The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (1.20.2025)
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 January 20, 2025.
This week, our top 3 issues are these: 1) we discuss what Legislative Finance's "Overview of the Governor's Budget" says about the financial situation the Legislature is facing this coming year (2:14), 2) we ask what the heck Enstar is up to now in its ongoing efforts around Southcentral gas supplies (18:08), and 3) we discuss the selective political mutism of some when it comes time to address the adverse impact of PFD cuts on the economics of working-class Alaska families and even on Alaska entrepreneurship (38:44).
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.
Hi, this is Brad Keithley, managing Director of Alaskans for Sustainable Budgets. Welcome to the weekly top three, the top three things on our mind here at Alaskans for Sustainable Budgets for the week of January 20th 2025. The weekly top three is a regular segment on the Michael Duke Show. The show broadcasts on both Facebook Live and YouTube Live as well as via streaming audio from the show's website. Weekdays from 6 to 8 am.
Speaker 1:I join Michael weekly in the first hour of Tuesday's show from 6.10 to 7 am for a discussion between the two of us about our three issues. We post the podcast of our discussion following the show on the Alaskans for Sustainable Budgets Facebook, youtube, soundcloud, spotify and Substack pages, also on the Alaskans for Sustainable Budgets website, as well as the projects page on national blog site mediumcom. You can find past episodes of the weekly top three also at the same locations. Keep in mind that, in addition to these podcasts during the week, you can also follow and participate in the discussion with us of these and other issues affecting Alaska's fiscal and economic condition by following us on the Alaskans for Sustainable Budgets Facebook page and through our posts on Twitter.
Speaker 1:This week, our top three issues are these First, we discuss what Legislative Finance's overview of the governor's budget says about the fiscal situation the legislature is facing this coming year. Says about the fiscal situation the legislature is facing this coming year. Second, we ask what the heck NSTAR is doing now in its ongoing efforts around South Central gas supplies. And third, we discuss the selective political mutism of some when it comes time to address the adverse impact of PFD cuts on the economics of working-class Alaska families and even on Alaska entrepreneurship. And now let's join Michael.
Speaker 2:I guess we'll just go ahead and get cracking, get started on it. There's a new review out from Ledge Finance which gives us a little bit of a I guess a taste, a precursor, of what this session is probably going to look like from a monetary standpoint. Let's get to it.
Speaker 1:Well, there's three documents really that those who follow fiscal matters sort of look forward to of look forward to maybe is a wrong word, but take into account as you approach the session. One is the governor's budget, certainly to see what the governor is proposing to the legislature, as unrealistic as it may be or as empty as his last proposal from the governor, but that's one, the governor's budget. The second is the fall revenue forecast, which is the Department of Revenue's honest and I think for the most part is honest an honest, straightforward look at the sources of revenue the state has and where they're headed and what's going on with them. And the notable one from this fall revenue forecast, as we've seen from a couple of the last forecasts, is that even though oil production is going up by orders of magnitude, revenue from oil is staying flat. And that's the big take away from the fall revenue forecast. The third one that's not as widely known as the first two, but the third one that is equally as important I've come to realize, in my view is equally as important is Legend Finance's analysis of the governor's budget overview. They call it the overview of the governor's proposed budget and it's published in advance of the start of the legislative session. And and the reason that is important is is it's another non aligned or it's another independent view of what the governor at the time whatever governor, it is what the governor has proposed in terms of the realism of the governor's proposal, but it's also sort of an insight into at least what some parts of legislative leadership are thinking about, are looking at in terms of numbers and in terms of constraints on what their flexibility is. Ledge finance works for essentially works for the chairs of Senate finance and House finance, and certainly the head of ledge finance is close to both of those and I think, as a result, this overview is really written for those clients to tell them what the important parts are of the governor's proposed budget and the state's fiscal outlook.
Speaker 1:This one got published. This year's Ledge Finance Overview got published last week late last week Friday, thursday or Friday and the executive summary of it. If those listening or those watching haven't read, it is worth the time to read. If those listening or those watching haven't read, it is worth the time to read. I want to highlight one thing in particular that that, the, that the, the, the overview says it's on page eight of the executive summary, or page eight of the introduction. There's two parts to it. One is a table, that of the introduction. There's two parts to it. One is a table that sort of totals up spending, the governor's proposed spending plus, realistically, what needs to be added to that spending to fill it out and, at least from the legislature's standpoint, what the legislature is going to be looking at that realistically needs to be added to it to fill it out, to make it a valid budget, and then compares that to revenue. And here's the bottom line Adding those items, which are not many but sort of the items necessary to make the budget a complete budget, adding those items which represent costs necessary to maintain state services at the same level as FY25, the year we're in now and we're talking about the FY26 budget which represent costs necessary to maintain state services at the same level as FY25, would result in a substantial deficit in FY26, even with a 75-25 PFD appropriation.
