The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (10.20.2025)
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 October 20, 2025.
This week, our top 3 issues are these: 1) following up on recent comments by House Speaker Bryce Edgmon about the situation in western Alaska, we ask whether it could be the final straw that breaks the PFD (2:18); 2) we use a recent op-ed from House Minority Leader Mia Costello to demonstrate that it’s not just Ds that push spending without saying how they will pay for it (17:44); and 3) having read the second in his series on the Permanent Fund, we ask whether MustRead Alaska’s Jon Faulkner should just start over (37:07).
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 October 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 a.m. I join Michael weekly in the first hour of Tuesday show from 6.10 to 7 a.m. for a discussion between the two of us about our three issues. We post a 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, medium.com. 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 and Blue Sky. This week our top three issues are these. First, following up on recent comments by House Speaker Bryce Edgeman about the situation in Western Alaska, we ask whether that's the final straw that will break the PFD. Second, we use a recent op-ed from House Minority Leader Mia Costello to demonstrate that it's not just the Democrats that push spending without saying how they will pay for it. And third, having read the second in his series on the permanent fund, we ask whether Mustard Alaska's John Faulkner to just start over. And now let's join Michael.
SPEAKER_00:We're going to uh get into this here and get started this morning. Uh Brad, you got some uh you got some d delicious topics for today, uh to say the least. Let's get started with it and start talking uh talking about it. Um, where you start off by asking the question, is this the final straw that breaks the PFD? Uh and by this, I'm assuming you're talking about the uh typhoon and the incidents in Western Alaska.
SPEAKER_01:I am. Um I've read almost all the stories. I'm sure there's a couple I missed, but I've read almost all the stories uh about the the events in Western Alaska and the consequences uh uh in Western Alaska. Uh there's one place though that picked up some things that I'm not seeing any place else, and they're very important. Nat Hertz uh did a story uh uh in his Northern Dispatch Northern Journal uh entitled, We're in God's Hands Now. Um and it was a reporting from On the Scene. He happened to be in Western Alaska. He was reporting from On the Scene, talking to uh various uh uh uh survivors of the storm and talking to various uh people who came in to help uh with the storm. Um and he talked to Bryce Edgman. Um, and this is the part that I have not seen anyplace else, but he's quoting Bryce in this regard. He says, Edgeman, the House Speaker, told me he's been pondering some of the same questions uh about the consequences of the typhoon. While the impact of the storm was regional, quote, to quote Bryce, the scope of this is very much statewide. He said, citing Alaska's tight budget. The state, he argued, does not have enough money to pay a large dividend, large permanent fund dividend checks to residents while also meeting its obligations to match aid money from federal from the federal emergency management agency, typically 25% of the total cost. You think about the enormity of the expense involved in all this and what it could do to Alaska's fiscal future, Edgman said, it's going to be transformative in ways that we don't know yet. It's too early to take action, of course, he added, but he said it's not too early to start to think in those terms. And as I pondered and looked at numbers um uh about about what the potential cost of the of dealing with the typhoon in the aftermath uh are out in Western Alaska, he very well could be right. We're down to a point uh in the over the next decade if nothing, if no additional revenue sources are are developed, uh, and if spending continues to go even at the rate of inflation. Uh the numbers get more wild if it's not, if it's if it's higher than the rate of inflation. But if spending goes even at the rate of inflation over the next decade, we're gonna be down to about$500 billion for the PFD using the leftover uh PFD approach. That's about 13% of the POMB draw that's gonna be available for the for the uh the PFD under the current approach that we're taking. Right. It's not it's not hard to imagine that that that people are going to we when you start piling on and say, oh, we need uh uh climate resilience, we need a bunch of things to deal with the consequences of the storm, not only reconstructing the villages if we if we decide to do that, or or in whatever manner we decide to deal with the damage that's been done, but dealing with the consequences, the ongoing consequences. And some are already talking about establishing a climate resilience fund, the state establishing a climate resilience fund in the wake of both the storm and the federal government sort of wind down of FEMA. Uh, when you start putting the numbers together, you can quickly see, you can easily see that five if they focus it on the PFD, if they take it out of the PFD, you can easily see that$500 million that that toward the end of the decade is what we have left for the PFD. You can easily see that you know slipping away. So I think, I think, you know, the the the storm and the consequences of the storm and the potential that people will talk about for additional storms and needing to get ready for that and spend in in anticipation of that or establish the climate resilience fund and save in anticipation of in anticipation of those costs. I think it very well could be the straw that breaks if we don't develop alternative revenue sources, it very well could be the straw that breaks the camel's back uh on the PFD. PFD's sort of been sitting there uh uh hanging on by its fingernails. And if if we throw all these costs at it, particularly if if you know if FEMA doesn't, Governor Dunling has asked for the feds to cover 100% of the cost uh instead of just 75%. But particularly if the feds don't cover uh that 100%, if they leave 25% to the state and the FEMA support expires at some time, we don't get additional federal dollars to deal with it. You can I think you can see see that slip away. The irony of it is, and this is just this just infuriates me sometimes when I think about it. The irony of it is we are taking it off the backs. We'll be taking that money out of the hands of the very people we claim that we're that we're that we're saving, uh or that we're dealing with the bush. I mean, we'll be driving, we'll be driving one of the one of the things of using PFD cuts as opposed to more equitable, uh, more uh uh fairer uh revenue methods. One of the consequences is you drive people into poverty. I mean, you've got people who are who are near the poverty line, uh above the poverty line when they have when we have the full PFD. They're dropped below the poverty line when we when we cut the PFD. And so we're gonna be driving the very people that that we claim to be concerned about, that we claim to be focused on, we're gonna be driving a segment of that very population into poverty by in structuring the payments, uh in structuring the way that we that we that we provide revenue for those payments um uh out of the out of the PFD. And and in terms of statewide, it's gonna be middle and lower income Alaska families that are gonna pay, that are gonna bear the bulk of it. Top 20%, no. Non-residents, no. Oil companies uh paying up to their constitutional max max or constitutional mandate, no. It'll be middle and lower income Alaska families that will be bearing the the consequence of that. So I this this storm certainly has has huge and direct impacts on the people affected by it. But but you know, looking at Bryce's comment, he just sort of flipped it off. I mean, the looking at Bryce Bryce's comment, the consequences of this may be for the for the rest of the state and for Alaska's business situation may be huge.
