The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (11.17.2025)
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 November 17, 2025.
This week, our top 3 issues are these: 1) we discuss why revenues — where the money is supposed to come from — should be an equal part of the discussion of the Legislature’s Task Force on Education Funding (2:15); 2) we explain why the Alaska fiscal policy debate sounds a lot like two kids fighting: it’s your fault, no, it’s your fault (19:24); and 3) we explain why the pre-session “priorities” discussions between local bodies and their legislators should be a two-way conversation, which includes a segment on “who pays” (37:51).
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 Keithly, 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 November 17th, 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 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, 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. This week, our top three issues are these. First, we discuss why revenues, where the money is supposed to come from, should be an equal part of the discussion of the legislature's task force on education funding. Second, we explain why the Alaska fiscal policy debate sounds a lot like two kids fighting. It's your fault? No, it's your fault. No, it's your fault. And third, we explain why the pre-session priorities discussions between local bodies and their legislators should be a two-way conversation, which includes a segment on who pays. And now, let's join Michael.
SPEAKER_00:This week we start off with a discussion on the education task force. What is the needed discussion? Now, I will full caveat before we get started. I feel like the I feel like the education task force is nothing more than political cover. They've already decided what the outcome is that they want. Now they're just looking to get political cover to justify it. But Brad, tell me what you think this should, the dis big discussion should be.
SPEAKER_01:Well, the education task force had another meeting last week, and it was, as you're, as you're describing it, mostly political cover for why they need to increase uh uh uh K-12 spending uh and where and and various justifications, you know, witness after witness after witness about various justifications for why they need to increase it. But there was one slide in the midst of this entire presentation. There was one slide that slipped in um that that talked about the revenue side. If they're gonna increase spending, or even if they're gonna maintain the spending they've already increased to last session, where the heck are the revenues gonna come from? And that's not been that's been the exception rather than the rule in terms of in terms of discussions by the task force so far. But in Matt Berman's presentation from ICER, there was one slide that slipped in that uh essentially talked about the revenue side. And I found it interesting, and I think it's a I think it's a focal point that that needs to be the focal point of and an equal focal point. Revenues need to be where the revenue is going to come from, needs to be an equal focal point with you know where what do we need to be spending and where do we need to be spending it. Um and this one slide I just found I found interesting. It is it is sort of a follow-up to a discussion we had on a previous show a few weeks ago, um, but it sort of encapsulates it uh in one uh in one slide. Matt was going through what what this slide is part of. Matt was going through a presentation on how Alaska compares to the the rest of the states, um, to the United States generally, in terms of mostly in terms of spending level, mostly in terms of uh spending level per student and and all sorts of uh criteria. But this one slide gets in there um uh talking about uh the revenue side. And it is it it sort of encapsulates the problem we have. Alaska, the headline of it is Alaska relies more on state revenue sources and less on local funding than schools uh nationwide. And it compares, it uses the latest census data that we've got, uh, Census Bureau data on school uh school funding, both the revenue side and the spending side, uses the latest uh census data that we got to break down um uh uh revenue levels into three categories federal, state, and local. Um and it shows Alaska on the left-hand side what the revenue sources are for Alaska on the on the left-hand side. And it shows what the U.S. average is uh on the uh on the right hand side. And the numbers are are starkly different. On the Alaska side, uh 22% of Alaska revenues in the latest census numbers, the 2023 census numbers, 22% of Alaska's revenues for schools comes from the federal, uh comes from federal sources. On the U.S. average side, only 13% comes from uh federal sources. So that's one difference. The big difference, though, that I want to talk about is that is the the the relationship between local funding and state funding. On the Alaska side, uh 55% of all school funding comes from the state. On the federal, on the on the U.S. average side, only 45%, 10% less than Alaska uh comes from the state. Uh on the on the Alaska side, uh 23% comes from local sources. 