Speaker 1:To balance that budget, the legislature would need to reduce spending, strike would. Will will need to reduce spending, pass legislation, increase revenue further, reduce the PFD or draw from savings. New further reduce the PFD or draw from savings. So you know, we've been told all along by Bert and by Lyman and by others, that 75-25 is the line you know. That's where we're going to draw the line, that's where the PFD, that's where we're going to stop taking from the PFD and we're going to finally. We're finally going to get to 75,. We're going to get to 75.25. We're not going to take from the PFD anymore. That's going to be the. That's going to be. Well, we've hit 75.25. We hit 75.25 this year. Actually we're a little bit over, given where oil prices have gone. We're a little bit over 75.25. We're going to be about 76.24 this year. But when you look at FY26, it's clear that we're going over the edge. The graph, the chart that is with that language, is headed at 75-25. Pfd alone won't balance the budget and it shows the projected FY26 revenue. That's in the fall revenue forecast.
Speaker 1:The governors, the dollars from the governor's proposed budget. Shows the surplus deficit from that. Shows the effect of reducing the PFD to 7525, the additional revenue that comes from reducing the PFD to 7525 compared to the governor's statutory PFD shows a slight surplus from that. That. If you reduce to 7525 and use the governor's budget, you would have a slight surplus 30, some odd million dollars. But then adds the additional K through 12 funding to match FY25. Remember what Ledge Finance is doing here is trying to get back to FY25 service levels. You add the K-12 funding necessary to match FY25. The projected Medicaid additions in Medicaid that the administration itself has said additional Medicaid funding is needed in order to maintain FY25 standards and the added placeholder for contractual increases. The state is in negotiation with various employee unions right now and this is the anticipated result of those contractual increases and you get a deficit. You end up with a deficit of about $200 million and that's assuming oil prices. The oil prices projected in the FY26 revenue forecast hold. It's not clear they're going to hold.
Speaker 2:Right and just to clarify, that's just the K-12 funding number. That matches last year. That's not the $1,900 that we've seen, the $1,000. It's not the new stuff that we're seeing thrown around. This would just match what they spent last year and it doesn't include defined benefits. It doesn't include royalty relief for the cook inlet or any other kind of subsidy for the cook. This is just matching.
Speaker 1:It doesn't include the $50 million that Ada has promised or Ada has said they would fund to underwrite the study that Glen Farm is going to do in the big line. I mean it doesn't include anything other other than those items. So it's it's showing. It's showing that we've hit, that we've hit the wall. We've hit the wall that Bert Lyman and others have said is is now is the new standard, so the wall they're not going to is the new standard, so the wall they're not going to. It's the wall they're not going to. It's the line in the sand that they're not going to cross.
Speaker 1:We've now hit the FY 26, is hitting the wall and going through the wall, and the question now is what is what the legislature is going to do about it? We've been, we've talked on the show for a while that that we're going to get there and if you look at these numbers, if you apply the same standards that Ledge Finance uses and I've redone my projection numbers to reflect Ledge Finance's projected spending levels off of this baseline we're at 81% of the POMV draw for state government to balance state government, if that's all you use to balance state government 81% in FY26, 83% in FY27, 86% in FY28, 89% in FY29, 90% in FY30.
Speaker 2:And it just goes on. And again, that's assuming pretty flat spending, right? I mean, on the numbers that you're talking about, with 89% of the PFD being, you know, 89% going to government, that's with flat spending, that's no increases, that's just kind of accounting for what we got and keeping up with the Joneses. That has nothing to do with new spending, right.
Speaker 1:Yep, exactly right, michael. So it's so. So you know, all these people are going down to Juneau and saying, oh, we need more funding for this, we need more funding for that. There was an editorial in the Fairbanks News Minor over the weekend. We need more funding for things that are important to the interior, and I'm sure they are important to the interior.
Speaker 1:But all of these people who are going down to Juneau and say we need additional funding, this is the wall. This is the wall that Lyman and Burt said was the wall. This is the line in the sand that Lyman and Burt said over the years was the was the line in the sand. Um, and so we're going to find out. You know what? What reality is we're going to find. We're going to find out if they're a going to, going to support that wall or allow a breach, and then where do we go from there? Or B, whether we're going to talk about new revenues. Or C, whether we're going to talk about decreased spending in other areas to make room for even holding level at FY25 service levels. We're going to find out. It's a big issue, you're right, the media is not talking about it yet, but it's a big issue. And the ledge finance overview tells us that it's here.
Speaker 2:And if we get the spending that everybody's promising, it won't be 75-25. We'll be lucky to get 95-5, maybe Just the verbiage in this Pete, and I'm going to throw it back up there again because it's so again, just right there. 75.25 alone won't balance the budget. And if we just held steady I mean that is so pie in the sky, the idea that somehow we're only going to hold steady because everybody's promising everybody everything New retirement program, new this new school funding, new, all that we will still be $200 million in the hole, at least with just the flat spending, at least with just the flat spending. I mean it's. But my prognostication again has come true the PFD. We're watching the death of the PFD, brad, right now, as we speak. We are watching the death, the slow and steady death, of the PFD right now.
Speaker 1:Yeah, I mean we drew a line in the sand at the statutory level, blew through that, like there was, like there was nothing to it. Drew a line in the sand at 50, 50, blew through that Like there was nothing to it. And then Bert and Lyman and I want to emphasize this over and over and over and over again these guys said 75, 25. Over and over again, these guys said 75-25. That's what we need. We'll be able to survive at 75-25. We'll hold the line at 75-25. Um, I'm sure there's places where Bryce is on the line, Neil Foster is on the line.