SPEAKER_00:Well, and and again, the the biggest thing here is is that people don't realize that you know the cost of the PFD at this point was$660 million this last year, roughly, about$660 million for the lowest PFD we've ever received on a on a you know uh average on a tax adjusted or uh you know inflation adjusted basis. And so when you start talking about$500 million going away, I mean that is the end of it at that point. I mean, we're still talking about supplemental, we're still talking about all these other things. And the the the the biggest question is, like you said, it's infuriating to say, oh, we want to help you, but at the same time, it feels like you're helping me, but you're reaching around in my other pocket and pulling out all my money and saying, Oh, we're gonna help you on the other hand with what we've just taken out of your pocket. It's it's it's crazy.
SPEAKER_01:We're gonna help you by by throwing you into poverty, throwing a segment of you uh into poverty. That's just that's just when you think about when you think about the consequences in that fashion, it's just it's just top upside down. I mean, we're gonna help you, we're gonna help people by taking money out of your pocket, not not not the state as a whole, not the top 20%, not the oil companies, not the non-residents. We're gonna take money out of your pocket and recycle it and and tell you we're helping you. This is your we're we're helping you by by putting you into poverty. Feel good about it because we're helping you. We're going out.
SPEAKER_00:We won't be there. We will be there for you after we put you in poverty. Just just know that we'll be there for you.
SPEAKER_01:And it's and it's just, I mean, it's uh I it was a perfect opportunity, frankly, for Bryce to say, look, this this this situation has statewide consequences. We're gonna need to think about how we finance it. We're gonna be think we're gonna think about how we spread the burden across the state. We're gonna think we're gonna need to think about how we uh how we do this in an equitable, equitable way. Not mention taxes, not mention, you know, if you if he doesn't want to mention the T-word, not mention the T-word. Uh, but but at least talk about it in broader strokes, broader revenue sources. It's gonna impact the state as a whole. We're all gonna have to come together, we're all gonna have to contribute. No, I mean, he targets the PFD. He says, um the state, he argued, does not have enough money to pay a large permanent fund dividend checks to residents while also meeting the obligations to match aid money from that. He's targeting the PFD. And and so it's just, I mean Well, that's the thing.
SPEAKER_00:He doesn't even he doesn't even talk about any other option, you know, nothing about tightening government's belt, nothing about, you know, looking for new sources of revenue, nothing about anything else. He immediately goes for the throat and goes for the kill on the PFD. I think that's what you're you know, you're you're you're you're saying there.
SPEAKER_01:Yeah, yeah. It's it's like it's like, I mean, Bryce is fully in on this notion that the PFD is just a pot of money waiting there for the legislature to use. And boy, aren't you lucky we haven't used it yet? But we're just sort of sitting there waiting for a thing where we need to use it. And boy, you know, this is probably the thing where we're gonna need to use it. It's it's been a pot of money available that the state it's the state's entitled to, a pot of money that the state ought to take. Nothing. And the other irony of this is I think Bryce's district includes Hammond's home. And I think it's the district, the same district plus or minus that Hammond used to represent in the legislature when he was a state representative and a state state senator. So you have you have his successor or nearby successor, because he's certainly out in that area, nearby successor being the one that ultimately plunges the knife into the into the gut of the uh of the PFD and the concept that Hammond had that it's the people's share of the state's commonly owned wealth. Um, but uh it it just I mean the the the directness of the state, he argued, does not have enough money to pay large permanent fund dividend checks to residents, and then you know, to tie that directly to what the state's gonna have to be paying out to to deal with the the typhoon was just dark for me.
SPEAKER_00:Yeah, well, and I don't know if he's even doing it. Brian's saying because he can look like a hero. I don't even know if he's saying it because he wants to look I I think he just they just want access to the rest of that money. You know, this is the perfect opportunity, this is the perfect storm, you know, pardon the pun, to basically reach in there and swoop in there and take it. If just for this one time this go around, but see, once it's gone, then it's assumed that you'll never get, you know, then then they'll know that you won't squawk next time because we've already taken it. And we've said we had to take it for the thing, and next year it'll be like, oh, well, that's gone. We've already taken that, and now we're we're using it to spend it on more important things.
