The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (5.12.2025)
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 May 12, 2025.
This week, our top 3 issues are these: 1) we explain why Alaska’s current fiscal dilemma reminds us of a game of chicken and what it will take to resolve it (2:04); 2) we discuss what role the Governor should play in resolving the dilemma and why Governor Dunleavy’s actions are lacking (18:34); and 3) we discuss how the failure to resolve the dilemma is adversely affecting Alaska’s private sector business climate and confidence level (38:11).
The Weekly Top 3 is a regular weekly segment on The Michael Dukes Show. The Show broadcasts on Facebook and YouTubeLive as well as via streaming audio from the Show’s website weekdays from 6–8am. We join Michael weekly in the first hour of Tuesday’s show, from 6:25–7am, for a discussion between the two of us about our three issues.
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 May 12, 2025. The weekly top three is a regular segment on the Michael Dukes 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.
Speaker 1: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 project's 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. This week, our top three issues are these First, we explain why Alaska's current fiscal dilemma reminds us of a game of chicken and what it will take to resolve it. Second, we discuss what role the governor should play in resolving the dilemma and why Governor Dunleavy's actions are lacking. And third, we discuss how the failure to resolve the dilemma is affecting Alaska's private sector, business climate and confidence level.
Speaker 2:And now let's join Michael, the stuff from the governor. The latest it's like some people just discovered that we're in a crisis and everything else. I guess we'll start off with the fiscal game of chicken. And you said the news minor blinked. Tell me what you mean by that. What's going on?
Speaker 1:Well, increasingly over the last couple of years, I've been viewing our fiscal dilemma as a game of chicken, with those who are taking a position that we have to have a full PFD and cut spending on one side and those who take the position that no, we need to keep spending and we need to take it through PFD cuts on the other side and just sort of both of them heading toward this crash that we'll talk about in the second segment. Both of them sort of heading toward this crash and seeing who blinks. And for those who want to increase spending, they sort of view it from the top and they don't really care, I don't think, where the money comes from for the spending. They just want the money to come from the spending and they're looking at it as wherever it's easiest to get it from, they'll take it. So you've got these two forces those who want to cut the PFD to fund spending and those who want to cut spending to fund the PFD just sort of heading toward each other in a game of chicken. And the question is, in any game of chicken, who blinks, who pulls off, who diverts, who gets out of the way? And it's been interesting to watch the various players in the game over the course of the last several years and watch who's blinking and who's pulling away and who's saying no, I will give up on my side and let the other side have it. The news minor is the latest to blink, probably a minor player in the scheme of things, but they're the latest to blink.
Speaker 1:And they have had an editorial that says welcome to the PFD that's headed welcome to the PFD wars a full dividend or a functioning state. And they define the battle as that, as either you're going to have a full PFD If you're going to have a full PFD, you're going to have to cut spending and you're not going to have a functioning state. And so, from their standpoint, the perspective seems to be we need to cut the PFD and pay for government through PFD cuts. And this whole editorial is really a rationalization of why they're blinking and why they're saying no, we need to cut the PFD in order to fund government. They sort of accept like you want in a game of chicken, I suppose they sort of accept the premise that there's not a third way, what there is when you normally have, when you normally are able to resolve a game of chicken successfully, you find a third way. You find it's not all this way, not all you know cutting the spending or it's not all cutting the PFD. There's a third way. And the third way in this case would be coming up with an alternative source of revenues to cutting the PFD. And normally in a game of chicken you have people who are trying to find that third way but the news miner goes all in basically and sort of rationalizes away the third way that we're not going to be able to get to. The third way we're not going to be able to have a resolution of this short of somebody crashing. And so, in their opinion, the force that ought to win is the force that proposes more spending at the expense of the PFD.
Speaker 1:And it's always interesting to watch these rationalizations spin out as people try to justify their position on this particular conflict.
Speaker 1:They begin with a brief history of the brief history quote or colon, the PFD's original purpose, and everybody has their take that fits their particular argument, their take on what the PFD's original purpose.
Speaker 1:But the Newsminer now, the original purpose that the Newsminer comes up with was it was intended sort of as a temporary thing when we had a surplus, but now the surplus has gone away. It's no longer viable and it's consistent with the history to take it away. Then they have a subheading, the 2025 reality check, which is we are coming to the crash point and the next subheader is the full PFD fallacy, that is, that we can't have a full PFD because, of course, we have to deflect, we have to drive the PFD off the road because we have to keep spending, and then the final subheader is what comes next. The question isn't whether the PFD should exist. It's whether we, as Alaskans, are ready to make hard choices about what matters most. Do we want a smaller dividend and strong public services, or a larger dividend in a threadbare state? It's time to stop pretending we can have it all.
Speaker 2:I just can't with these guys. I can't with these guys. I mean, have they just not read? All you have to do is go back and read the statements in the minutes of the formation of the PFD. All you have to do is go back and read Hammond's works on diapering the devil. He talks exactly why he did what he did, why he pushed that. I mean, they, they, they discuss it on the floor. This is not some kind of amorphous. Oh, let's guess why they did this.