23% of all funding comes from local sources. On the U.S. average side, 43% comes from uh comes from local service sources, 20% higher uh than on Alaska. The way I look at this, take out federal and look what the division between the state and the and and the localities are, the the source of funding coming from the state and the localities. On the U.S. average level, it's 45 state, 43 local, about even, about 50%, a little over 50% coming from the state side, a little under 50% coming from the local side, but when you round them about 50-50 between state and local. On Alaska, it's more than two to one. Um uh it's more than two to than two to one on the state side versus the local side. The local side uh is uh uh is significantly uh less. And on a on a total average, let's see, between the two, uh 75%, according to the latest numbers, 70, 75 percent is coming, 76 percent is coming from Alaska, 24% or come from the state side, 24% coming from the local side. Some people look at this and say, well, you can't really do that because Alaska's got the REAAs. It's got the it's got those school districts that the that the state funds entirely, and that's what's distorting the percentage. That's not true. I did a calculation, I ran a calculation using the state's numbers uh and excluded the REAAs um and and took those out of the calculation, and it's still 71% between the two, between state and local, it's still 71% uh state funding and roughly 30%, 20, 29 um uh local funding. So the ratio of dominant state funding to local funding um uh exists even after you take uh take out the REAAs. The reason is the REAAs really don't take that much money, and so they don't distort the overall percentages uh all that much, even though they're totally funded, even though they're totally funded by the state. Here's the thing that that I want to focus on. When a lot of people like to say, oh, Alaska's funding its schools at a lower level than the than the national average. It's doing, you know, it's doing this or it's doing that compared to the national average. Well, if we're gonna use that, I mean if if if if that's good for looking at the at the spending side, it ought to be good for looking at the revenue side. And Alaska is is is utilizing local revenues to a lot lower extent than nationally. That drives a lot of things. When when when the localities don't have to pick up a big part of the tab of spending, when it's all essentially to them free money coming coming from the state, they're not very cost conscious. When they don't have to go to their constituents and explain, oh, we need more funding for this or we need more funding for that. If if you want to do uh if you want to build a new building or if you want to expand programs, we're gonna need to increase the uh local taxes. They don't have to, they don't experience that pushback that goes on um at the national level. And and so when you when you also talk about consolidation, I mean I'm uh my mother lives in Illinois. I spend a lot of time here now with her. Um there's a there's a lot bigger local funding share in Illinois than there is in Alaska. And so you have consolidation of school districts in Illinois. I mean, the localities have to face up to the fact that they don't have enough revenue base within their within these smaller school districts anymore to uh to sustain themselves. So they consolidate. So they have to consolidate with nearby with with adjacent school districts and build bigger school districts that that that have that have that bigger tax base and can and can pay for the type of schools that that people want. We don't have that pressure in Alaska because the state's funding for it. So the local school boards essentially say, yeah, you know, I well, we'll just go to the state and lobby for more money. We don't need to worry about the spending side. We need to worry about the revenue side. I mean, we'll spend everything we can get, and the revenue's coming from the state largely. So we need to focus, uh, we need to focus on lobbying the state. That's where the that's where the revenues are. We don't need to worry about selling it to our local constituents because, and we don't need to, and we don't have any pushback from our local constituents because the bulk of the funding is coming from the state. So I think this slide and and the issue of where are the revenues going to come from uh in terms of funding not only the increases that the task force is pushing for, but also just the base funding, uh, I think this slide should be, you know, sort of its own presentation or its own session around where what the revenues are going to be and how we're going to raise these revenues. And if and if looking at national averages is good on the spending side, it ought to be good on the revenue side. And we ought to focus on if you want to raise additional revenues, it needs to be, it needs to come from the from the local level. And let's talk about how we're going, how we're going to do that.
SPEAKER_00:Now, part of this problem, of course, deals with the uh the equity thing that the federal government has put on us over the PILT, right? The payment in lieu of taxes and things like that. And so many of these places have are capped. They can't spend anymore locally because of this federal rule, because we see we receive, what,$100 million or something,$124 million from the federal government in payment in lieu of taxes. And to get that money, they say, okay, well, then you can't have any disparity between what you spend in one district and another up to a certain point. And so we've got some places where they're spending locally, they're put they're contributing almost to the cap. Uh, and most places are are spending a significant amount towards their cap, 75% plus. But according, if we keep taking this federal money, we can't increase the local contribution anymore.