SPEAKER_01:Yeah, and it's gonna turn into I I've read too many, too many op-eds and commentaries now about the climate resilience fund. It's gonna it's gonna be we need to spend this right now on this particular storm, but look at the combination of the storm that hit up north and the storm now that's hit near Bethel, and we're gonna have more of these storms coming in. No doubt we are, we're gonna have more of these storms coming in, and we need to have a way of paying for them that doesn't interfere with the rest of our spending. And so we need this, we need a climate resilience fund. And I can easily see this transitioning from oh, we need all this right now, we're gonna need it to deal with the consequence of the storm. And then as that gradually wears off, oh, we're gonna need it to build up the climate resilience fund for the for the next time. So I um I I I think this could be, I mean, it shouldn't be. It shouldn't be. We ought to be talking about ways to pay for this that that everybody, truly everybody in the state chips in, including non-residents, uh, that everybody chips in to pay for it. We ought to be talking about that. But if we're if we're but he's not talking about that, and if we don't talk about that, you can truly see that this is the straw that uh finally breaks the PFD.
SPEAKER_00:Brian, he has a solution to this. He goes, just name the power cost equalization fund to the climate resilient fund, and you're done. There you go. That's the uh that's the answer that we're looking for. Um, but you're right. I mean, I think this is they've been looking for an excuse to be able to spend the PFD, because again, in people's mind, the first year that the PFD is gone will be the last year that they'll expect it. Uh right. I mean, because then the following year they'll be like, okay, well, we didn't get it this year. Some people will be like, well, we'll get it next year, but a lot of people will be like, once it's gone, it's gone. And so I think that they're actually looking for, um I think it's actually where, you know, I think that's what they're looking for. They're looking for an excuse to get it done.
SPEAKER_01:You know, it's almost, Michael, as if it's money that's burning a hole in their pocket, right? It's money, it's it's money that they think they're that they think the the state legislature is entitled to direct. It's not, it's not the the the the citizens of Alaska's share of the commonly held wealth. It's money that's the state led that's the state legislature's direct. And it's almost like, oh my gosh, we we haven't come up with a reason yet to spend it all, but but you know, it's like loose change in your pocket or like that last 20 that you've got, you know, in Canadian before you cross back over the border, or it's just it's it's you know, it's just burning a hole in your pocket. So we gotta we gotta get rid of it. And it's almost like you're looking for an excuse uh uh to uh to get rid of it. So that that seems, I mean, I'm reading a lot into these three paragraphs. I understand that. But but it's these three these three paragraphs with all of the talk about the climate's climate resilience fund and all of the talk about you know the state ought to take this on uh as a as a big priority, uh putting that all in nobody, nobody, none of those. Talking about revenue sources other than uh other than the existing revenue source. So all that together just uh uh seems to seems to be an arrow that's pointed toward this particular uh structure. Right. Right.
SPEAKER_00:Welcome back to the program. We're continuing the Brad Keithly, Alaskans for sustainable budgets and the weekly top three. Number two of the weekly top three, um, is that uh it's not just the Democrats that propose spending without saying that they're going, you know, that they're gonna how they're gonna pay for it. They're you know, there's no who pays, right? That's been our big question, Brad, uh, on a lot of this. But it's not just the Democrats who were just like, let's spend it. I mean, it's like it's everybody.
SPEAKER_01:Yeah, uh, so there's an editorial, an op-ed by Mia Costello, who I who I generally like, but sometimes I get irritated with. And this was one of those times. The op-ed is the Alaska Gas Line Project is trans is a transformative opportunity, which we must seize. And this uh it's an op-ed that focuses on the recent formation of the Alaska Gas Line caucus uh in the uh in the legislature, uh, particularly among the minority members in the House uh in the legislature, and their focus on things the state must do, state must do uh to get ready for the opportunity of the uh of the gas line. This particular one, this particular op-ed focuses uh on workforce development and on the state uh developing more workforce develop uh workforce education uh programs to prepare the workforce for working uh on the pipeline. Uh not a bad, not a bad use of state funds uh uh if if we have a whole bunch of surplus funds, but we don't. Um and so it's like it's like all those K-12 up K through 12 funding op-eds or K through 12 spending op-eds that I complain about from time to time, which is somebody writes this op-ed and says, oh, we got to spend here, we got to spend here. It's important Alaska's future. We gotta, we gotta make these, gotta make these decisions, we've got to have this additional spending, but without mentioning where the heck the revenue is gonna come from. Who who's gonna pay for it? Right. This one is Mia saying, oh, we got to develop these additional, these additional uh uh educational opportunities, we've got to develop these additional programs, but nothing in here about how you're gonna pay for it. Nothing in here about about how we're gonna develop the revenues to pay for it. The thing that the thing that sort of really irritates me about this is the if the LK AKLNG line comes through, it won't, but if the AKLNG line comes through, we're we're gonna have a bunch of outside, no matter how much we educate Alaskans, no matter, no matter how many workforce educational opportunities we provide, we're gonna have a bunch of non-residents come in here and take advantage of it uh during the construction. But we don't tax them at all while we're here. So we're gonna have in state, we're gonna have Alaskans, only Alaskans, paying for these programs uh through PFD cuts, if we've got a PFD left uh by then, or maybe through sales taxes, which is the most regressive