Speaker 1:I'm sure you can find everybody saying 75-25 is what we need. We'll hold the line there. That's what they said. We're at that point. What are they going to do? And yes, if they breach that line, you know, chuck Kopp said. Chuck Kopp said we're going to balance the budget without overdrawing from the p, without overdrawing from the era. Uh, and I and others have taken that to mean we're going to balance it through pfd cuts, because he certainly didn't talk about new revenue and he said in fact there would not be new oil revenue, that we would not go back, not go back in and address oil taxes. So I mean they're, they're setting up the rate on the pD and once you breach the 75-25 line that everybody, everybody has said is their line in the sand, once you breach that, I don't know where you stop.
Speaker 2:Well, I mean, I don't think you do. I don't think you do. I think a lot of this is just platitudes that people have said over the years and I think in their heart of hearts they realize that it was just a platitude to keep you satiated in the short term. They realized, I mean again to me, brad, my main thrust has always been since 1999, I've been saying this when they made that first run at the PFD, I said the main goal is to get access to the corpus. I said the main goal is to get access to the corpus. That's the whole point.
Speaker 2:They eventually want to get access to the corpus and we saw that end run. We saw that play last year, which is still not dead, but where they were talking about combining the ERA into the corpus, about creating one solid fund and then just drawing out. That's what it is. It's all smoke and mirrors, it's just platitudes to keep us satiated and satisfied and quiet and quiescent until they can get that big get, get it, get a, get a shot at that big pot of money.
Speaker 1:I think part of it. I think part of it, michael too was they thought there was such room. I mean, we tried to draw the line in the sand at POMV 5050, right, and they, there was such room. I mean we tried to draw the line in the sand at POMV 50-50, right Right.
Speaker 1:And they breached that and I think part of it was they thought there was so much fiscal room between POMV 50-50 and 25-75 that they wouldn't use it up, at least for a long period of time. They'd be safe in making the statement Well, it's like three years later and we're there. And what you don't anticipate the way we have set this state up. What you don't anticipate is oil revenues. And if oil revenues go down on you, the oil revenues don't stick to the schedule that you think they're on and they go down on you. Then all of a sudden, you know the fiscal space you thought you had goes away because a large part of that fiscal space was based on the oil revenue level.
Speaker 2:Yeah, I mean no, no. Chris over on YouTube says, not platitudes, lies, they just didn't want. They don't want, just want access to the corpus. The real target is the future of all Alaska natural resources. I mean, you know, I don't think you're wrong, I think that's kind of where we're at. But access to the corpus makes all their dreams come true as big status. That's what they really want.
Speaker 2:Brad Keithley Alaskans for Sustainable Budgets. The Weekly Top Three continues as we mourn the death of the PFD. I mean I think this might be the first year that somebody actually says something about it, because they're going to have to. They can't just keep saying, you know, 75, 25 will be great, oh no, 80, 20. Oh no, 85, 15. Oh, 90, 10. I mean they're going to have to actually say and, like Brad said, and even the ledge finance document said, they're going to have to talk about new revenues. Everybody was so down on Ben Carpenter for even suggesting that part of the solution might be some form of taxation or something else. It's inevitable I've been saying this for five years it's inevitable that we will reach that point because this legislature cannot control itself. Anyway, one of the big things that I'm sure is going to be one of the big elephants in the room, of course, is the Cook Inlet gas shortage issue, and Brad's got a question what the heck is NSTAR doing now? Brad, what's going on now?
Speaker 1:It's hard to follow the bouncing ball that's going on with NSTAR in the Cook Inlet. In the Cook Inlet, Just for reference, I pulled up a couple of news articles older news articles that sort of defined where this ball has gone so far.
Speaker 1:There's the news article from the middle of 2023 that reports on the presentation by NSTAR and BRG consultant the consultant that the Cook Inlet Utilities, the South Central Utilities, hired to look at the gas situation the presentation that BRG and NSTAR made to the Public Utilities Commission, or the Regulatory Commission of Alaska, as we call it now, talking about the Cook Inlet shortage and the options that the state was facing and all the alternatives that the state was facing, the most cost effective of which, the lowest cost of which was imported LNG. That was the middle of 2023. And in that comment or in that report, they said we were going to finish sort of the next phase of this report by the end of 2023. And we would be back and report at the beginning of 2024 about what direction we were going. We would have an aligned direction, we would have finished, completed the consultant's report. We would have an aligned direction on what direction we were going and we would be back to report to the commission. Well, we've never seen the second phase of that report. It's never, ever, ever been released. The utilities didn't come back to the commission publicly, at least in the beginning, at the end of 2023 or the beginning of 2024, to explain what direction they were going.
