Unpacking the State of the State: Big talk, but little substance

By contributing writer TJ Presley

In keeping with his campaign style, Mike Dunleavy’s first State of the State speech was, let’s say, light on the details. Speaking for just over 23 minutes, Dunleavy fell short of his predecessor Bill Walker who spoke for 40 minutes or more at all of his State of the State speeches.

What could, and should, have been a moment for Dunleavy to connect with Alaskans and begin the work of rallying legislators around a vision, turned mostly, in the words of Tim Bradner, into a “Clint Eastwood movie” style screed in which Dunleavy declared…well you know the rest by now. The media couldn’t resist the red meat and has been blasting the headline now for days.

But, substantively, did we learn anything from what Dunleavy said in that short time? What can we divine from his speech about the most important issue facing the state, the budget? Not much, unfortunately.

What’s immediately clear is that there is no actual plan. With Walker, there was always a plan. Always some new attempt at righting the ship’s finances, sometimes a never ending onslaught of plans. He had painful cuts, he had efficiencies and he had a boatload of proposed taxes for, at one point, pretty much every industry in the state. But, most importantly, he a plan to draw a percent of market value from the Alaska Permanent Fund’s earnings reserve to fund government and bring us close to a balanced budget.

Walker deserves a lot of credit for always being forward with Alaskans, and the Legislature, about what he thought was needed fiscally and for forcing the paradigm shift on the Permanent Fund Dividend. He was also a bit of a political enigma. These days, Republicans (and let’s be honest, he was, and is, still a Republican) willing to publicly support an income tax, or really any tax for that matter, are a nearly extinct species.

Walker took incredible political risk and paid the price for it. Always returning to the legislature with more numbers, more information and more innovative ways to try and genuinely move the state out of the recession. The road to fiscal panacea for Alaska with all on board for him, it seems, was paved with electoral disaster.

Independent out of office, and Dunleavy in, we’re back to the usual world of politics full of meaningless platitudes, ideologically motivated government, and fuzzy details. Dunleavy’s “Permanent Fiscal Plan” consists of three (wow) constitutional amendments.

First, it’s not clear that even with both chambers in Republican hands that Dunleavy could get these over the hump. Remember, the threshold to amend the Alaska Constitution is two-thirds  of each house, so 27 from the House and 14 from the Senate. He might get there with the Senate, but those babies are dead on arrival in the House no matter which way the majority goes with the exception, maybe, of the PFD.

On the merits, the three constitutional amendments would do next to nothing in actually solving the $1.6 billion deficit this year or into the future. Setting a limit on how much can be spent (proposed amendment number one) is really just another way of trying to force the Legislature to accept an unallocated cut, which is how we’ve arrived at the position we are in today – a never-ending fight over education, Medicaid and oil taxes. It is the battle royale that will start once again as organization finally happens in the House. At the end of session, after what is sure to be a bruising fight, there likely won’t be 27 votes willing to move forward on this.

Proposed amendment number two, enshrining the PFD in the Constitution, has the most likelihood of passing for a variety of reasons that would take a novel to discuss. Put simply, the Legislature has backed itself into a corner over the past six years regarding the dividend and it’s time to put this thing to bed for everyone’s sake. Two years really isn’t that far off and many feel there was a fairly clear message from the voters that they expect a full PFD this year. There could very well be 27 votes in the House; everyone’s going to ride that train right back into Juneau. 2020 here we come. Watch the votes on this one closely. And more policy discussion to follow as, unfortunately and always, the devil will be in the details.

Finally, proposed amendment number three mandates that the people must vote before any tax changes occur. Because the resolutions haven’t been introduced yet, it’s not clear what the details on this are, but this one likely won’t meet that 27 vote threshold in the House for all sorts of (good) reasons. Don’t expect that to stop new Special Constitutional “Reform” Adviser Dick Randolph from trying.

It’s clear this is not the fiscal plan we’ve all waited for with bated breath. Logistically, let’s entertain the notion all three amendments pass. They then have to be voted on in the next general election, in 2020, then implemented in 2021. What’s Alaska supposed to do until then? Don’t ask Dunleavy. Or Donna Arduin. The answer will be discussed in my next piece Nightmare Scenario where we’ll have to game things out for ourselves to see what’s coming down the pike.

It’s also important to point out that of the maybe three actual policies Dunleavy discussed in any detail, all would require increased UGF funding. More troopers? Money. More prosecutors? Money. Courts open five days a week? Money. A brand, spanking new marketing team with “backgrounds in finance, marketing, and research?” Money. At this point, February 13th, and the budget, cannot come soon enough.

Politically, Dunleavy sought to strike a strong, populist tone that his base, no doubt, loved. The harsh words for criminals, splashed across every newspaper in Alaska, made for great headlines — so good play there. But beyond that Dunleavy failed to put forward a real vision for the present and future of Alaska.

He spoke of growing the economy, diversification and restoring public trust. All worn tropes from politicians of every stripe in our state and every other. He noted Alaska’s highest in the nation unemployment rate, but offered no solutions to address it. He returned to a campaign favorite, “Alaska is open for business,” yet didn’t tell us why it is now and wasn’t before. He promised to “restore public trust in government” but had no solid policy positions to point to that his government would pursue beyond warring with criminals to restore that trust.

Hindsight is always 20/20. Bill Walker had his flaws, but looking back it’s certainly a testament to character that he was willing to put so much out in the public sphere, and to take the hit for it, something he mentioned that didn’t mind doing often. Dunleavy is a more practiced politician and won’t make that same mistake. He’s surrounded himself with staff eager to go about the work of dismantling state government and even after seven weeks in, we appear to be left with many more questions than answers.

About the author

TJ moved to Alaska in 2010 and worked in the Alaska Legislature for six years. Following his work there, he served in the Department of Natural Resources until December 2018.