the legislativesession over an entire 18-month
period.
One tree it's expanding thelegislative session over an
entire 18 month period, right,and.
And so it gives them theability, the forum, to continue
to talk about this in a way thatcaptures the news cycle, uh,
over that entire period.
It's not an individuallegislator, so you know, the
news cycle doesn't treat it asan individual legislature,
treats it as a committee, as atask force.

(30:56):
That, you know, is is, I assumepeople will think, oh, it's
fair and impartial, and, andthey're going to do this over
the entire, over the entirecampaign year, so I think the
entire election year.
So I think it's much more.
It's much more than simply,yeah, loki knew this stuff, and
shouldn't she know it already?
It is a forum creation of aforum to continue to do this

(31:20):
over the election year.

Speaker 2 (31:21):
Well like you said, I hadn't considered the fact that
they'll be able to callhearings all throughout the
election cycle and everythingelse, and it'll be.
They'll be able to bring itfront and center, smoke and
mirrors, but also with a purpose.
I just look at this and I, andyou're right, it's theater, but
with a purpose.
I hadn't considered the factthat they would try and
basically leverage this.

(31:41):
I thought this was just a goodway to kind of you know
everything that they're going to, anything that somebody's going
to bring up about education,will be answered with oh well,
we'll, we've got a task forceworking on that.
We'll let you know what theydecide.
Any new idea, any new thought,any new?
Oh, the task force was workingon that and we'll have

(32:03):
recommendations in 2027 on that.
Which that that was.
But now to utilize it too as atool to be able to craft the
narrative for the electionseason.
Yeah, that's a whole notherkettle of fish right there.
That's a whole nother kettle offish right there.

Speaker 1 (32:18):
That's a whole nother level of of theater for a
purpose at this point, brad, yep, and and it's to keep the focus
on this particular tree.
It's to keep the focus on Kthrough 12 funding.
Forget the rest of it.
Keep the focus on K through 12funding.
That's why I think it's it'sparticularly important for Kronk
and Refridge to keep repeatingduring all these sessions,

(32:43):
during all the committeemeetings, to keep repeating the
need to put this within thecontext of the overall forest,
within the context of theoverall fiscal plan.
This is a waste of effortbecause all we're doing is we're
growing one tree bigger orwe're directing one tree another
way, without consideration ofwhat it's doing to the overall

(33:06):
forest, and we may be destroyingthe overall forest for the sake
of growing this one tree.
So I think, yes, I think it'sdesigned to go on during a
campaign year for a reason.
I think it's going to.
I think it.
I think it's designed to go onduring a campaign year for a
reason.
I think it's designed to keepthe focus on this one issue
during the campaign year and Ithink it's critical that cronk
and roughridge continue to raisethe, the overall forest, the

(33:29):
fundability of the overallforest, uh, uh, during the year,
to to counterbalance whatthey're, what, what other, what
the other members are going tobe trying to do to keep this,
keep this narrow focus on uh, onthe K through 12 tree.

Speaker 2 (33:43):
Not to not to suborn your, your tree analogy, forest
and tree analogy but really it'srearranging deck chairs on the
Titanic, right I mean, whereit's like you know you're
focused on this, but we'recrashing into this ice.
We should steer the ship, right.
I mean that's kind of the wholething Forest trees, titanic,
whatever but it's obviously, youknow, it's obviously coming and

(34:06):
nobody is talking.
I mean that's why it was sosurprising when Kronk came out
about this, because reallynobody's really talking about
what is going to be affecting usnext year.
I mean, they paid some lipservice to it last session, but
again member Stedman didn't.
Let's not focus on that.
We're going to focus on well,wait a second, this is the

(34:28):
biggest crisis we're facing, butdon't focus on it.
I mean, come on, it just seemslike again we're getting the
pats on the head and telling usit's all going to be okay.

Speaker 1 (34:41):
That's how we've got, that's how Alaska has gotten
into this situation.
I mean, we focused on the deckchairs.
I'll continue that one.
I like that one too.
We focused on the deck chairsthroughout this last decade.
Oh, the deck chairs of.
We need we need, you know, oiland gas credits to spur
additional production from theCook Inlet, credits to spur
additional production from theCook Inlet.
We need to, you know, addresscorrections.