Speaker 1:The next set of headlines is from I pulled up the Frontiersman, the article by Tim Bradner, in the middle of 24, july 22nd 2024. And the headline is NSTAR tells regulators it will have a plan to import LNG by year end and it reports on a filing that NSTAR had made, an application that NSTAR had made with the Public Utilities Commission, with the RCA excuse me, regulatory Commission of Alaska, with the Public Utilities Commission, with the RCA excuse me, regulatory Commission of Alaska for $50-some-odd million in pipelines to be built over near Port McKenzie in anticipation of using Port McKenzie building facilities at Port McKenzie for gas offtake off of a floating LNG facility. The pipes necessary to bring that gas that would come off the ships at Port McKenzie and connect into the NSTAR system and through the NSTAR system into the rest of the utility grid, into the gas fire generation plants that the electric utilities use. And that was the plan in the middle of July 22nd 2024. Nstar filed for, got approval for the new pipelines that they were going to build over near Port McKenzie and they told the commission at that time that they would have contracts. They would have a plan in place by the end of 2024 around this proposal that they had made at Port McKenzie.
Speaker 1:Well, the next thing we have is August of 2024. We have a press release or a statement during their earnings call by a company called Accelerate Energy, which is a floating LNG company, that they were in negotiations with Cook Inlet Utilities and that they were in negotiations with Cook Inlet Utilities and that they were deep in negotiations and anticipated having a plan in place by the end of the year. And that lines up. That would line up with what NSTAR told the RCA in the middle of 2024 about what it was doing over at Port McKenzie. So we get to the middle of 2024 about what it was doing over at Port McKenzie. So we get to the end of 2024 and in the and and the really, the really interesting thing is the way this leaked out in the middle of. So. So Dunleavy has the conference where he talks about the big LNG line and and talks about they've entered into this contract with a major player quote major player.
Speaker 2:His foxhole conversion too, because he was against it the whole time.
Speaker 1:and all of a sudden, Well, yeah, this is the export line, the way they've entered into it. Oh right, then Landfield, the Alaska landmine, gets wind that it's Glen Farn Posts, you know, says that they understand this unnamed player that the governor's talked about is Glen Farn. And Glen Farn issues a release and in the middle of the release it says it's been talking to NSTAR and has an exclusive agreement with NSTAR. I don't think NSTAR was ready for this, but has an exclusive agreement with NSTAR around a project, not at Port McKenzie, not at the existing LNG facility that we have down on the Kenai, but a grassroots new LNG import facility at the location where the export facility. The LNG export facility is supposedly going to be built adjacent to the old LNG, the existing LNG plant down in Kenai, the one that's now owned by Marathon, adjacent in, physically in land, but a brand new facility that would be that would be built at that point. And and and. So all of a sudden Glen Farn and I don't think, as I say, I don't think NSTAR was ready for this Glen Farn announces that they've got a deal with NSTAR as part of this overall deal, that they've got a deal with NSTAR for importing LNG.
Speaker 1:So last week NSTAR John Sims goes into the RCA and lays out what its plan is. Now it's just NSTAR. They're not talking on behalf of the other utilities, so we don't know if this is a joint plan. It all started out as a joint plan, a joint study. We were all going to be cost effective and come to this conclusion together. Now NSTAR is off on its own talking about its own plan for an import facility at the site in Nikitsky, the new site in Nikitsky. So they're talking about a deal. This is not a done deal. So they're talking about the potential of striking a deal with a thinly capitalized, a small cap company Glenfarn which, frankly, is not a big company at all by any stretch of the imagination, a small cap company that doesn't own the land at Nikiski. It would get that land, the rights of that land, maybe as part of the bigger deal on the big LNG project, but doesn't own the land. Neither does NSTAR. So they're talking about a project on land neither one of them owns and they're talking about.
Speaker 1:Sims says during his discussion with the RCA that you know, I'm comfortable, we're going to get to this in 2030, 2031. And I think we have enough supply. Nstar has enough supply to get there? Well, not. The other utilities may not, but NSTAR thinks it has enough supply to get there when this deal finally hits home.
Speaker 1:Bob Pickett who, I think, who I respect greatly as an RCA commissioner he's been around since Sarah Palin. He's been on the RCA commission. He's seen, you know, dumb ideas come and go. He's seen. He's seen smart ideas come and go. But he's seen, he's seen a lot of ideas out there. Bob Pickett, during this RCA hearing, tells Sims that he doesn't think he, he's concerned that he doesn't think this deal is going to land in time, if it lands at all. And, and, and, and. Really basically says what the hell are you doing now?
Speaker 1:Sims is very calm, as Sims is about most things. Sims is very calm, says well, we're going to get this deal home, but we don't know what the deal is. I mean, nstar hasn't filed anything to outline what the deal is. Nstar says it has this exclusive agreement with Glenparn to do the deal, but it hasn't released what the exclusive agreement is, what the terms of the exclusive agreement are, if NSTAR has tied its hands in an exclusive deal with this one company that has never built an LNG import facility, is trying to build two LNG export facilities but hasn't't gotten those done yet. Hasn't gotten those to. Fid is is a small cap company.
Speaker 1:If NSTAR is tied its hands to this project on land that neither of them own, if NSTAR is tied its hands to this project, we may be in for a heck of a mess. So I the question is what the heck is NSTAR doing? I mean and and that was basically Bob Pickett's question what the heck are you doing, nstar? Because there's no consistency through all these themes. There's no next step. We're following one step with the next step. The next step always seems to be on some other playing field, as opposed to the playing field that they said they were on up to a given point in time. It is time to have concerns about what NSTAR is doing. It's past time, really, but it's certainly time now to have concerns about what NSTAR is up to and what the terms of this deal with Glen Farn is, and if NSTAR has tied his hands into a deal that's somehow dependent on the bigger pipeline deal working, because the bigger pipeline deal isn't going to go.