form of tax. We're gonna have Alaskans largely paying for these programs uh uh or largely paying for the costs, and we're gonna have all these non-residents in here who are gonna get away tax-free or scot-free, as uh as Governor Hammond used to say. This is the perfect opportunity to say, look, we're gonna have, we're gonna, we've got this big gas line project coming up. We've got, we need to educate Alaskans to be able to work for it, uh, work on it. We need to have workforce development and get them the skills that they need to be able to work on this pipeline and other things that uh that come along if this pipeline goes through. But we also need to think about how we're gonna pay for it. And we need to include, we need to find a revenue base that includes non-residents who will also benefit from from this project and benefit from other projects. We need to include a rev, we need to develop a revenue base that will also have non-residents and all Alaskans, including the top 20%, contributing uh toward uh toward the cost of it. There's nothing, nothing in this op-ed, just like in the K through 12 op-eds that I complain about a lot. There's nothing in this op-ed that even remotely talks about the revenue side and who's going to pay for it. It just leaves it, leaves it by implication to how we're currently doing it, which is Alaskans only paying for paying for these costs by focusing it, uh, by paying for it uh through the PFD. It's not just me. I mean, as I went through the, went through the papers this week, up in uh up in Fairbanks, uh the uh uh the Fairbanks Fairbanks North Star Assembly sets, there's an article by Jack Barnwell in the Fairbanks uh Daily uh News Miner. Assembly sets initial legislative capital priorities for 2026. Um and then there's an op-ed by the uh uh Fairbanks uh Daily Newsminer Editorial Board, enrollment, the headline of which is enrollment in the FNSB school district is down. Now what? And the now what, as you go through the op-ed, is we need to spend more to make uh to make the Fairbanks, the declining enrollment to make the school that's losing people more attractive. We need to spend more to make it more attractive, make it more costly, to to drag uh drag people back in that are running running away from it. I mean, you can go through, you can pick up any paper in the state virtually uh and go through it and find these op-eds about, oh God, we need to spend on this, we need to spend on that, we need to spend on on the other thing, we need to spend down this, we need to be far-sighted, and we need to be, you know, getting our workforce rate ready in the case of Mia. But nothing in any of those, Republican or Democrat, local, state, nothing in any of those about how they're gonna pay for it. No contributions on their side about how they're gonna pay for it. If I were, if I were the legislative delegations from these regions, uh, I would say, okay, here's your list of priorities. Now, give me your list of how you're gonna pay for them. Give me your list of revenue measures that that that you propose to pay for the to to pay for these things. And tell me, tell me how much I'm gonna need to raise uh in each of the or how much you propose I raise in each of these revenue measures to pay for it. Tell you what would happen if you had to, if if you did that. You said, and and and you would say also you can't include the PFD. Uh you can't include PFD cuts. I tell you what, the the list of the things they want would go down dramatically, would go down quickly. Oh my gosh, you want us to pay for it? We have to we have to come up with ways to pay for this, it'd go down dramatically. So we're getting all these shots from Republicans from Mia Costello. Yeah, we're getting all these shots about I want to spend more, and it's a great thing I want to spend more, and I want to spend more on really good things.
SPEAKER_00:But but this time, Brad, but this time, this project is important. That's the only time I would never advocate, but for this time, this one project is important. I mean, this is again the problem because every time it's some important project, right? Yeah, that's it. Every time it's some important project. Of course.
SPEAKER_01:Well, if it's important, then pay for it. If it's important to the state as a whole, I mean, so Mia's op-ed and the other op-eds go on about how important this is to the state as a whole, how it important, how important it is to the state's people. Well, if it's important to the state's people, have them pay for it in a way that is that is uh revenue equal or revenue revenue neutral. Have them pay for it in a way that is that is uh appropriate to the statewide benefit. Have non-residents contribute to it. You know, the cost of Alaska government that we're paying for through PFD cuts, the the burden borne by Alaskans of the PFD cuts would be 10 to 15 percent less if we had non-residents contributing. Our PFDs could be 10 to 15 percent higher if we had non-residents at least 10 to 15 percent higher, if we had non-residents contributing to the revenue base. But we don't. We force Alaskans through by using PFD cuts, we force Alaskans to pay for all of it. And and that's just, I mean, talk about talk about suicide economics. I mean, you're just you're just collapsing the cost on a on a on a on on a very small portion of the total of the work, well, on a portion of the of the total uh population in the state, the total workforce in the state, you're collapsing all this cost just on Alaskans, and then we have out migration. So the number of Alaskans is going down. If you look at the number of PFDs, they are going down, and so the costs are increasing, being focused on a smaller and smaller population. We we need to we need to end this. And these op-eds are perfect opportunities to talk about that issue. You know, perfect opportunity for the Fairbanks North Star Borough Assembly to say, okay, how are you gonna pay for it? To talk about including non-residents, to talk about including other revenue sources uh in meeting in meeting your demands. But we don't. We let them get away with, we let op-eds get away with just being one-sided spending. We let the Fairbanks North Star Borough get away with being one-sided, we let the editorial page of the Fairbanks News Miner get away with one with being one-sided, just talking about what they want to spend it on and what we need to spend it on as opposed to how we pay for it.