(35:01):
To pick up on Will Stapp'scomments a few weeks ago on the
show, we need to addresscorrections by, you know,
bringing all the prisoners home,even though it's going to cost
us an arm and a leg.
We need to do that.
Everything has been on the deckchairs, focused on an individual
deck chair, and we reallyhaven't, we have not had in mind
what it's doing to the overallship as we've gone along.

(35:24):
Cronk is raising the issue.
I think Senator Cronk deservescredit for raising that issue
and I hope he stays at it,because if he doesn't, if he
sort of collapses into whereeverybody else in the task force
wants to go, which is focusingon this one deck chair, if he
collapses into that, then it'sjust going to be a year of

(35:45):
committee meetings and headlinesabout oh my gosh, we need to do
this on K-12, or we need to dothat on K-12.
And we'll lose focus on theoverall ship.
So I think Senator Cronk iswell positioned, well placed,
and I hope he stays at it.

Speaker 2 (36:02):
Well, and this is something that you and I have
been harping on for over a yearand a half now, specifically, is
the forecast of this deficit,and nobody I mean it's like
everybody, you know put them inrocking chairs and they all nod,
oh yes, oh yeah, but thennothing happens, they don't talk
about it, they don't engage it.
Even candidates that you know Iwould think would be, would be,

(36:25):
would jump at this, have kindof, you know, avoided.
I brought Shelley Hughes onboard to talk about her
candidacy.
She was part of the fiscalpolicy working group.
She was in the thick of itpolicy working group.
She was in the thick of it andwhen I asked her about, you know
, putting that into motion, heranswer was about the sunset
committee, which is just a onepiece.
That's great, but that's her.

(36:50):
I mean, we've got toacknowledge that we're in
trouble and nobody seems to wantto acknowledge that.
20 seconds.

Speaker 1 (36:54):
Well, this is going to be a great segue into the
third segment, but, shelly, weneed a candidate who steps up
and makes fiscal policy thecenter of their campaign,
because that is the overridingissue.
We're not going to be able todo anything else because we've
drained the SBR, the CBR andwe're about to drain the
permanent fund dividend.

Speaker 2 (37:12):
We're continuing now.
Brad Keithley, alaskan Source,sustainable Budgets, the weekly
top three, the messaging we'restarting to get it from the
candidates, and we were justtalking about how nobody wants
to talk about the nine millionpound elephant in the room which
is the upcoming deficitspending and a fiscal plan.
Brad, you've you've had somechance to analyze some of this

(37:35):
with these opinion pieces thatare starting to come out.
Give me your, give me yourthoughts here.

Speaker 1 (37:39):
Yeah, this is probably going to be another of
those continuing segments.
We had a gubernatorialcandidate write an op-ed piece
and what's the reaction to that?
We had two of them in the pastweek.
Two of the candidates wroteop-eds in the ADN.
That's appearing in the otherpapers as we go along and they

(38:00):
both share a common theme.
One of them was from ClickBishop and the headline is I can
get things done.
Here's why I'm applying for thejob of Alaska governor.
And the other one was from TomBegich, which was building
Alaska's future by puttingeducation first, why I'm running
for governor.
Neither of these, neither ofthese op-eds acknowledged that

(38:23):
we're dealing with a fiscaloutlook that is trash.
Neither of these talked aboutthe deficits we're facing.
Neither of these talked aboutthe fiscal constraints that the
state's going to be operatingunder.
Neither of these talked abouteven oil taxes.
I mean, begich had talked aboutoil taxes before, but it
doesn't make it to this op-ed.
Neither of these talk about thepermanent fund corporation and

(38:45):
the absence of returns from thepermanent fund corporation or
the lack of full returns fromthe permanent fund corporation.
All of them both of them justtalk about spending.
Bishops talks about I can getthings done.
I can do infrastructure.
I can do big things.
I've done it.
I've known how to do it.
I can accomplish it.

(39:05):
Spending baggage, buildingAlaska's future by putting
education first, why I'm runningfor governor.
We need to spend more oneducation Spending.
Neither of these talk aboutwhere the revenues are supposed
to come from.
Neither of these talk about howyou fit what they want to spend
on in the overall picture ofour fiscal constraints, of our

(39:29):
fiscal reality.
It's just more and more what Ican spend on, and that's sort of
where we come to in Alaska.
We have candidates who arerunning on what I can spend on
Vote for me because I'll spendit on this.
We don't have it, we don't havethe revenue to support it, but
I'll spend what we don't have onthis Vote for me and I'll spend

(39:50):
it on that.
I mean, clickbishop especiallyis a little irritating.
I can get things done here'swhy I'm applying for the job of
Alaska governor because I canget things done.
And others to cut the PFDbecause they didn't have the
courage to step up and have anoverall fiscal plan that sort of
put together an equitable waythrough.
The CBR started cutting the PFDand we still don't have

(40:12):
anything to show for it.
I mean, that's Click Bishop'srecord.