Speaker 2:So you were saying that they were surprised by the Glen Farn deal. This kind of caught them by surprise is what your takeaway is from this, and it kind of the public.
Speaker 1:The public announcement of it was, I mean in at the dunleavy press conference, remember there was all this reference to this unnamed company, uh, that that that agdc was working with for the big pipeline, for the big export pipeline, this unnamed company they were working with.
Speaker 1:Well, about five days later it leaks that it's glenn farm, and then glenn farm in its press release, instar hadn't said anything about working with. Well, about five days later it leaks that it's Glenfarm, and then Glenfarm. In its press release, instar hadn't said anything about working with the same company that AGDC was working with. And then, about five days later, it leaks that it's Glenfarm, and Glenfarm then, in response, issues a press release saying yes, it's us, we're doing this deal with AGDC, we're going down the road with AGDC, and then in the next paragraph says oh, and, by the way, we're doing one with NSTAR too, about an import facility. Nstar hadn't hinted at any of that. And all of a sudden here's Glenfarm deciding to come clean with what it's doing up in Alaska and all of a sudden it drops this paragraph in that mentions NSTAR. And I suspect that NSTAR was surprised to see Glenn Farn release his name in the middle of all that.
Speaker 2:Well, we've talked about why we think NSTAR has been dragging its feet. You and I have speculated as to why, and the bottom line is is that they're looking for somebody else to carry the water and foot the bill on this instead of passing it over. And I think John Sims also probably looking for a big win, because there's speculation that he may want to run for governor in the next cycle and so he's looking for some kind of big W to put in his column. And so, between those two things, that could be the main reason why they've been, because, I mean, mea and Chugach have both been like well, we're moving ahead, we're moving ahead to the import thing. They've been talking a lot more positively about that and taking some steps, but Enstar has just been kind of spinning its wheels and being quiet until they couldn't be quiet anymore.
Speaker 1:Yeah, until somebody released the information out from underneath them. I went back and here's the I sort of. I went back, there was a. There was an editorial by the Chugach chairman and the Chugach president a few weeks back that talked about where they were going in the cooking and they said they were going forward with with LNG, imported LNG, right. And I thought, okay, you know, they and NSTAR are probably working on this deal that you know NSTAR announced in the middle of last year up at Fort McKenzie and we're proceeding forward.
Speaker 1:Now you've really got to wonder, because SIN's presentation to the RCA doesn't mention Chugach or MEA or any of them, many of the other utilities with respect to what it's doing and in fact implies that they're now on a different time schedule. When he says when SIN says NSTAR can hold out longer than the others implies that they're now on a different time schedule. When he says when Sim says NSTAR can hold out longer than the others implies that they're on a longer time schedule. So now you got to wonder what the hell Chugach and MEA are doing, right?
Speaker 2:Well, is NSTAR going it alone, right? Are they doing their own, playing by their own thing and playing the lawn game, or?
Speaker 1:what? And here's and here's the deal, michael, these aren't cheap things to build lawn game or what. And here's the deal, michael, these aren't cheap things to build. So one of the advantages of having utilities work together was economies of scale. Right, we're going to build one facility that's going to handle and that shares the demand of all the players. Now you have the impression that maybe we have two facilities coming. Nstar has one on land it doesn't own and the person that's entering into the contract with doesn't own. Nstar's going one way and Chugach and MEA are going another way, and we may end up with two facilities with the costs you know, costs layered on of two facilities. It's a mess, yeah, and there's two ways to get this cleaned up. One is the RCA steps up and says look, you may have the obligation to propose this stuff, you may have the obligation to build this stuff, but we have the obligation to have oversight over you on this stuff. Tell us what the hell's going on, or the legislature does that.
Speaker 2:One thing for sure we know who's going to pay for it one way or the other. That would be. Us just wanted to point that out. I mean, at some point somebody's got to call. I mean at somebody, at some point somebody's got to call the ball and say, hey, whoa, whoa, wait a second.
Speaker 2:Do we need duplication of effort? Do we need two different facilities? At you know, 50 million dollars, at whatever the I mean it's, it's huge money. More than that, yeah, I mean it's huge money. It's more than that. Yeah, I mean it's huge money, right? 50, 100, 200 million, however much it is. Do we need two facilities? And why are we working at cross purposes? And why is NSTAR continuing to drag its feet, only getting dragged out into the light when somebody slips up and mentioned something about what's going on? I mean, again, betting on the if-come is never going to work out for you, right? Never going to work out. You can't be like, oh yes, we're going to build this. Now that we have this, we know we're going to have pipe by 2035. By the way, you're going to run out of gas in 2027. So I mean no big deal. But you know 2035, you know it's insane and it's like everybody's waiting around for the legislature to do something, like they are decisive and have got an idea of what's going on.