Speaker 1:It was not a short-term deal. That was not. I mean, I can't even with these people, but it would get in the way. It would get in the way of their rationalization if they had, if they actually went back and tried to do an actual history on why the PFD got created. It would just get in the way of their rationalization. So they don't go through all that. They just say, oh well, it's intended as temporary. You know, it was put in the way of their rationalization. So they don't. They don't go through all that. They just say, oh well, it's intended as as as as temporary. You know, it was put in the statute. It wasn't put in the constitution, which I've heard that argument before. You know, back then we thought statutes meant something. I guess. I guess we should have been omniscient and known that statutes didn't mean anything, but it's, but it's, but it's. It's a rationalization.
Speaker 1:But the thing that really strikes me about this op-ed and others, when people in the game of check-in decide which way they're going to divert off the road, is that you don't look for a third way. It's either got to be one way or the other. It can't be the middle ground. It's got to be one way or the other. And so, from the news miner standpoint, it's got to be that we cut the PFD in order to keep spending, in order to avoid having a quote threadbare state and keep pushing forward on spending, and thus we need to use PFD cuts to fund that spending. And I find it, you know, this game of chicken is just is is, you know, it's it's who blinks first, and the top 20%, non-residents, non-resident industries, the tourism and fishing and and the oil industry are all counting on, you know, those supporting the PFD to blink and to and to pull off to the side of the road so they can keep right on going through, don't have to contribute toward the cost of government, they can keep right on going through.
Speaker 1:And I think that, and those who want to increase spending, as we saw in yesterday's vote on the defined pension, they don't want to, they're not going to blink, they don't think they should blink, they just keep on, they just keep on going. And so you have people who ought to know better, who ought to be concerned about 80% of Alaska families, who ought to be concerned about middle and lower income Alaska families. They're blinking and they're pulling off to the side of the road and letting the forces of spending and the forces of protecting the top 20% while they're spending win the game. And I just it's disturbing.
Speaker 1:I mean the news minor, the news the editorial boards of the papers ought to be thoughtful enough to say look, there's a third way. We don't need to be crashing these cars into each other. We don't need to be saying it's all one way or the other way. We don't need to be saying it's all one way or the other way. We don't need to be rewriting history. We need to look for a way that resolves this situation in a way that avoids the crash. But the news minor has gone all in, it seems, on avoiding the crash by giving up on middle and lower income Alaska families and diverting the car away from protecting the PFD and letting the forces that want to spend and protect the top 20% non-resident in the oil industry while they're doing it Just keep on going.
Speaker 2:Just advocating again for more and more government spending. I mean, again, it's shocking to me how many people organizations, editorial boards, politicians all of a sudden just discovered that we're in a fiscal crisis. It's like, I mean literally. I mean even the governor I know you're going to get into this in a little bit, but even the governor have you not been reading your 10-year forecast for the last five years? I mean, all of a sudden, it's now, it's a crisis. You know in the news, oh, now it's a crisis, now it's a.
Speaker 2:I mean, come on, this has been going on for years and the one thing, what is the one common thread between all this, is that we just continue to spend more than we have. I mean, I don't know how to be more plain about it. That's, that is the one commonality between this whole. The problem for the last 30 years in this state is that we have always spent more than we have, and that's just the one thing. They don't even address it. Hardly any of the stories even address it that this could potentially be part of the. I mean as a potential, it might be part of the problem right it's all, just we don't have enough money.
Speaker 1:Well, the newsbinder certainly doesn't address that aspect of it. They don't address the aspect that we've overspent or we're overspending on things, or that we have to get our spending house in order as part of this. To them, it's just a binary decision. It's either continue spending, cut the PFD, or continue the PFD, cut spending. And we can't cut spending because it will send the state into some sort of shock. So it's a very black and white. What the Newsminer editorial paints is a very black and white world, and it's not a black and white world, as the Fiscal Policy Working Group in 2021 concluded. It's a very gray world and to resolve this situation, we need to deal in the gray. We need a little bit of everything to deal with the situation. But the Newsminer doesn't see it that way and as I read it, it sort of reinforced my perception that this is all about a game of chicken and who's going to blink, and the Newsminer editorial board blinked.
Speaker 2:Yeah, absolutely, which, again, not unexpected from the Newsminer editorial board and many of the other editorial boards in the state. Quite honestly, brad, this is it. I mean I'd like to say it's shocking, but it's. It's really not, but it's just so. I guess demoralizing at times to see these people going on and on and on about how, you know, well, we have a revenue, we just need more revenue.
Speaker 2:And all I could say is have you seen what they've done with all the revenue we've given them thus far? I mean starting in 1969 and moving forward from the time I've been alive, my entire lifetime. They got that first check and they, you know, like it was a house of fire and they've never stopped. They have never, ever stopped and and nobody has been. Like you know, maybe we should just, you know, spend what we have and abide by what the statutes say and do those kinds of. But you know, it's, it's. It is demoralizing in some ways to think this is the, this is the same problem. And you know who knows, maybe in 25 years we'll look back and still have the same problem after we burn through the PFD and most of the permanent fund and everything else, and then we'll be taxing everybody and we'll still have the same problem. I mean, I don't know if these people are going to. You know, I don't know if these guys are going to ever figure it out.