(40:41):
Tom Begich's record is not muchdifferent.
He spent less time in theSenate but during his term they
blew through the end of the CBRand they continue to cut the PFD
, are and they can continue tocut the PFD, and yet both of
these candidates are writingop-eds about.
I can get things done because Iwill spend more in this
particular area.

(41:02):
Your comment about Shelly Hughes, I think, is a perfect one.
Shelly Hughes is perfectlypositioned because of the role
she played on the Fiscal Policyworking group.
Shelly Hughes is perfectlypositioned to be the candidate
of fiscal reality and thecandidate of fiscal sanity.
She can bring forward what thefiscal policy working group did,

(41:23):
which was actually talkingabout a real balanced budget, as
opposed to these fake balancedbudgets that the legislature has
been claiming for the lastseveral years.
She's a candidate who can bringforward that experience and do
it.
We need a candidate that'sgoing to do that.
If we don't, we're just goingto stumble our way through
another election cycle andstumble our way into another
governorship, anotheradministration that's just going

(41:46):
to keep digging the hole deeper.
Digging the hole deeper, uh,while they, while they spend
what we don't have on theirfavorite things.

Speaker 2 (41:54):
Yeah, well, I mean, and I feel like you know,
there's a ton of candidates outthere and we've talked to a few
of them and there's been a lotof, you know, and some of them
have got a great talk, but not,you know, we don't have any walk
yet.
And when I particularly putthat question to Shelly Hughes
when she was on the programabout a overall fiscal plan and

(42:16):
she came back with the sunsetcommission, which again is great
in that deeper dialogue of howdo we fix the overall, you know,
and I know it's big and scaryand it's probably people's eyes

(42:38):
glaze over or whatever, but $1.7billion average deficit for the
next 10 years, with this nextyear potentially being two, two
and a half billion.
I mean, somebody's got to bethe adult in the room.

Speaker 1 (42:54):
Yeah, and it's one of the consequences.
We've talked about this alittle bit on the show before.
It's one of the consequences ofranked choice voting, I think,
because everybody's trying toposition themselves for the top
four right and the numbers giventhis many candidates, the
numbers to get into the top four, I mean you may have somebody
probably not, but you may havewell, you're going to have

(43:15):
somebody in double digits in theteens who has a, who has a
percent vote in the teens in theinitial round.
That's going to make it to thetop four.
So everybody's trying toposition themselves around.
What's my core, what can Idefine as my core group?
To get myself in the teams, toget myself in the high teams so

(43:36):
that I make the final four andthen they'll tell themselves
then I'll be a real candidateonce I make it to the top four.
And part of what I think may begoing on with Shelly although
this is speculation on my part,but part of what I think may be
going on is Shelly sort ofdefined her teens, her top teens
, vote around just talking aboutspending cuts and about how

(44:01):
we're going to control spending,as opposed to talking about a
real fiscal plan, and she thinksshe can get her top teens
percentage out of just talkingabout that and is concerned that
if she talks about a fullfiscal plan that would have
revenues, that has somediscussion of revenues, she
might take away from her topteams.
I think that's what's going on.

(44:22):
I think that's why people arescared to get into it.
But we don't need a scaredgovernor.
We need a governor who actuallyrecognizes the reality that
we're in, the fiscal realitywe're in.
We need a governor thatrecognizes a candidate, that
recognizes that we're staring ata $1.7 billion deficit and we
need a full fiscal plan to dealwith it.

(44:43):
That is the core issue thatwill define Alaska over the next
decade and hopefully somecandidate will step up and do
that.
I mean, you and I talkedinitially when Bernadette came
out as a candidate oh, she's astrong conservative, she'll be a
good candidate, but all she'sdoing is repeating Dunleavy 2018

(45:05):
, which is I'm going to cut myway out of this and we saw where
that went.
We saw where that went.
Even with the Republicanmajority in the legislature.
It didn't go anyplace.
I mean, you get into asituation where everybody has
their sacred cow that they'regoing to defend.
By the time you add up 60sacred cows, you're still in a

(45:26):
deficit situation.
We need a candidate who's goingto talk about a full fiscal
plan.
Shelley's positioned to do it,but if she doesn't do it, then
somebody else needs to step upand do it.
Somebody needs to be, as yousay, the adult in the room.
Neither Click Bishop nor TomBegich auditioned for being the
adult in the room.
They auditioned for being thespecial interest.