SPEAKER_00:Yeah, no, I mean, look, I mean, this article specifically was targeted at workforce and labor development, which is all well and good, but you're you're focusing on the beginning where she's basically saying we need to fund the gas line because now's our opportunity and it's it's a once-in-a-lifetime opportunity, yada yada. But again, no commentary on how anything gets paid for. And and again, uh touting all the great things that Glenn Farn brought up, but there's still no pricing. We still do not have a new price tag for this gas line. The last tag we have is 10 years old at 44 billion dollars, right? I mean, that's 10 years ago, pre-COVID, pre-tariffs, pre-steel changes, and and Japan buying USD. I mean, pre all that stuff. And we still don't have a number. How how are people how are people still like oh yeah? I mean, just like they're they're they're drinking the Kool-Aid on this. We've got to know what the numbers are.
SPEAKER_01:Right. And we're and and and articles like this and the and the caucus and all that, and the caucus meeting. I followed the caucus meeting where they had everybody come up, or they had Glenn Farn and others come up and testify about the status and how great things were and how it was looking good. All of those are are are they're trying to get our toe in the water and say, oh yeah, okay, this is gonna work. You know, we want to be supportive of it. Uh, we this is a great thing. And then gradually they're gonna start rolling out, you know, how much Alaska's got to contribute to to get all this benefit. This is sort of the first shot of that. Well, Alaskans need to pay for all the workforce development for Alaska's. You don't need a broader revenue base for that.
SPEAKER_00:Well, that's why there's no price tag, because they want to slow roll it on us and try and slowly, slowly turn the temperature up in the pot until you realize that it's on a full rolling boil and you're in the middle of it. That's what they want to do. There is no there is no economic way to be able to pay for this gas line uh if they don't have outside investment. And what it's telling me right now, because they're refusing to put those price tags out, the investment's too damn high. And they don't they can't get any investors on it. That's what it sounds like to me.
SPEAKER_01:Yeah, you know, if they were confident, if they were confident this was going to work, uh they would they would have those numbers out there, they would have the cost numbers out there, or at least some some ballpark figure on the cost numbers so people could sort of be absorbing that. But it's it's all it's all cheerleading, right? I mean the governor's gotten involved in it too. There it's all cheerleading about this project, it's all cheerleading about how important it is. How essential it is, how great things it's gonna do without any economics related to it. And then after everybody gets whipped into this froth of, oh yeah, yeah, gotta have a gas light, gotta have a gas line, and then boom, you gotta pay this, this, this, this, this, you got to give up on property taxes, you gotta make these concessions. Oh, but but you know, we're all excited about this. So, okay, okay, okay. We'll do all that. And it's just, I mean, you can see you can see how they're trying to play this. Mia's article is a piece of that. Mia's op-ed is a piece of that trying to whip up, oh, yes, we need these workforce development because there's gonna be all these jobs. The state needs to get ahead of it, needs to be educating people now. Uh, and and it's all gonna be great. We're gonna get these programs out there. How are you gonna pay for it? Yeah. And and, you know, there's just radio silence.
SPEAKER_00:Well, that's the thing. There's such a fervor going on, and everybody is all frothing at the mouth, and they're all ready. But the problem is that it's gonna be more of the same because we can't get the economic part of it right, and just because it can't be it can't be done. And it'll be, you know, my fear is that three years from now we'll be looking back going, wow, how did we get all stirred up about this gas line when we really didn't have any underpinnings for this whole argument? It's just um, it's it's crazy, it's absolutely crazy. I want to loop back because I don't subscribe to the Fairbanks Daily News miner because it just irritates me so bad. Did you say that they literally have an article saying that they have a drop in school enrollment and their answer is to spend more to attract those people back? Is that what you is that is that what you're saying?
SPEAKER_01:Enrollment in the FNSB school district is down. Now what? And and let's see if I can piece down to where they have a list of solutions. Looking inward, make public schools more appealing, expand specialized programs, improve student engagement and outcomes by investing in modern relevant curriculum, recruit and retain high-quality educators, competitive pay, professional development, supportive environments, enhance communication with the I mean it just goes on.
SPEAKER_00:This is that's all the stuff that they that's all the stuff that they said that they've been doing. We're getting the cutting-edge curriculums and we're we're doing the best to get the retained teachers, and we're doing the best for training. Barbara Haney said, surprise you didn't pick up on the request by the Fairbanks North Star Borough School District to build a new middle school. They got a declining enrollment and they want to build a new middle school on top of that. I mean, this this is just nuttiness at this point.
SPEAKER_01:Well, I mean, it it but it's it's Fairbanks North Star because I happen to be looking at the at the at the news miner when I was when I was preparing for the show. But I could go to Anchorage and see the same thing. I could go to I probably could go to Kenai um and um and see the same thing. These list of priorities, these lists of of proposals on how to deal with school issues or how to deal with you know uh uh any sort of other uh issues is just spend more, spend more in this in this way. And and maybe sometimes you'll see, oh, maybe we ought to cut someplace, but without specifics on where to cut, uh maybe we just ought to cut someplace theoretically, uh, but nothing on how you pay for it, uh on how you positively come up with additional revenue uh to pay for it. And and it's usually it's usually we want the state to pay more, right? I mean the the Fairmarks uh North Star Borough uh Assembly sets initial legislative capital priorities for 2026. Well, those were all they want the state to pay for it. Um so it's I mean it's it it's I get it. I mean, when you think you have an open-ended pot of money, you you you just list a bunch of things. Oh, I I prioritize. This is the most important thing, but you don't think through, you know, the the the pluses and minuses of how you're gonna pay for it. You just list things. And and maybe you cut the list off a little bit early one year to say, I'm being conservative. I didn't list the top 15 things, I only listed the top 10. Uh, but none of this has how you're gonna pay, how you want the state to how you how you envision the state to pay for it. They just get to send in their their request form, they get to send in their give us this list, uh, but but without stepping up to the bar and saying, and we think you ought to pay for it this way. No, not even not even not even being upfront about it and saying we ought to you ought to pay for it through P additional PFD cuts. No, can't even say that. It's just we ought to think you, we we need you need us to give us more money uh for these things.