Speaker 1:Well, it's, yeah, it's just. I mean, it's a stare down contest or a game of chicken, or however you want to put it, and they're just waiting for the other guy to blink. I mean, I mean, you know yesterday's vote on the defined benefit, how we're going to spend this and, and we need to spend it. We have to spend it and we're going to spend it, and, but it's going to come at the expense of somebody. It's going to come at the expense of somebody. It's going to come at the expense of middle and lower income alaska families in terms of, in terms of pfd cuts. But we have to do it and there's no, there's, there's no compromise about this. It's either one side wins or the other side wins, and, and the news minor just reinforces that and says, yep, it's one side wins or the other side wins, and we're gonna, and we're gonna give up and and let side wins or the other side wins, and we're going to give up and let the other side win. We're going to let the other side, the forces of spending and the forces of avoiding paying for it, through on the top 20% non-resident oil companies. We're going to let them win. And it's just.
Speaker 1:You know, every time I see one of these, my mind goes back to the fiscal policy working group who worked through these issues and deserves a lot of credit for finding a middle way through these issues and finding a way to resolve these issues in a way that doesn't that spreads the burden amongst everybody, including spending cuts and a spending cap, that works through these issues in a way that avoids the crash and avoids a game of chicken where one guy has to go off the road or one guy ends up going off the road and when I see the news, minor just taking sides now basically and saying, yeah, we give up, we're going to drive our car off or we're going to drive the PFD car off the road, those who want to spend, those who want to protect the top 20%, etc.
Speaker 1:We're going to let them win the game. What help is that? I mean you're destroying one part of the state, you're destroying the underpinnings for middle and lower income Alaska families in order to do something else and there's just no sense that we have to find a middle ground, reinforcing that.
Speaker 2:we have to find a middle ground, destroying the private economy as well, because it's all basically goes back to the government. Now, chris and I normally agree on most of the things he says, but I disagree with this. He says why do we still talk about the fiscal policy working group Like it was a real effort, fake news, pure theater to create the appearance of doing the people's work? I disagree. I talked in depth with many of the people who were part of that and it was a knockdown, drag out struggle because it was such a dimor, you know, dichotomous group of you know left and right and chamber and or both chambers and everything. I mean they worked really hard to try and find something that would work and it was a compromise. So I disagree with that. I think it was a good plan. Um, the problem is nobody wanted to implement. Uh, in the end nobody was happy with any of the pieces outside of the working group and then the working group itself really didn't push much on it after the meeting itself. I don't think it was fake news. I think it was just too painful. It was the truth and it was too painful for people to pick up on. They just didn't want to do anything with it. Brad Keithley Alaskans for Sustainable Budgets.
Speaker 2:The weekly top three continues this morning as we go on. We were talking about the big game of chicken and now we move over to how's the governor's timing doing. How's he, if you're going to rank him, how's the governor's time? I mean, I had to laugh because this last Friday governor sends out this urgent letter. I'm freezing everything. I'm doing all this stuff because, wow, we've got a crisis.
Speaker 2:And again, all I could think of was have you not been reading your 10-year forecast for the last five years? I mean, like this is some big shot. It was the same thing that many of the legislatures. They all of a sudden, they were pale-faced like oh my God, we're out of money. And then the governor now putting out the second piece where he sends the letter to Edgeman and company and says we need to come up with a new, we need to come up with a group or a committee that could figure we did in 2021. We had a perfect. It's like, all of a sudden, how's your timing, mike? I mean it just it seems. It seems ridiculous to me. It is.
Speaker 1:I mean, I just look at this session I mean the governor's, as you've, as you pointed out, the governor's own 10 year plan showed huge holes, showed huge amounts of red. Having draining through the remainder of the CBR and having nothing to fit fit in those blanks, a huge amount of red going out, that was, if there's ever been an indication of the crisis. It was an indication that the governor's giving up. He's got no revenue plan, he's got no spending plan. He just assumes spending continues. He assumes that there's no revenue offsetting revenue to develop it. He just runs through the CBR and drains it and then there's red throughout the remainder of the 10 year plan. If there was ever an indication of a crisis, that was it in his own 10 year plan. And yet he, you know he did not declare a crisis, then he didn't declare the, the need to develop a, a response to it, and he just, you know, he just let it go. And then he says things like, well, I'm not going to, I'm not going to, I'm going to let the legislature figure this out, I'm not going to propose revenues. If the legislature wants to develop revenues, that's great. Let them figure it out and I'll consider it. Well, then the legislature wants to develop revenues, that's great, let them figure it out and I'll consider it. Well, then the legislature does that in a way. It figures out some portion of revenues and now the governor says, oh well, not those. I mean I'm going to let you figure it out, but then when you figure it out, I'm going to say not those and tell you I'm going to veto those. So it's just, it is odd timing.
Speaker 1:I think the best chance we had, chris notwithstanding, I think the best chance we had for dealing with this was when the fiscal policy working group came out. And I think the governor at that point should have backed it up and said okay, it's a difficult situation, the legislature has named this committee, named this commission to look at it. They developed a solution. It's not perfect for anybody, but it's a good middle of the road compromise. I'm going to back it up and I'm going to have legislation that follows through on it. But he didn't do that. He just sort of, you know, said just let it sort of drift off in the night when Ben Carpenter proposed individual bills that would implement pieces of the fiscal policy working group in the Ways Committee, ways and Means Committee last legislature. It would have been great, it would have been useful, it would have been fulfilling his role If the governor said yep, I'm not, you know, this isn't perfect, but it's a good compromise of all the situations. I'm going to back Ben's legislation the legislation that's in the Ways and Means Committee and I'm going to put my weight behind trying to pass it.