(45:47):
I can continue spending.
Just vote for me and I'll spendit on this Right, I'll fill
your coffers or fill yourpockets or do your special
interest.

Speaker 2 (46:00):
You know, and I passed some of this information
on the permanent fund stuff andall this other stuff to Shelley
and to Bernadette's people andeverything else, and I'm hoping
that they will come up and startto tackle some of these things
Because otherwise, like you said, it's just a repeat of the same
things we've heard in the lasttwo election cycles for governor
.
It's just the same kind of thesame kind of verbiage.
There's a lot of talk, but howare you going to walk it when it

(46:22):
gets there?
And that's the big thing.
I mean, that's the thing, brad.
I've had some conversations withsome people behind the scenes
and they're like well, you knowour candidate, we, you know we.
They believe in what you'retalking about, but they've got
to position themselves and theydon't want to let too many of
their cards.
They want to play their cardsclose to the vest right now
because otherwise othercandidates might steal their

(46:45):
good ideas.
I mean, at some point you'vegot to stick your head up above
the crowd.
You may take a tomato or two,but you've got to do it at some
point.
You can't with a crowd of afield of 10 people running for
governor.

Speaker 1 (47:01):
at some point you've got to do something to
differentiate yourself from thecrowd right, yeah, and basically
what they're all saying I meanwhat Click and Begich both said
is I don't want to be the adultin the room, I want to be the
panderer.
I want to be the one who says,oh, I can do all this, uh,
magically, uh, by, uh, uhwithout, without the revenue to

(47:22):
support it, without a fiscalplan to support it.
I can.
I can be the builder, which isclicks, clicks, claim, or I can
be the education governor, whichis Tom's claim, uh, but with,
without mentioning the revenue,and they just they're pandering
to a base, a particular basethat you know, in their
calculation, gets them to thetop teens and gets them to the
final four, where they canpander some more, expand their

(47:46):
pandering.
We need somebody who, from theget go, stands up and writes
the-ed that says look, we need afiscal plan, I'm going to be
your fiscal governor.
This is why we need a fiscalplan.
We can't do any of this otherstuff if we don't have a solid
foundation on which to do it, ifwe don't see the iceberg coming
and redirect our way away fromthe iceberg, and then, once we

(48:09):
do that, we can do things insidethe boundary of that fiscal
plan.
But until we do that, we'rejust whistling in the wind.
We need somebody who writesthat op-ed, some candidate that
writes that op-ed.

Speaker 2 (48:21):
Randy says, is the adult in the room the governor
candidate who wants to institutehis income tax or one who is
brave enough to list possiblespending cuts?
The answer is both.
I mean really, because again,again, with a two billion dollar
deficit, if you don't thinktaxes are on the table right now
, you're not paying attention.
With a two billion dollardeficit, if you don't think that

(48:43):
there's some form, because theycould take all of the pfd,
every bit of it, and there'sstill 1.5 billion dollars in the
hole, right, $1.4 billion inthe hole.
If you don't think it's goingto happen, it's happening right
now.

Speaker 1 (49:01):
All we need I mean, it's not like the plan isn't
already written All you need isto go back to the 2021
Legislative Policy Working Group, take that, fill in, turn it
into bullet points or howeveryou want to do it and then talk
about that and you can say look,this is what the legislature
came up with when they were set,when they took a group of them

(49:22):
and set them off to one side andsaid be adults in the room and
come up with a policy.
Both liberals and conservativescome up with a policy.
This is what they came up withand it's the correct one.
And all you need to do as acandidate, is to fill in the
blanks and say, look, I'm goingto build on that and I'm going
to come back to the legislatureand say, look, this is what you
guys came up with at one point.
This is the right thing to do.

(49:43):
Let's go do that, and it's notrocket science.
You don't have to go create awhole bunch of stuff.
You do have to worry about thepermanent fund corporation now
because they've gone off track,but it's not rocket science to
do all this stuff and it's just.
I mean, all you do is you takethe fiscal policy working group
document recommendations from2021, write the op-ed around

(50:05):
that, put that on a piece ofpaper and do the editing around
that and you've got a plan.
You've got a plan that you cansell hard, but nobody's done
that yet.