SPEAKER_00:I mean, I just you know, doomed. We're doomed, Brad. These people cannot see the forest through the trees. They cannot just, you know, there is we are rapidly reaching that point where I've I've been saying it the last few weeks, but we're rapidly reaching that point where there is no more road to kick the can down. Like what, what, what, what are you not paying attention? We're about to reach the end of the road because there is no more money. And what's gonna happen then? Are are the politicians just gonna, I mean, the ones that are in, they're just gonna retire and bail out and head out of state and say, see ya, leave you holding the bag. I keep saying it's a game of musical chairs, and there's one freaking chair in the middle of the room, and that's it. And I guarantee you, Alaskans aren't gonna get their seats in that butt or butts in that seat. It's gonna be the politician gonna be the last one standing when it's all said and done.
SPEAKER_01:Did you say that Andy Josephson's retiring? I did.
SPEAKER_00:I saw that, yeah.
SPEAKER_01:I saw that. I mean, if if if he's get if he's getting out of town, I it's uh that's an indicator of something. Uh not I'm not quite sure what, but he was co-chair of finance. Uh is co-chair of finance. We'll be through the through this coming year, but not running for re-election. Maybe, maybe reality in the role of co-chair finally caught up with it, but he's saying, Oh shit, I don't want to be here here for what's coming next.
SPEAKER_00:Yeah, well, I mean, and maybe that's it. Maybe this is the perfect opportunity to bail out and be like, let me pull the ripcord on this before things get really gnarly, uh, because that's that's what we're looking at. Um, and uh yeah, rats fleeing a ship, says Brian. That's exactly it. I mean, you get Stevens is gonna bail out, Josephson's gonna bail out a bunch of these people who were big spenders all over the place. They're just gonna pull the ripcord and they'll be like, see you, Charlie, as they go out the as they go out the back door. Uh, and you're the ones that's going down with the plane.
SPEAKER_01:Uh as it's uh but but just to go back to the beginning of this, it's the Republicans that are adding to it. Oh Mia's op-ed of spend more, but don't talk about where the revenues are going to come from. It's just adding to this situation.
SPEAKER_00:Welcome back to the uh program, Brad Keithley, Alaskan's four sustainable budgets, the weekly top three. Woo! We were into a hot and heavy there in the break, coming back into it. So frustrating to watch all this stuff going on. And we were just talking about rats fleeing the sinking ship, uh, which I think is a good analogy for what we've been talking about here uh for what's happening in the state. And we can get into that uh a little bit later. But let's get on to number three, which was uh our discussion uh on the permanent fund and more the corporation and everything. John Faulkner may need to start over, is what Brad said. We started last week with his part one, and now we're working on to the great debate of the permanent fund, part two. Brad, what do you what do you say here?
SPEAKER_01:So last week, John, last week we talked about John's first piece on the permanent fund that was on inflation proofing. And John essentially was making arguments that both a feed in and support those who want to collapse the two account fund, which actually protects the corpus, into a single account, which would create a backdoor into the corpus and allow the legislatures to start draining down the corpus when the permanent fund corporation is not earning enough to cover the uh to cover the withdrawals. And John's argument last week was in was directly in support of that, uh, by saying we need to cover inflation proofing with cash, uh, which we don't, uh taking out of the earnings reserve, which also feeds into the argument of having to cut the PFD because there's not enough cash in the PFD to uh both cover the inflation proofing in cash and and uh and the PFD. This week he goes on and he talks uh about the about following the money. The the title of this is follow the money. And he lays out just sort of where what how the permanent fund works, but he leaves out a huge, a huge component of it. Um as he's talking about the earnings reserve account and the and calls it the legislature's main piggyback and goes through what the earnings reserve account, he says this the legislature can appropriate earnings reserve account funds for any lawful purpose, provided withdrawals stay within the percent of market value cap, a formula designed to limit spending. Within that limit, however, the legislature exercises broad discretion. That is why the ERA is described by many as the primary revenue source for our state budget. Well, that's not the way the statute works, John. The way the statute works is the way the the existing statute works has worked since the early 1980s and continues to work today, not been amended. The way the statute works is the POMV draw is the POMV draw is calculated. Then from that, and this is in descending order in the statute, from that, you're supposed to set aside the permanent fund dividend at the at the statutory level, and then the remainder after withdraw after deducting the stat the permanent fund the statute the statutory permanent fund dividend, the remainder is what's available to the state. And it's not much. It's not in the in the big scheme of spending, it's not that much. And so if you withdrew the permanent fund dividend, according to statutory, uh, according to the statutory uh uh uh uh method, if you withdrew the permanent fund dividend as the statute provides, that would be a constraint on spending because the amount remaining would be limited, uh, the amount remaining that the legislature would have would be would be limited. Uh, and we begin to see some constraints on spending because you'd have to talk about raising revenues other ways. And when you start talking about raising revenues other ways in the form of a tax or some other some other mechanism, people start pushing back on spending. By allowing the by allowing them to use the permanent fund dividend, you're only affecting, really only