Speaker 1:But he didn't do that. He just let it sort of sit out there and let it get picked off a piece at a time, because it was individual packages as opposed to a comprehensive package. He let it get picked off a piece at a time. So his timing has been horrible throughout all this.
Speaker 1:And now we get to the point where oil prices are dropping again and we're facing a situation where we don't have much in the CBR and everybody's starting to have to confront the fact that we don't have much left in the CBR. And we are confronting this fiscal situation, but late in the session, after everybody's worked through these situations, all of a sudden, yeah, we need a fiscal commissioner, we need to work together to try to find a solution to it. Well, we were there once before. We were there in 2021. So maybe we get there again. Maybe the governor participates this time. Maybe the governor backs it up this time and maybe next session you know he supports or in a special session. If it comes to that he supports, you know the principles that people come up with.
Speaker 1:I mean, I don't know if Ben would say this, but at least from the outside, looking in, every time you stand up, every time a legislator has stood up and said look, we need to come to a comprehensive solution. We need to, we need to, we need everybody needs to give a little bit. We need to have a spending cap, we need to cut spending, we need to have some alternative revenues, we need to modify the restructure of the PFD a little bit down to POMV 50-50. Everybody needs to give a little bit. Every time a legislator sort of goes out there and does that something that you would think the governor would be supportive of because of what the governor said at various times, something you think the governor would be supportive of, you sort of turn around I mean from Ben's standpoint.
Speaker 1:Again, looking at it from the outside, from Ben's standpoint, you sort of turn around. The governor's not there, right? He's off in some other dimension, and so you're sitting there by yourself taking slings and arrows that the governor ought to be backing you up on Right, and you just sort of disappear. So you know, yeah, maybe he's serious this time. Maybe we'll figure it out this time. Maybe he'll stick around long enough in the state to work it out. Maybe he'll stick around long enough in the state to back it up, but looking at history, he sure as hell hasn't done that to this point.
Speaker 2:Well, and I guess in Dunleavy's defense he attempted to do this with his first budget when Donna Ardwin was there and uh, and of course he got the hell kicked out of him, right. And then I had to laugh because last week in the press conference Bert Stedman said well, you know, we really hope the governor comes back with a budget next year where he's cut. You know, he's made the suggested cuts to the thing. And I'm like he did that and you guys rained hell on him because he proposed to cut 8% of I don't think it was 8%, but he proposed to make these cuts. And you guys said it was the apocalypse. I mean this is come on. I mean now it's the governor's, it's his shell game of blame back and forth.
Speaker 2:Like I said, everybody and Mia Costello said something the other day about well, nobody liked parts of it. Well, you're right, that's the legitimate scheme of any compromise. Is the fact that everybody is unhappy with some part of it, right? Of course nobody's going to be happy. Nobody's going to want to be the bad guy to say, no, I'm sorry, your program's gone, or there's no money for that, or I'm sorry, we can't do this. That's the thing. Everybody is in avoidance mode, trying to avoid the pain of being the person that does it. The governor tried it, got kicked and now he's like a whipped dog. He spent the last you know seven years as a whipped dog on this deal and it's just come on, guys, get with the program. If we don't do something, it's going to be catastrophic.
Speaker 1:That's the thing do something, it's going to be catastrophic. That's the thing it is. And people don't like parts of it. And so we go back to the first segment. I mean, it's like this game of chicken right, who's going to blink? And the people that want to continue spending, the people that don't want to pay for it themselves, those in the top 20% non-resident oil industry, those who want to continue spending but not pay it for themselves, just keep barreling down the road thinking that the other side is going to blink. And then you get stuff like the Fairbanks News Minor editorial that blinks, and so that sort of reinforces them. Yes, we'll just keep pressing down the road. Compromise yeah, we'll talk about it, but then we'll just keep pressing down the road. It takes good faith, it takes participation from both sides, but it also takes the guys on your side backing you up when you do it. And when Ben and others on the fiscal policy working group made those compromises and then Ben proposed the pieces on the House side and the Ways and Means Committee. It takes your guys backing you up to make sure that, to push it through.
Speaker 1:And I think what Ben found again looking from the outside I'm not going to speak for Ben. But again, looking from the outside, I think what he found was he put it out there. He took the stuff in the fiscal policy working group and put it out there, and put it in bills with his name on it, including the sales tax, the ultra broad-based sales tax. Put it out there and then when he looked around, nobody was there. All these guys had said we need to compromise, we need to come to some solution. Ben put it out, ben took what the fiscal policy working group did, put it out there and then everybody else was off doing something else, including the governor. So maybe the governor sticks around this time. Maybe the governor actually goes through with it this time. Maybe the governor actually finally puts the sales tax that he talked about in 2023, I think it was puts the sales tax that he talked about on the table, and so we have alternative revenues to deal with instead of PFD cuts, and then we have the spending cap and then we have the other components and maybe the governor backs it up this time.