Speaker 1:Well, and the legislature has no business in this right. The utilities have a certificate, have an obligation in exchange for their monopolies. Utilities have an obligation to provide adequate service at reasonable cost. It's the utilities obligation to do this. It's the regulatory commission of Alaska's obligation to oversee that the utilities, because they're monopolies, because there's no alternative for rate payers to go to, for consumers to go to. If the utilities blow this, the RCA is set up to oversee it. We've got a system in place to handle this.
Speaker 1:The legislature has no business getting involved in this. The only time the legislature needs to get involved in this is if the RCA doesn't do its job in oversight of this. And the RCA is right at the cutting edge of not doing it, right at the bleeding edge of not doing its job in terms of oversight of this. But we don't need I mean, what we don't need is the legislature saying, oh well, we need to get more royalty relief, we need to give out more dollars to producers, we need to bear some of the costs of these import facilities ourselves. It's a mess, michael, and I don't think I emphasized enough the concern I have about NSTAR being tied to Glenfarm, about NSTAR being tied to Glenfarm. Glenfarm's big objective here is to do the big line, the AKL and G line, and to take over the AKL and G line. That's where their money is going to be made.
Speaker 1:I don't know how the heck NSTAR got tossed into this, but they did somehow. But the Glenfarm deal with AKL&G is far from done. Far from done. I mean. Even Frank Richards said the contracts are months away. Far from done, and actually doing something depends on financing and they haven't even remotely got the financing put together yet.
Speaker 1:So is NSTAR the tail on the dog? Is the NSTAR deal with Glen Farn the tail on the dog while Glenfarm works on the big deal? A Cook Inlet can't stand that sort of. You know, cook Inlet's not on the same time frame that the big line's on. And so if NSTAR is waiting around on Glenfarm to sort of look back and concentrate on its deal with NSTAR once it has its deal with the big line in place, because that's the only time Glenfarm will get rights to the land, that this proposed facility goes on, then we're just sitting around twiddling our thumbs, waiting on something that likely will never happen, but if it's going to happen it's going to be months down the road. Nstar needs to be on the job now. Needs to be filing in applications, needs to be filing for permits, needs to be putting together the deal to have the gas together. The utilities cooking utilities need to be doing that now and they're not.
Speaker 2:Everybody's waiting. Everybody's waiting for Uncle Sugar to open up his pocketbook and give him some money. And of course they will, because they have to do something right.
Speaker 1:But Uncle Sugar go back to the first segment.
Speaker 2:Uncle Sugar has no money, yeah, he opens it up and the little moths come out of the wallet. That's what's there. There's IOUs in the wallet. I mean that's the problem, but we've gotten so used to that in this state. That's what everybody's doing, everybody. That's the problem, but we've gotten so used to that in this state. That's what everybody's doing. Everybody's waiting for the state to come up, belly up to the bar and buy drinks for the house.
Speaker 1:That's what they're waiting for right now. Well, hopefully they'll be waiting a long time for that, because Uncle Sugar has no money. Let's go back to segment one.
Speaker 2:Let's go back to what Ledge Finance told us. But I know that brad, you and I both know that. But do you think, do you think, that the legislature is gonna have that aha, come to jesus moment where they realize, oh, we can't do that? Do you really think that they're gonna be like we've got to cut some stuff? You know we can't. We can't give all this stuff. We've been talking about it for a year. You know we're gonna give you all can't. We can't give all this stuff. We've been talking about it for a year. You know we're going to give you all this new funding. We're going to do all this new school stuff we're going to do to find. But do you really think that they're going to? You know, come to that, look at it and go, oh, I guess we can't. I mean, or I mean what PFD draw.
Speaker 1:CBR draw Burton Lyman turned out to be liars. Burton Lyman turned out when they said that they were going to draw the line in the sand at 75-25,. They were liars.
Speaker 2:Yeah Well, won't be the first time that politicians turned out to be liars. All right, won't be the first time that politicians turned out to be mistaken to be more polite, but this is I mean, this whole thing is just so astonishing to watch. Okay, brad Keithley. Weekly Top Three continues down to the last segment here for today, and today, the final one. We're going to talk about political mutism, the ability to mutate and more follow, the morph, morphism, camouflage, the chameleon effect. What are you? What are we talking about here?
Speaker 1:no, no, no. Selective mutism is something different. Okay, selective mutism is defined by the health service as an anxiety disorder where a person is unable to speak in certain social, social situations, such as with classmates at school or relatives. Okay, they do not.
Speaker 1:They do not see, very often, it's it's, it's it's muted, it's they go mute, mute, right being mute, not being mutable, but being mute okay, they can't talk in certain situations and it evidently not for you but for those people who watched the Big Bang Theory over the years, it's the anxiety disorder that Raj the character that played Raj suffered from. He couldn't talk in the presence of women. Raj couldn't talk in the presence. He could talk when he was with his friends, his bros. He could talk when he was, you know, dealing with scientific matters with other males, but he couldn't talk in social situations in the presence of women. He had selective mutism in those situations.