affecting middle and lower income Alaska families, and they don't have a big, a big political voice. That's a huge step in this in the way the statute works, the way the statute's supposed to work. And John just completely misses it, just completely ignores it. The legislature can't appropriate, what he says is the legislature can appropriate ERA funds for any lawful purpose, provided withdrawals stay within the percent of market value cap, a formula designed to limit spending. Within that limit, however, the legislature exercises broad discretion. It doesn't. I mean, that's the way the statute works, um, it doesn't. And it it also irritates me when people talk about the POMB, the statutory limit of the POMB, and say, well, that's not that's a statutory limit. We've got to observe that statutory limit. We've got to, we've got to respect that because it's in statute. The PFD is in statute. Indeed, it's the same statute. And and and we don't respect that. I mean, we just ignore that and keep and and keep on going. So why does anybody think that we're gonna that that when push comes to show, we're gonna respect the the POMB uh uh statute? Or conversely, if you want to argue that we need to respect the POMV statute because that's a hard limit in statute, then we ought to respect the the PFD calculation because that's uh also a hard calculation um in statute. I think John, I'm not sure what John's trying to do with this series uh on the on the on the permanent fund, uh, but but so far the first two are the first two uh pieces of it have have not really been very conservative or not been very uh uh uh uh straightforward in terms of how the permanent fund uh works or what the real protections in the case of the earnings reserve, what the real protections are from requiring the the uh two account system.
SPEAKER_00:Yeah, no, um again, I was I'm I'm trying to figure out what what he's tracking to um with this. And again, the fact that he's kind of got the the ERA component of it, but you know, backwards as far as the what the POMV does and how much money it draws in there. And again, the fact that we're ignoring the statute, that's the thing that just, you know, I mean, but but but but the POMV is so important and so sacred. Again, it's a statute, it's not a constitutional mandate, it's a statute, and they can change anything that they want, just like they're ignoring the current statutory formula, they could ignore the POMV draw at any time. That that's they could, you know, if they wanted to, they don't have to, they could do it whatever they want out of the ERA.
SPEAKER_01:And if you think the POMV draw, if you think the POMV statute is important and we ought to respect it and we ought to uphold it, and we ought not to do anything to undercut it, then we ought not to be undercutting the PFD statute because that it's in the same, it's in the same damn statute. It's in the same, it's it's got the same status, legal status, as the as the POMV CAP. It's got the same impact on calculations as the POMV CAP. We ought to we ought to be respecting the PFD statute. And if you don't like it, change it. Have the cuts to change it. But but just ignoring it undercuts the rule of law, undercuts respect for law, and and is undercutting the hell out of uh out of the POMV statute at the same time.
SPEAKER_00:Brad Keithley, Alaskans for sustainable budgets, the weekly top three. We're down to the last uh two minutes here uh for the program today. So, Brad, you want to summate with all your thoughts uh on all this? I mean, we've talked about, you know, uh is the PFD, is this the the bullet, the magic bullet that goes into it? How do we pay for all of it? And of course, can we get all the details right? That's uh kind of the big thing here. So hit us with it.
SPEAKER_01:We don't have responsible fiscal policy in the state. We don't have legislators who talk responsibly, responsibly about fiscal policy on both the R side and the D side. We don't have people who, when they write articles about the permanent fund or other things, who don't think responsibly about the uh about the uh the fiscal policy in the state. We have Bryce, going back to the first segment, we have uh Speaker Edgman, who is you know just saying, as a matter of fact, that it looks like we're gonna have to cut the PFD more, as opposed and take money out of the pockets of the very people we're trying to help, take money out of middle and lower income Alaska families, take money out of Bush families, take dollars out of Bush families, throw some Bush families into poverty, which is what cutting the PFD does, throw some uh Bush families into poverty in order to help. Uh when you've got a broad array of other revenue sources, uh uh the top 20% contributing an equitable share, oil companies getting old tax rates back up to the constitutional mandate, uh non-residents, when you've got a broad array of other revenue sources that could help contribute to it and reduce the impact on middle and lower income Alaska families and reduce the impact on the very people you're trying to help, the people from the Western community, uh Western Alaska communities that have been that have been impacted. We don't have people who talk responsibly about fiscal policy. They just they just come in and say, I want to spend, or I I I, you know, just over look, just look past the PFD statute and let me have all that revenue. We've got to have people, we've got to have candidates, we've got to have legislators that think and talk responsibly about fiscal policy in the years ahead because it's going to become even more important.
SPEAKER_00:I mean, yeah, I mean, at this point, fiscal policy, what is that? I mean, this is this is a year-to-year thing, Brad. I mean, they're like they're like running from one house of fire to the next. There's no planning ahead. That's like, what is this year's crisis? And can we go, can we go through it and uh and keep going? You know, that's the that's the that's the issue. There is no planning ahead. And of course, that also means that they have no, you know, they have no qualms taking whatever money's on the table, and and they just want to keep taking it at this point. Final thoughts here for you.