Speaker 1:But this sort of I mean you said you were sick of the circus this sort of it's important, then it's not. It's important, then it's not. It's important, then it's not, it's important, then get out there, front for it, uh, put it all together and then, and then you know, don't leave you just going off someplace else, that's sort of. That's sort of in and out, in and out, in and out. Just you know, nobody trusts it anymore, nobody trusts the system anymore as in. And it's emboldening again going back to the game of. And it's emboldening again going back to the game of chicken. It's emboldening them who think that they can continue spending and not bear a portion of the cost the top 20% non-resident in the oil industry not bear a portion of the cost. It's emboldening them to think that they're winning the game of chicken and they just keep shoving and shoving and shoving and shoving and shoving, with, you know, those on the other side not pushing back very hard.
Speaker 2:Well, and I guess that was again one of the more frustrating things is to watch people like Ben do the hard work, try and get what they did to the floor, and then to watch the rest of the fiscal policy working group that you know members most of the members were still in panel, were still elected, were still there and to watch them kind of go. Oh yeah, that's nice. You just stand there all by yourself and again going back to the governor's original plan that he put out with Donna, and you know you had legislators like yes, yes, yes, oh, except for that, don't, don't cut my. You know you had legislators like yes, yes, yes, oh, except for that, don't cut my. You know the Delaina Johnson's don't cut my ag, or don't cut this or I just she was the first one to pop in mind, but there are plenty of other Republicans who are like, oh well, no, you can cut, but just don't cut my backyard, don't go cut.
Speaker 2:Everybody's going to feel the pain. I mean, everybody's got to feel the pain If we're going to fix it. It's the same problem we have at the national level. Everybody's got to feel the pain and nobody wants to do it. Uh, nobody wants to be the bad guy that they. They want to be the ones that take all the accolades for giving all the stuff. They don't want to be the bad guys that say, well, now you're cutting what you know. Well, sorry, well, sorry. They're not trying to explain reality to these people.
Speaker 1:They just want to be the heroes that give all the projects and the monies and the programs, but not the ones that say, hey, we've got to be fiscally responsible and we're not going to get to a solution, Michael, we're not going to get to a solution until the governor backs it up forcefully and says look, if we don't do this, if we don't find some common ground, if we don't enact the fiscal policy working group or if we don't enact whatever new compromise people come up, if we don't do this, then, like Trump or like Elon Musk, I'm going to start cutting stuff.
Speaker 1:I'm going to start withholding funds. I'm going to start until the governor shows that he's willing to play chicken too, and he's willing to barrel down the road just like the other guys are. Until he shows he's willing to do that, I'm not sure we're going to get. I'm not sure we're going to get to a resolution. He tried that in 2019. He wasn't successful, but but things have gotten worse since then, and so the question is is he willing to try it again? Is he willing to stand up again?
Speaker 2:Well, and he's a lame, he's lame duck. So I don't understand why you wouldn't, at that point, grab the bull by the horns and say I'm going to be the one that saves the state and frame it that way I'm going to save the state and maybe he's got higher aspirations, you know. It would really show Alaskans that he's got the chutzpah to do the job, to take the reins of the state finances and to try and fix it. He could have spent the last three and a half years trying to fix it and instead he's just kind of absent, I mean just really absent, and then again coming in at the last minute and signing oh, we got to freeze. It makes no sense at all. I agree with Terry. I mean, if Dunleavy ran for another office, I absolutely would not vote for him. No, he'd be the last guy that I would vote for, just based on his track record here. I mean, that's the thing.
Speaker 2:Yes, I understand you took a licking over the 2019 budget you had. Yes, I understand you took a licking over the 2019 budget. I understand that. I understand that was painful and you felt like you were again kind of a whipped puppy. I understand. But now you've been elected, you've got four years. You're not coming back. Why not? Why not be the hero? Why not? Why put these pie in the sky things with carbon credits and all, and then unbalanced budgets where you draw big money from the CBR with no fiscal plan and then act like shocked, shocked. I tell you that, uh, that there's a crisis that, like you, haven't been reading your own reports that have been coming out for years. I just I don't understand it. That at all. I just do not understand the mindset at all.
Speaker 1:Yeah, it's a, it's a minimalist, it's it's it's do do nothing. I mean it's not, it's not do no harm, it's just do nothing. Um, the. You know, the rumor is that that he's setting out to run against Lisa. Uh, in whatever cycle that two years after his terms, over 20, 28, I guess, um, and he's setting up to run against Lisa and and he doesn't. He wants to, you know, be the Trump supported conservative candidate running against Lisa. He and he wants to act like you know, he, he didn't pass, he didn't endorse taxes. Um, he.
Speaker 2:Then act like Trump. Then act like Trump, go in there and cut, go in there with a chainsaw and get the Javier Malay thing. I mean, just go in there and do it. I mean that's the thing. If you sure you've already got the president's endorsement, you've already got his, you know his ear why not go in there and and buy into that full on and say we're doing it, we're creating a you know, a doge for Alaska.
