Dunleavy aims to spend $250,000 of state funds promoting his fiscal fantasy

Gov. Mike Dunleavy announces he will shut down government state government on July 1 if the Legislature does not appease his allies.

Gov. Mike Dunleavy’s administration is looking to spend a quarter of a million dollars on a “public education and information campaign” to boost his proposal to amend the Alaska Constitution to add in a guaranteed dividend at a rate that few believe is doable without significant cuts to state services and/or higher taxes (though, I’m pretty sure he’s leaving out that bit about taxes and/or cuts).

The governor claims the spending is necessary because polling conducted by the Alaska House Majority Coalition showed about two-thirds of Alaskans weren’t familiar with his plan, which his own administration has struggled to explain in any detail to the Alaska Legislature over the past two months. Many legislators, including allies, aren’t so sure that the spending makes all that much sense.

“At the same time every other state agency has endured years of service and staffing cuts advocated by the governor, the Office of the Governor has steadily increased its budget to the point it is now $32 million, an increase of roughly 25 percent,” said Anchorage Democratic Rep. Zack Fields in one of the more pointed responses to the proposal. “Yet somehow, even with a large staff that includes an entire communications department, the administration is now seeking to use even more public dollars for a political campaign aimed at shredding the Constitution.”

The Dunleavy administration has so far preferred to claim that bringing resolution to the size of the dividend by setting it at half of the spendable investment income of the Alaska Permanent Fund is the first and most important step to solving the state’s financial woes. His team has met questions about the $200 million to $500 million budget hole in his plan with pleas to, please, not look behind the curtain.

But that hasn’t stopped legislators from looking and what they’ve found—or, putting it better, haven’t found—has soured many folks who’d like nothing more than to enshrine big dividend with no hard decisions, leaving them to wonder why the governor is so unwilling to lead. So stark are the number and so glaring are the gaps in the plan that some allies are doing the unenviable task of filling in the blanks themselves.

Conservative Wasilla Sen. Mike Shower did just that during a hearing last week, where he proposed higher taxes on the oil industry and a sales tax that’d be collected on nearly everything sold in Alaska. Still, as many pointed out, he had no answer for how to slash $200 million from the state’s budget and keep it out.

“I’m not particularly worried about it because that’s something we would have to deal with in future years,” Shower said about those cuts.

The refusal of Dunleavy and even Shower to come up with a realistic answer to cuts that answer how much will be cut, how it will impact Alaskans and how they plan to get the votes to make them a lasting reality has stymied much of the progress in the Legislature on a fiscal plan so far. That lack of specificity may help Dunleavy and allies avoid the political reality that making cuts after nearly a decade of deep cuts to state services is a near-impossible task and has allowed each different faction to substitute in their own boogeyman whether it be cuts to K-12 education, Medicaid, income taxes or oil taxes as a reason to dig in.

The very polling Dunleavy is relying on to argue the need for this campaign also shows the more people understand the holes in the plan, the less they support it. The polling found that with no other factors considered, 65% of Alaskans support enshrining the dividend. That support drops precipitously when respondents are asked if they want to fill the ensuing budget gap with cuts (support drops to 48-48) or with taxes (where support drops to 42%).

When respondents are informed of the full situation of the governor’s plan (that it leaves the tough decisions unanswered and requires $3 billion in overspending to bridge the state’s budget) the support falls to 33%.

Unless Dunleavy is planning on finally putting some support behind, well, anything beyond big dividends, then this state-funded campaign can’t be expected to accomplish much other than to confuse the situation and interfere with the long-shot work of legislators who are trying to find a compromise and path forward.

But that’s probably the whole point of the exercise from an administration that has already shown a penchant for state-funded political campaigns. The less Alaskans know about the next steps in his plan, the better.

It worked for his election campaign in 2018, after all.

The House Majority Coalition survey

The governor’s request for information

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