SPEAKER_01:So we're like the last state that takes federal money, that uses federal money in this way. It's not it's not that the federal money doesn't come to Alaska if we if we if we stop doing the way we're doing it. It's that the fed, it's that the federal money will go to the districts that that that are that are creating the entitlement to this money or creating the the the claim on this money, it will go directly to those districts as opposed to as opposed to coming through the state. If it doesn't come through the state, if the state isn't the one that's acting as the flow through, uh then the disparity test, the federal disparity test goes away. And as I say, we are the last state that is doing it this way, and the last state that's subject to uh the disparity test. I think, I think it's time for, again, if we're going to compare Alaska to the rest of the nation, I think it's time for Alaska to be like the rest of the nation and and back off from using the federal uh pilt money uh in the way we're using it. And and the way we're using it is it's coming into the state, and the state gets to back off what it's spending by substituting the pilt money uh uh for uh uh for state revenues. If we as part of the redesign, we say, okay, look, we need to be more like the national average. If we're gonna be more like the national average on the spending side, we need to be more like the national average on the revenue side. And if if we as part of the redesign of this, uh uh we can say, okay, the PILT money is going to go direct to those districts. A number of those districts that that that generate the Pilt money or that create the entitlement to the PILT money are the REAAs. So that money would go direct to the REAAs and and and would reduce the amount that the state is having to pay uh to the REAAs because they would start getting federal money um directly. So I it's it's part of the it's part of the calculation, but it's not a reason, it's not a reason to keep this disparity between the localities and the state uh in place. Other places have done away with it. We can do away with it as as well.
SPEAKER_00:Brad, Keith Lee, Alaska's for sustainable budgets, the weekly top three. Now, um, well, quick quickly, Brad, 30 seconds. What do you think the chances are that the education committee actually takes anything, any a look at this in any way, shape, or form?
SPEAKER_01:Maybe, maybe low, but I think it's an issue that we ought to keep pressing. I mean, what what they want to do is they want all of the gravy, right? They want all of the let's look at the let's look at the national average and we ought to be like the national average. Well, the pushback on that, part of the pushback on that needs to be if you want to look at the national average, let's look at the national average on the on the revenue side also.
SPEAKER_00:Donna says, I agree with Brad. Every other state, Don Arduin in the chat room. Uh Harold said, where are you going to get your local contributions in rural Alaska? That was the whole point, was that the federal monies go straight to rural Alaska in lieu of the local contributions, right, Brad?
SPEAKER_01:Well, some of the REAA money goes to like Anchorage and Fairbanks because of the uh the airport, because of the military bases. But it it follows where federal lands are. So those districts that have large federal lands would have a large influx of the of the PILT money. I'm I've not done an analysis of where that shows up by district, but it in some of the REAA districts, it shows up that way. In terms of, in terms of the in terms of Western Alaska, where's the local contribution going to come from? Well, you know, they could use sales taxes to generate revenues, local sales taxes to generate revenues as opposed to as opposed to property taxes. There's there's a number of ways. And then, as I said, in Illinois, one of the pressures that results from that is consolidation of districts, reduction of administrative costs, reduction of overhead costs through consolidation. So it would force the local districts, not only in the urban areas, but also in the rural areas, to look at how they're doing things and and look at at reducing the cost structure of what they've got in those districts. Absolutely.
SPEAKER_00:You know, Brad, the problem is that I am um, yeah, I'm I I the problem is that they've already decided, I think, what they want to do. And now they're just that that's really the the whole impetus and the whole appearance of this whole education task force thing so far has been they don't want any outside testimony. It's all industry insiders and municipal, you know, municipal league and all these other kind of guys, and it's all just pushing for we need more. Um and it's I don't think there's really any deeper analysis going on, and that's that's where I think that this falls apart. I agree with you, but I just don't think that they're that interested in looking at it.
SPEAKER_01:Well, there's two, there's a couple of things I'd say, Michael. One, we've got Cronk and Ruffridge on the task force, right? And I would look to them to at least raise the issue. Maybe it's not an issue that's raised by those who are pushing for for more spending, but Cronk and Ruffridge are on the task force. And and and I would think that we should look to them to uh to raise the revenue issue. Ruffridge did in one of the earlier sessions, briefly. Uh, but I think you know, as as members of the task force, they have the right to ask questions and have the right to to to press on that issue. The other is I I don't know that we've got a unified position uh from from all of the special interests about about funding. I mean, a AML, the Alaska Municipal League, testified in favor of eliminating the caps on local funding, essentially dealing with the disparity test by eliminating the state's use of that, of that at the state level, eliminating the state's use of those federal funds. And and so I think there there might be some support, even among the special interests, uh, to uh to go to uh uh to go to bigger uh local presence, local funding on uh on education.
SPEAKER_00:Brad Keithley, Alaska's for sustainable budgets, the weekly top three. Um sorry, I'm just thinking, I'm just I'm just I'm thinking how how can we how can we get this to Cronk and Ruffridge and guys like that? How can we show them this? I I don't know. I know Mike Kronk watches the show occasionally, um, but I I I I really wish that they would get into this. Now you did say something, and I didn't want people to hear what you didn't say. Rick said, Brad, quote, we don't need to worry about spending, unquote, Brad, Brad, Brad. Really? That's not really what you were saying, right? You were saying that they were talking about the comparative of U.S. average spending. That's what you were talking about. Yeah, I mean, they're focusing on spending.