Speaker 2 (50:16):
Well, nobody wants to be the candidate that says, oh,
by the way, we're $1.7 billionin deficit every year for the
next 10 years.
Nobody wants to be that.
The first person that steps upand is that candidate is the one
that's going to stir someoutrage, going to freak some
people out, going to do all that, but they'll also be the ones

(50:37):
that can help shape thenarrative around it.
And so somebody needs to be theadult and be the first one to
take that large step and it's astep of faith, there's no doubt
about it, but you're going toactually have to, somebody's
going to have to do it.

Speaker 1 (50:53):
Yeah, and you're going, you know, and, and, and
you're going to have to thinkthrough how do I get in the top
teens in terms of, in terms ofmy group, by doing that, and it
may be, it may be a challenge todo it, but that's what the
state needs.
I mean, we don't need morepanderers, we don't need more
people who's saying the solutionis more education, that's all

(51:13):
we need to do.
More education, or moreinfrastructure in Click's case,
that's all we need to do.
Or just cut it away inBernadette's case, that's not
going to happen either.
We need a candidate whounderstands that there's not a
simple answer and that there's acomplex answer.
And simplify the complex answer, but give a total answer as

(51:34):
opposed to, as opposed to these,these, these pandering that
we're having, that we're, thatwe're starting to see come
across now.

Speaker 2 (51:43):
Right?
No, it's, it's madness, man.
I don't know how many.
I don't know how many moretimes we can keep doing the same
thing and same thing and keep,you know, kicking the ball down
the road.
Whether it's the educationworking group to try and delay,
delay, delay and then shape thenarrative, whether it's just

(52:03):
saying the same things of we cantotally cut our way to this
100%, because now we're so farinto it, there's just, I mean,
how do you cut $1.7 billion outof the budget without cut, you
know, creating some kind of hugecratering hole somewhere?
I mean, somebody's got,somebody's got to address this,
and I don't.

(52:23):
I don't know who's going to, Idon't know who it's going to be,
I don't know who's going tograb the bull by the horns, but
somebody's going to have to, andif not, we're going to be
facing some serious issues inthe next year or two.

Speaker 1 (52:36):
Well, we know it's not going to be Click, who's
been part of the problem byspending down our savings and
cutting into the PFD.
We know it's not going to beClick.
We know it's not going to beTom, who just wants to spend
more on K-12 without worryingabout the overall force.
We know it's not going to beTom.
So you know, by the process ofelimination we're finding out
who it's not going to be.
Maybe we'll get down and findsomebody who you know, who goes

(52:59):
the opposite direction, andwe'll find.
And we'll find they're the one.

Speaker 2 (53:02):
I have some hopes, but, man, I don't know what's
going to happen.
90 seconds, brad.
Final thoughts for today onthis.
What do we?
What do we do?

Speaker 1 (53:11):
Well, we need a governor who stands up and
appoints a good permanent fundcorporation board to get the
permanent fund corporation backon track.
We need somebody who talksabout a full fiscal plan, as

(53:36):
opposed to just the trees insidethe fiscal plan of education or
corrections or whatever theywant to talk about.
And we need a governor, we needsomebody writing their platform
in the ADN that talks about afull fiscal plan, an equitable
fiscal plan, a fair fiscal planand a complete fiscal plan that
puts the state back on track.
That's the core issue.

Speaker 2 (53:47):
Well, I mean, we can only hope that there's people
out there, or candidates outthere, that are attracted to
this idea.
I know some of it is politics.
You've got to get through theprimary yada, yada, yada, but
you've got to at least give usan inkling of it on the way
through.
All right, Brad KeithleyAlaskans for Sustainable Budgets
.
Brad, thanks for coming onboard.

(54:08):
I appreciate you being a partof it today.

Speaker 1 (54:10):
Michael, as always, thanks for having me.
Well, that's a wrap for anotherweek's edition of the weekly
top three from Alaskans forSustainable Budgets.
Thank you again for joining us.
Remember that you can find pastepisodes on our YouTube,
soundcloud, spotify and Substackpages, and keep track of us
during the week on Facebook andTwitter.
This has been Brad Keithley,managing Director of Alaskans

(54:32):
for Sustainable Budgets.
We look forward to you joiningus again next week on the Weekly
Top Three.