Speaker 1:We're doing because I mean, I would guess, because his advisors would remind him, or his own mind reminds him of 2019, when he did that and he almost got himself impeached. And I would guess that he's saying, oh, I just want to steer this course that doesn't get me in trouble with anybody, and I want to get through my eight years and set myself up to be Trump-like and set myself up to run against Lisa. That's what everybody wants me to do. That's what Trump wants me to do. That's why I'm getting all this high profile from Trump. That's why I didn't get appointed to an office or a cabinet position. It's because everybody's trying to set me up to run against Lisa and I don't want to do anything that pisses anybody off. So I don't want to do all these, all these cuts on the other side.
Speaker 1:And if that's the attitude, if that's the attitude he's got, we don't get this result. Yeah, I mean the added. The attitude is give me a headline every once in a while that I'm talking about it. I least recognize it's out there by things like this, like the latest memo I issued, and I'll you know, I'll you know I'll be able to say later yes, I recognize and I tried and you know I did these things. But if the attitude is, I don't want to go back to what I tried to do in 2019, I don't want to. I don't want to play the game of chicken by running down the road and saying we're going to do it this way, then I'm not sure we ever get this resolved.
Speaker 2:Let's change gears for a quick second. We've got about two and a half minutes. I see that Hillcorp has just bought up another player in the Cook Inlet, which I mean they already have the majority. They almost own all of it, right? I mean they own the lion's share of everything. Is that dangerous in your mind? I mean to have one player that you have to negotiate with and they hold all the cards. At this point, I mean, does it get more tough?
Speaker 1:uh, in this regard, I was just thinking about it as I read the article this morning. What's your thoughts? Yeah, monopolies are tough. Uh, we shot we. We saw it last session when geisel tried to. Geisel and others tried to close the hillcorp loophole and hillcorp essentially threatened the cook inlet with with no development. If, uh, if the legislature uh went through it and the legislature backed down because hillcorp essentially threatened the Cook Inlet with no development. If the legislature went through it and the legislature backed down because Hillcorp's in a monopoly position, yeah, monopolies are bad, that's why we have laws against them.
Speaker 1:The current purchase of this minor interest down in the lower Kenai isn't a problem, it's a very small interest. Lower Kenai isn't a problem, it's a very small interest. The big issue currently is Hillcorp's proposed acquisition of the Kenai LNG plant, marathon's Kenai LNG plant, and if they have control not only of Cook Inlet production but also Cook Inlet imports, lng imports as they would, if they're successful in that purchase of the unqualified purchase of Kenai LNG plant, that's going to be a real problem. I mean, what we're setting up for is we are going to have some competition coming in in the form of LNG and that's not perfect competition, but at least it's some competition to keep Hillcorp from having a totally monopoly position. But Hillcorp's the one who's proposed to buy the Kenai LNG plant. There are ways to deal with that. I wrote a column about it a few weeks ago, the ways to deal with that. But that's the problem, not this little minor acquisition they're doing down in the lower Kenai. The problem is the proposed acquisition of the Kenai LNG plant.
Speaker 2:Well, it'll be interesting to watch. I guess we should get the popcorn out again. It's much more fun to watch when it's a movie and not when you're living it. That's the uh, that's the. That's the problem right now. Okay, uh, continuing now with brad keith lee alaskans for sustainable budgets we're all over the place this morning, but I gotta tell you, it's uh, I mean, I just I just I'm shaking my head, just wonder what's going to happen next. So, brad, a quick check, a gut check here on the Alaska economy and on the on the private economy specifically, and I know you're going to talk a little bit about that US News and World Report finding, which we talked about yesterday quite a bit, where Alaska is again in the back of the pack, 49th out of 50 on many different things. But the fiscal situation and the economy is a big chunk of that. Tell me, give me your check on the business climate here and the economy in Alaska.
Speaker 1:So this is sort of the culmination of the first two segments, right? The first segment is we're playing this game of chicken. Second segment is Dunleavy's not doing anything about it, or when he does, he doesn't back it up, he just sort of throws it out there and then walks away. And the third segment this segment is the consequence of that, and the consequence of that is that we're beginning to see this deterioration in business confidence and in the state's economic position. The headline that sort of brought me to this is in the ADN from earlier this week is in the ADN from earlier this week. The headline is Survey of Alaska's Small Businesses Shows Dramatic in quotes, dramatic Confidence Drop as Political Uncertainty Grew.
Speaker 1:Now most of this, most of the article, is about the tariffs and the potential impact of Trump's tariffs on Alaska in terms of creating higher cost from imports and reducing the demand for Alaska products like fish and other things. The mining reducing the demand for that as a result of the tariffs and the concern that is creating in the Alaska business community about this crunch between higher costs and lower sales. That's most of what the article talks about, but there is something else going on in addition to that. I think we would be seeing this sort of problem even if we hadn't had the tariffs, this sort of growing problem even if we hadn't had the tariffs. And part of that is picked up by the US News and World Report survey Alaska ranks I just picked the Peninsula Clarion headline. Alaska ranks 49th ahead of only Louisiana in US News and World Reports annual best states survey and the reason that I use the Peninsula is because they had the chart at the top of the article how Alaska ranks among states in US News and World Reports annual. And the part I went to quickly was fiscal stability Alaska ranked in 2018. It's got the various categories that US News World Report ranks and it's got Alaska's rank in it in those categories as it goes along. Fiscal stability here's the ranks In 2018, alaska ranked 47th. In 2019, alaska ranked 48th.