SPEAKER_01:I'm not, um, people will worry about spending. It's who worries about spending. I want, I I think, I think we would benefit as a state if we pushed the who worries about spending levels down to the local level. If if you had to, if if the local school board members had to look their uh their neighbors in the eye when they go to the grocery store and and the neighbors are gonna have to pay for that increased spending that the school board's pushing for, I think we have a lot different result than uh than than we do under the under the current system. So it's who pays for the spending is the big issue. All right.
SPEAKER_00:Continuing now, Brad Keithly is our guest. And this sounds like it's going on number two of the weekly top three. Sounds like it's my house. It's your fault. No, it's my fault. No, it's my fault. No, it's your fault. No, it's Brad. What do you mean? It's that we're we're playing the back and forth game. What's what's going on here? Is it your fault, Brad, or is it my fault?
SPEAKER_01:There was a there was an article in that I didn't see anyplace else in the Juneau Empire. Um, and it was a report on a presentation gave by the Juneau delegation, the the Juneau uh Jesse Keel, the Juneau senator, and Andy Story, I think it was, one of the representatives to the Juneau Chamber of Commerce. The headline of the story is what does the future hold for the permanent fund dividend? And of course, that immediately got my attention. Um, and it's it's really reporting on what Keel said about that issue uh at this at this presentation. Um I've heard the phrase, so here's here's the the parts of it, the part of the article that I found interesting. Keel said last year he was disappointed that the governor did not release a more realistic budget proposal, one that wouldn't need to be drastically rewritten by the legislature. Last week he said many legislatures doubt that the new plan will be substantially different, but he's choosing to remain hopeful. I've heard the phrase a leopard can't change its spots a couple of times. Keel said, I choose optimism. We live in Alaska, so I'm hoping we got a ptarmigan that will change uh that will change uh uh uh feathers uh again. Still Keel warned that without a serious fiscal proposal from the governor, the state's payout program, the PFD, could be at risk. If the feathers don't change, and if we don't get a serious proposal for a fiscal plan that the legislature can then act upon, it'll be the end. This is Keel, it'll be the end of the permanent fund dividend check. What we've got going on here is is is a game of it's not my fault, it's your fault, and then the other guy says it's not my fault, it's your fault. Right. That he will wait for something from the legislature to come up on alternative revenues. And without alternative revenues, the PFD is dead. I mean, what what we're doing is we're essentially taxing the PFD, taxing middle and lower-income Alaska families to pay for the deficit gap, huge deficit gap that we've developed at the state level. And if we don't have alternative revenues to fit in to pay for that gap, then the PFD gradually is going to be totally totally consumed. The governor said, Governor Dunley said, I'm not that he's not going to move forward on alternative revenues, substitute revenues. He's going to wait for the legislature to do something and bring that forward to him. Now we got Keel, uh, one of the one of the most influential uh senators on the Senate majority side. Keel saying, It's not our fault. We're waiting for the governor to come forward with a proposal uh on alternative revenues. And if he doesn't come forward with an alternative with a proposal on alternative revenues, it'll be the end. This is to quote Keel, it'll be the end of the permanent fund dividend check. The last time I checked, both of them, either of them could put something on the table. The governor has the ability to put bills on the table uh through the rules committee to put bills on the table. He does that with the budget every year. He does that with a variety of administration proposals, uh, put bills on the table in the legislature and trigger uh the legislature's consideration uh of legislation. The legislators certainly have the ability to put in bills and and to bring them up in committee and pursue them um uh uh themselves. Uh and so you know what we've got here on the PFD is everybody trying to blame, each side trying to blame the other for not moving forward with a PFD fix, and each side saying, Well, if the PFD ends, it's your fault for not having moved forward with legislation. Sometimes I sometimes I hear legislators say, Oh, well, even if we did this, even if we passed a bill, government veto it, and so it'd be all for nothing. Well, that didn't stop them on education funding. I mean, I mean, the the potential fear of administrative push pushback, administration put back didn't stop them on education funding. It it's a made, it's a made-up excuse. Right. Nobody has the guts to step up and say there are more equitable ways to fund to fund government than what than what we're doing right now, and to make that and to put that proposal on the table. They want to blame somebody else for uh for not uh for not going first. And I just think it's I mean, I think it's it's it's a testimony to how gutless uh both sides, both the both the administration and the legislature is uh have become on this issue.