SPEAKER_01:Well, yeah, it's that it is that, Michael. I mean, they're just sitting year to year. That's exactly right. And it's the it's the crisis of the moment, and and they've just let the PFD sit there as a pot. And John's column just sort of reinforces that. You just let this PFD sit there as a pot, and and you know, I'll go dip in that for this because this is important. I'll go dip in it for this, but this is important, I'll go dip in it for this because uh because this is important. Instead of treating it as a structured piece of of the overall state fiscal policy, they've just opened the door to it um and started dipping into it. These are the same people who say, who say, we really want to, we do we we should combine the two accounts, the two permanent fund accounts into one, uh and trust us, you know, we won't we won't dip into that because we'll be you know governed by these strict rules. At the same time that in those strict rules are opening up a back door, they're creating a back door to be able to get into uh to be able to get into the corpus. So yeah, I'd if we can't trust them in how they've treated the PFD, if we can't trust them in how they've treated a statute, I don't think we ought to be trusting them with respect to anything else, uh, where they tell us uh where the where the response is, trust us, we won't do that.
SPEAKER_00:Yeah, no, I mean uh again, and like I said, they they they have no plan beyond this next year. I mean, even I mean, it still boils my my oats that uh that Bryce that not that not Steadman, sorry, with Stedman. Um, it really just chaps me that he's you know, we were talking about how bad next year is going to be. And then he says, but we don't want to focus on that. We want to focus on right now. Well, should you not have a long-term? We're talking about a crisis moment that is coming that should inform all of our decisions leading up to it. So anything we're doing now will have an effect, either positive or negative, on the future. And your answer is pay no attention to the man behind the curtain. Look at what my look over here. This is what I'm doing over here. I mean, literally at a press conference, he said that. And I'm like, what is going on?
SPEAKER_01:Well, and and and who you would who you would want to be leading the discussion on that would be the governor. The governor's checked out. I mean, it's all it all of his actions are are focused on how he's going to run against Lisa in two years, if it, if indeed Lisa runs in two years. I mean, it's just it's it's we don't have anybody. We don't have anybody who's focused on fiscal policy. And you look at the at the 11 candidates or 12 or 13 or 25 or whatever, however many candidates we got for governor now, and none of those are focused on on uh on fiscal policy. They're not they're not focused on the whole. You know, you've got Bernadette talking about the PFD, you got Begage talking about, you know, we need to we need to invest more in this and that and the other thing in education and in renewables and in various various other uh areas, you've got Dolstrom talking about whatever the hell she's talking about. I mean, you you've got candidates talking about bits and pieces, but we don't have a candidate who's talking about fiscal policy as a whole and getting this state back on track on some sort of defined, uh uh dedicated track. And that's a problem. So, you know, if there's anybody out there thinking about running for governor, this is your opening. You could, you could, you could, you'll have the field uh in terms of talking about a comprehensive fiscal policy.
SPEAKER_00:Well, and and that that's the problem. If they get up there and they talk about the comprehensive fiscal policy, they are going to be at odds with every other politician out there who says, I'm gonna give you your full PFD. I mean, Will Stapp was on the other day, and I don't know if you saw the show, but he was a hundred percent right on when he's like, I'm so sick of politicians saying, We're gonna give you the full PFD, and I say, Okay, how do we pay for it? And there's no answers, there's crickets. I mean, if you get up there with a true fiscal plan, you're gonna have some hard truths, right? You're gonna have some hard truths like there's gonna have to be some cuts, there's gonna have to be some new revenues, there's gonna have to be some changes, it's not gonna be comfortable. That's gonna be the message to the Alaskan people, and that's not gonna be a popular message. You know what will be a popular message? Oh, don't worry, we'll give you a gas line, and don't worry, we'll give you your full PFD. And don't worry, we'll give you a pony on top of it all, and that's gonna be the problem.
SPEAKER_01:Or in the case of Beggage, I mean, we're gonna give you education, we're gonna increase K through 12 space. Right, right. How are you gonna pay for it? How are you gonna pay for it, Tom?
SPEAKER_00:Yeah, I don't know.
SPEAKER_01:I'm I'm gonna we just they're not they're not even honest, they're not those people aren't even honest in saying, I'm gonna take away your PFD. Because that's the only way I've got to pay for it. Yeah, they but they don't want they don't want to say that, so it's just I'm gonna give you, or in the case of Mia with her op-end, I'm gonna give you without saying how they're gonna pay for it, without without doing the right hand of the ledger at the same time you're doing the left hand.
SPEAKER_00:Oh, I'm so glad we have these little conversations, Brad. I'm just so glad I can eliminate all the salt from my diet for the rest of the week at this point. All right. Uh thanks, Brad. I hope you enjoy your final days there in Cape Brenton. And I don't mean final in the way. I hope you enjoy your final days. I hope you enjoy your last few days there in Cape Breton. Uh enjoy yourself. Appreciate you come on board. And um, and and thanks for thanks for sharing with us. I mean, again, this is it's brutal, man. I don't know, I don't know what to do. We just got to keep pumping the pump, I guess. That's all we can do.
SPEAKER_01:Yep, exactly right, Michael. That's that's that's our role to uh keep identifying where the goal should be.
SPEAKER_00:Yeah, town criers, that's what we are. Town criers with less hair. All right, we will see you. We will see you next time, Brad. Thanks so much, appreciate it.
SPEAKER_01:As always, thanks for having me, Michael. 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 Keith Lake, Managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week on the weekly top three.