Speaker 1:In 2021, alaska ranked first. And the reason Alaska ranked first was the survey finally sort of caught up with the fact that we'd started diverting the PFD to fund government and that we were taking care of government spending. We were funding government spending in some way through PFD cuts. Us in Alaska knew we were funding it through PFD cuts but we were funding government spending, so it looked like Alaska, was very fiscally responsible. No taxes, no obvious taxes, nothing that we labeled a tax. Pfd cuts are taxes, but nothing that we labeled a tax and we were continuing to meet budget without talking about significant cuts in spending. So in 2021, alaska ranked first.
Speaker 1:2023, alaska is down to 33rd. 2024, alaska is back up to 21st. 2025, alaska is down at 44th and I think what we're seeing is a recognition that Alaska's fiscal stability is deteriorating quickly and we're seeing a recognition that that has consequences to the business community, certainly in terms of uncertainty, because the business community really doesn't know where we're going to go as a state. None of us know where we're going to go as a state with respect to this uncertainty. Are we going to continue to take money out of the private economy by pulling money out of middle and lower income Alaska families through PFD cuts? Are we going to have taxes? Are we going to have higher taxes on the oil industry? Are we going to finally tax non-residents? Just the uncertainty. Are we going to cut spending down to moderate spending, down to the level that we can afford it?
Speaker 1:Just the uncertainty that we have about that at the state level, I think is feeding into the confidence concern also that we're seeing showing up in the survey that the small business group did, the small business confidence survey that they did. So I think we're seeing sort of the culmination. The first thing we talked about today was this game of chicken coming at each other. The second thing was Dunleavy not trying to stop the game of chicken, not trying to find a third way, not stepping in and saying this is important to Alaska, we need to resolve it Just sort of flitting in and out, sort of depending upon how it affects his 2020, here we go again how it affects his 2028 election prospects against Lisa. Sort of flitting in and out about that. And the third thing, then, is we're seeing it show up in the business community in terms of lack of confidence and in terms of a drop in Alaska's rating among the states, because we don't have this resolved, we don't have our fiscal situation resolved.
Speaker 2:Right. Well, and this was a question for Mark Sabatini of the Juneau Empire and the Peninsula Clarion at the press conference last week to the Senate majority leadership you know, what do you think of Alaska being 49th, just ahead of Louisiana? And they had no, it was like the birds and, you know, like the deer in a headlight kind of moment, where they were like, oh well, you know, alaska's great It'd be. Just, they don't care about the private economy. That's the thing. They don't care. What care about the private economy? That's the thing. They don't care. What happens to the private economy, they don't care if we show up as 49th or 50th or 51st out of 50. They don't care, because as long as they've got their money in their programs, they're okay with it.
Speaker 1:That's what it comes down to well, and to some degree they they think they are the private economy. I mean, we, we've heard legislators say that, you know, alaska, it's important to have this spending or that spending because that's what drives the economy, that's what keeps the economy going. A lack of recognition that there is a private economy that needs to be addressed. And so they think they are the economy and they just need to. They think they need to keep pulling in more and more funds and spending more and more to address it. It's sort of the same thing, michael, as out-migration.
Speaker 1:Remember, out-migration was a big issue a couple of years ago. It was at the start of the session. Everybody was talking about out-migration and how they had great solutions to it. But the solutions were, you know, as we discovered when we did the analysis, it's the middle and lower income Alaska families that are out migrating and the solutions were to make to take steps to help bolster their economic position, bolster the economic position of middle and lower income Alaska families. And I think, as that dawned on the legislators, they said, well, there's nothing we can do about that. And so you haven't heard, you've heard people barely talk about out migration this session because that's a private economy thing. They think they don't have any effect on the private economy, so why talk about it? And it's sort of the same thing with respect to business confidence. They think the only solution to business confidence is for them to spend more. It's not. It's for them to take less out of the private economy and let the private economy have more resources for itself.
Speaker 2:I would dare to guess that probably 70 to 80 percent of the legislature believes that the economy can only be driven by government spending. That that's it, that there's just no. They have to be there, they have to be part of it, otherwise the economy just won't. And again to them, that is like you said, I think in their minds that is the economy. There is no public, private. It is the economy and it's all government. And that's a. That's a shame.
Speaker 1:Down to the last minute here, brad. Final thoughts Well, I think it's all part of the same thing. I think the fact that we're playing chicken with our fiscal policy, I think the fact that governor won't step in and back up people who are trying to get to a compromise on fiscal policy, and I think the lack of business confidence that's showing up is all part of the same thing. Showing up is all part of the same thing. We've gone on long enough with an uncertain fiscal policy that is now affecting the private sector of the economy in ways that are bad, and we're seeing it show up in these various reports.