Speaker 1:All legislators if I looked at it hard enough, but certainly certain legislators and certain commentators with respect to the issues that the legislature is going to be dealing with this year, the issues that the legislature should be dealing with this year. It really came to mind hardest when I was reading a blog by Matt Buxton. Matt Buxton for years was a respected reporter up at the Fairbanks News Minor. I read Matt's work as often as he wrote it, as quickly as I could after he wrote it, because I really respected his insights into the political process in Alaska. A few years ago, matt went over and became a blogger, left the news minor and became a blogger and increasingly has identified himself as a progressive blogger taking the progressive side of things, and in his most recent Friday memo, alaska memo, which he writes in advance of the coming legislative session, he talks about the focus on working class issues. While there are many unknowns about the years ahead, there are many reasons to be optimistic about the incoming bipartisan coalitions in the Alaska House and Senate, which have made addressing working class issues, like education and retirement, a key part of their platforms. Well, there is no more, in my opinion. There's no more a working class issue. No greater working class issue than the PFD. No greater working class issue than the discriminatory, regressive, hugely disproportionate take of income from middle and lower income. Alaska families, through PFD, cuts a targeted tax on middle and lower income, which are classified as working class families. No greater issue than that on the revenue side. And yet Matt writes this entire column focused on talking about how the House and Senate are going to focus on working class issues without mentioning the PFD. Once it's mutism. It's mutism. I mean the, the, the, the progressives, the moderates just don't want to talk about the PFD because that's how. That's how they're financing all of their, all of their special projects, all of their special spending that they want to accomplish and they just, they just don't talk about the elephant in the room they just don't talk about. They just don't talk about the impact of PFD cuts on working class Alaska families.
Speaker 1:Another example of it I was reading the Alaska Current, which is sort of the left's version or the moderate's version of Must Read Alaska left's version or the moderate's version of Must Read Alaska and in another article written by Matt Buxton, this on incoming representative Kai Holland from South Anchorage. The title of it is Independent Kai Holland Brings Entrepreneurial Spirit to Juneau, and the entire column is focused on Kai's background as an entrepreneur. Proposals Kai is going to have in terms of legislation for identifying entrepreneurial policies that the state ought to adopt, pursuing entrepreneurial policies, policies that support entrepreneurs that the state ought to adopt. Well, there's no greater issue to entrepreneurs than access to capital and in terms of small businesses, small startups, there's no better capital. I mean, we've seen economic analyses of this there's no better capital available to small entrepreneurs, to startups, than PFDs. They come in a chunk, they come at one time, are an available source of capital to small businesses and entrepreneurs to help get them started. We've seen testimony to that effect that that's what PFDs are used for.
Speaker 1:And so we go through this entire article. Matt goes through this entire article, including an interview with Kai at various places or quotes from Kai at various places about what's needed to form, to create entrepreneurial spirit in Alaska, to create entrepreneurial opportunity in Alaska. In fact, no mention of capital formation in the entire article. It's just mutism. It's just, you know, we're not going to talk about that thing because we don't want to talk about that thing, because that thing, while it's important to us, while it's important to working class Alaska families, while it's important to entrepreneurs, we don't want to talk about it. We're going to go mute about approach Right, mute about that approach.
Speaker 2:We're not going to say the quiet part out loud because we know that it will offend. We know that we don't want to say it out there just because because we know people will be upset about it and we want to kind of slide it in.
Speaker 1:Well, we want. We want access to the money. I mean, basically is what it is, no-transcript would give them capital formation for entrepreneurial efforts. We don't want them to have that money, so we're not going to talk about it. Here's the thing that really stung me, or really got me going at the end of Matt's article about Kai A top-down approach this is quoting Kai. A top-down approach to economic growth, where state officials and legislators pick and choose the winners, hull and said, doesn't work nearly as well as when innovation emanates from the ground up. It's an old-school view to think that we can have this perfect knowledge to pick some bright, shiny direction, create a plan for the next big thing. What we've learned from economic development is you have to have this iterative process that sees the opportunities and takes the next step to move that direction. Well, the opportunities are created only if the entrepreneurs have access to capital.
Speaker 2:Right, you missed a whole point in there. One minute, Brad. One minute.
Speaker 1:Well, you did miss the whole point. The whole point is it shouldn't be top-down. Yet the funding mechanism they're using and the funding mechanism that they're ignoring is top-down. It's taking money into the state as opposed to leaving it in the hands of Alaska families taking it into the state so the state can decide who gets the money and who gets to be the winners and losers. This mutism is just undoing everything they claim that they're trying to support.
Speaker 2:Yeah Well, but again, this is what they've been. They've been bum about this whole subject the whole time. They're never touching on it and the news media is mostly complicit. Like you said, this current article doesn't mention it once. What's his face? Matt Buxton doesn't mention it once. It's like it's one of the biggest economic drivers in the state and it's like, as long as the state's taking care of the private economy, we really don't care.
Speaker 2:That's the message that continues to be said. I mean, and Kim just said, we need a deep clean of legislators. We've tried, but there's that crew legislators. We've tried, but there's that crew. There's that small cadre of business-as-usual people who've been there for, you know, since Christ was a corporal. And here we are, they're still driving the bus, they're still doing it and they've, in some terms, corrupted some of the newer people that have been brought in with the same kind of thinking. I mean that's and now we've got a slate, a new slate of legislators, some of whom are we're already on board the bandwagon of. We've got to spend it all, because you can't be trusted to spend your own money in the private economy, Doesn't matter. I have to laugh when he's like, oh, he's an entrepreneur and he's doing all this is really because that's how you'd run a business. You have to have an iterative process, you have to have a. You can't do.