Speaker 2:Something you said resonated here a little bit ago. I don't know if it was during the break or what, but when you basically said I don't know if it was during the break or what, but when you, you know, basically say I don't know if we, I don't know if we solve this, I don't know if I mean, do we have to hit that? I mean we were talking the other day do we just embrace it? Do we just embrace every bit of spending and just say go ahead, spend it all, put it all in there, do it all, and just accelerate the crash until it actually happens? Um, or Accelerate the crash until it actually happens, or you know, I don't know, I don't know what the solution is there. But you know we can't continue the way we are.
Speaker 2:And now, of course, kathy Giesel at the last meeting was pushing on the combining of the ERA and the corpus. I mean, that's the next big target, right is to get that big pot of money. So I mean, do we see some kind of fiscal crash? Or will they try and sell that? And Alaskans will be so desperate and there'll be so many people out there who are, you know, like the news, the daily news you know, had on there who are like oh, tax me harder daddy. I mean they just, you know, is that what they want? They'll be like oh sure me harder daddy. I mean they just you know, is that what they want? They'll be like oh sure, combine them, because we just don't want to just give us more government. Give us more, I mean, is that I don't understand.
Speaker 1:Well, I think the only thing that's going to resolve this game of chicken to the benefit of the Alaska economy, to the benefit of middle-income Alaska families, to the benefit of the private sector Alaska economy, I think the only thing that's going to resolve it is to find some sort of compromise, because the game of chicken right now, the game of chicken if you look at the Fairbanks News minor op-ed as an indicator the game of chicken is being won by those who are saying spend more, spend more, spend more, take it out of the pockets of middle and lower income Alaska families. Just keep on going down this road. And, geisel, take it out of the corpus, just keep on going down this road and that's who's winning this game. Just keep on going down this road and that's who's winning this game. So if the response to that is stop spending, stop spending, full PFD, cut spending, if that's the only response to it, we're seeing, I think that that loses the game of chicken.
Speaker 1:Fairbanks Newsminer gave up, the game of chicken. Fairbanks Newsminer gave up and I think we're seeing that the game of chicken is going to be won by those who just keep forcing more spending. I think the only way to resolve it is to find some compromise. And to go back to the thing that Chris discounts, the 2021 Fiscal Policy Working Group found principles of compromise and I think that we've got to find a way to enforce that, because I don't think the game of chicken is just going to end up in a big crash For the private economy, for private confidence in the economy.
Speaker 1:I think it's just going to end up in a big crash and I don't think it's a winnable position. So what I think we ought to be doing is concentrating on finding a compromise, and the governor ought to be stepping in and forcing hands at efforts, at that compromise. If we don't do it, I, I, I'm increasingly I mean, it's not just the news miners, just other things I pick up I'm increasingly pessimistic that we're going to resolve this situation in a way that's to the benefit of middle income Alaska families and to the private sector of Alaska economy.
Speaker 2:Hey, Donna Ardwin is in the chat room. Hello, donna, ben Carpenter was right about everything. Yeah, I mean he was. I mean we don't disagree. In fact, ben Carpenter is going to be on the show tomorrow to talk with us, give us a recap of his take on everything that's happening this year. He's going to be with us tomorrow morning. It's in the 6 o'clock hour. But you're right, he was right about everything.
Speaker 2:The fiscal policy working group was right about everything. That was a pretty contentious, cantankerous kind of group of people who didn't agree, but in the end they all unanimously. When you get Jesse Keel and a bunch of folks on a big government on the left agreeing with you know, ben Carpenter and Mike shower and andauer and Kevin McCabe and those on the right, when they come together and say, okay, it's not great, but this is what we've got, this is the best that we can come up with, this is the best compromise, and then everybody just ignores it. What do you expect, what? What are you? I guess you know. What do you? Is it going to get any better?
Speaker 2:I don't, I just I can't see how this is going to survive.
Speaker 1:Well, Ben didn't ignore it. I mean, Ben, Ben put those bills in. We had the ways and means committee. What, what again? You know what happened, though.
Speaker 1:When Ben looked around, there was nobody there. The governor wasn't there, you know, some of his fellow legislators weren't there. They, everybody sort of went off and started playing the game of chicken again, and so the effort to find a resolution of this in the middle someplace, recognizing that both sides have some justification in their positions, the effort to find some resolution just cratered and the game of chicken continued. And the game of chicken is increasingly being won by those who want to press for more spending and avoid the private economy. We need to recognize it's having an effect on business confidence. We need to recognize it's having an effect on things that are important to Alaska and then sort of back up and say, okay, we recognize that we need to get to a resolution, the governor needs to be involved in it and we need to stop playing the game of chicken and we need to come to some sort of third way, third way resolution.
Speaker 2:I I hope there's enough time for people to see this and I hope that there's not a bunch of people out there who are just like, oh, I'll just pay the tax.
Speaker 1:Or I'm just going to continue to fight to the end to cut spending to pay for the full PFD Spending is part of the overall plan. That's what it is. It is, but it's part. It's not. We can't do it through all through cut spend.
Speaker 2:So I agree with that at this point, because it's obviously not worked for the last 25 years. All right, Brad Keithley Alaskans for Sustainable Budgets. Thanks, Brad, I appreciate it.
Speaker 1:Michael Zois, thanks for having me. 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 Twitter. This has been Brad Keithley, managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week for the next edition of the Weekly Top Three.