Speaker 1:I mean it's oh man yeah, the paragraph that really sent me into the stratosphere was a top down approach to economic growth, where state officials and legislators pick and choose the winners, holland said, doesn't work nearly as well when innovative innovation emanates from the ground up.
Speaker 1:Yet the PFD sucking up the PFD, diverting the PFD to government so government can decide where to spend it instead of individuals is the biggest top-down program you possibly can have. That's the one that's sucking up. That's taking capital out of the hands of Alaska citizens that they need to start, that they would use to start new businesses, that they would use to be innovative, they would use to have hobbies. They could turn into businesses. It's capital that if you put it into the hands of people will do a number of things, including turnover, more times in the Alaska economy the local Alaska economy than being spent by the state. It will generate more economic growth. Cutting that off and diverting that money into the state is the biggest top-down program in this state's history and yet it's one that Holland and Buxton and all of the other people who write about this stuff don't talk about at all. They just go mute whenever that issue comes up because they don't want to confront it.
Speaker 2:Well and, in all fairness, even people like Suzanne Downing and others, if they touch, they touch on the PFD. It's just like a brief. They don't ever get down into the weeds on. You know, fiscally, you know, does this make sense or anything else? And it's, it's frustrating. It's frustrating to watch, for sure.
Speaker 1:Well, I mean Republicans have their own programs right. We want to. We want to help out Cook Inlet, we want to give revenue back to the back to producers in in in Cook Inlet. I mean, it's just, and you know, julie Colom had the childcare situation. It's just the childcare program. It's just, everybody's got a program they need revenue for and they'll just grab the revenue that's going to middle and lower income Alaska families without even talking about it.
Speaker 2:Yeah, we want to cut, but oh, not my program. That's the thing, and that's you know, that's a problem nationwide. Oh, we want to cut, just not my program, because my program's important. The rest of them can be cut, but you know, not realizing that austerity has got to be across the board. If you're going to make cuts, you've got to everybody's got to feel the pain. It can't be not in my backyard, because eventually arithmetic is going to win. I mean, there's just, there's just no. And we're seeing it this year in alaska, like you were talking about earlier, with that projection that said, yeah, 75, 25 not going to fill the bucket this year. So it'll be 80, 80, 84, 15, and then next year, as things continue to increase, it'll be even I. I mean right, I mean I'm not wrong, right, arithmetic is going to win in the end.
Speaker 1:You're not wrong, michael. I mean, we let legislators all of whom are in the top 20% themselves by virtue of the pay increases they got. We let legislators decide that they're going to exempt themselves from having to pay for these programs by using PFD cuts. They're going to exempt themselves and their donors, their friends, their donors, who are also in the top 20%. We're going to exempt them from having to pay for these programs. But we're not going to stop the programs. We're just going to continue exempting our friends from the programs. Even if we get to the line in the sand that Burton Lyman drew at 75-25, we're going to keep going Right.
Speaker 1:Because, we're going to keep exempting our friends and we're going to keep, we're going to keep these programs going. It's, it's a mess.
Speaker 2:Yeah Well, I mean, and here's where we live, I mean, and being able to tell all the folks later on that I told you so is not nearly as satisfying. I don't think for me or Brad, but he and I have been talking about this for 10 years together and another 10 years probably previously. I was talking about this 20 years ago this same kind of thing that this was the ploy. The ploy was to get access to the corpus to be able to grow the size and scope of government outside of the control of the public.
Speaker 1:That's what it's about scott goldsmith started telling us in 2008 this was coming. You, you, in 1999, but scott goldsmith started writing papers in 2008 that this was coming. Yeah, and and if you follow those papers, we've we've just gone down that track, the track that he outlined, that the state was on that everybody at the time said oh no, we'll never do that.
Speaker 2:Yeah, maybe they used it as a roadmap. Maybe they used it as a roadmap. Oh, scott's got a good plan here. Maybe we should use this. I mean, it's completely frustrating. All right, brad. Well, thank you so much for coming on board. As always, it was painful and enlightening all at the same time. So thank you for thank you for being part of it today.
Speaker 1:Well, well, maybe, maybe you're going to get ibuprofen as a gift here during the.
Speaker 2:Yeah, I think I might need some ibuprofen. You know some, uh, some do some ibuprofen in the one hand and etc. In the other, and you know, just kind of double-fisted at this point. So, all right, brad keithley, thank you so much. My friend Appreciate you coming on board. Michael, as always, thanks for having me. Thanks so much.
Speaker 1:Well, that's a wrap for another week's edition of the Weekly Top Three from Alaskans for Sustainable Budgets. Thank you again for joining us. Remember that you can find past episodes on our YouTube, soundcloud, spotify and Substack pages, and keep track of us during the week on Facebook and Twitter. This has been Brad Keithley, managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week on the next edition of the Weekly Top Three. Thank you.