SPEAKER_00:Well, and there's some deep irony here, first of all, because Keel was such a key player in the fiscal policy working group, and he signed off on exactly the fiscal plan that they that that would help fix this. And yet he didn't propose anything, he didn't support any of Ben Carpenter's thing, he didn't put any of those things forward. He's looking at the governor. The second part of irony that Anthony just points out, that it's ironically fitting that he's comparing the government and its ideas to a ptarmigan, the dumbest game bird in history, the one game bird you can kill with a rock if you're if you're cautious. I mean, you know, that's the way to compare government to uh, you know, to the button that's where we're at right now. I mean, it it it is the oh, it's not my fault, it's your fault, even though I have the solution right here in my pocket. I'm just not willing to, like you said, they don't have the guts to step up and say, we spent all this time producing it, we all agreed on it, and now we're just gonna put it back in the file cabinet and walk away.
SPEAKER_01:Yeah, that's an excellent, excellent point on Keel. I mean, he was part of the fiscal policy working group. He lobbied to get himself on there, uh, he lobbied to become part of it. He was part of those who signed off on the comprehensive plan, uh, which is what the fiscal policy working group is. Uh a little bit, as we've talked on previous shows, a little bit of everything, a little bit of oil company revenue, uh of increased oil company revenues, uh, a little bit of spending cuts, a little bit of broad-based revenues, a little bit of PFD restructuring to go down to POMB 5050, a little bit of everything, broaden the base, spread the burden, uh, and everybody just takes a little bit of the of the haircut needed to resolve uh the fiscal situation. Keel was part of that, uh lobbied to get himself on there uh and and was an influential part of the result. And now he's just stepping back and saying, ah, not my fault. Um uh, you know, it's the governor's fault for not for not putting a plan on the floor. I it's uh it it is it is the worst, the worst of government from both sides for neither to put the plan on the floor. I mean the governor, all the governor had would have to do is say, okay, this you guys set up a fiscal policy working group. This was your proposal, bam. You know, here's your proposal. I put it forward. You want it as an administration proposal? Here it is, uh on the table. Now, you know, live up to what your fiscal policy working group uh uh proposed. That's all he'd have to do. The legislature on the same by the same token, all they have to do is say, okay, we did a fiscal policy working group, we came up with a proposal, bam, let's do it and and let's go forward with it. Um, I mean, it's sitting there for either side to use. And and both sides are essentially saying, Oh, not mine. I'm I'm walking away from it, and letting the worst possible solution, the most regressive tax ever proposed, to quote Matt Berman again. Yeah, let the worst possible solution be the one that they continue to default to.
SPEAKER_00:Right. Well, inaction is action, really. I mean, that's really what it comes down to. They can just let it continue to dribble along and point the blame and you know, play the blame game and point fingers, and they just can continue to let uh government spend continue to increase, and they're okay. A lot of them are okay with that. They're just they're just fine with that. Um, and and of course, we're not seeing uh we're not seeing a lot of the candidates bring this up either, a little bit. They're touching on it, they're brushing by it, but they're not embracing it, and they're not, you know, they're not coming out with. I mean, the plan is already laid out. Even if you want to fold some of your new ideas into the same plan or modify it, overall it's a plan that everybody in the legislature has signed their name. Well, not everybody, but a bunch of people in the legislature have signed their name to that they agreed that this is what they could do. Well, now hold them to it. I mean, if you presented this to Keel, it would be kind of hard for him to go back and say, Well, but uh, you know, I mean, he could, but it would be a little eggy on the face-y, you know, kind of thing. Um, but I mean you did you did that once.
SPEAKER_01:You had Keel on the show, and yeah, and you asked him that question, and it was, oh, I, you know, somebody's got to come forward and put the put the you know, meat on the bone. It was sort of just a bones plan, and yeah, I agreed to 50-50 pomb, but it was it was contingent on a bunch of other. I mean, you he walked away from it, but it's not just it's not just him. Shelly Hughes, Shelly Hughes was on the fiscal policy working group, and she's running for governor, and she puts fiscal policy as her number one issue, or first issue out of out of three. If you look, if you if you look at her website, there's not a word on there about the fiscal policy working group. I I would think if I were her, I'd make that front and center of my campaign, but she's walking away from it. So I it it is it it it is an exercise, it is a demonstration of the gutlessness, how how gutless government can be uh on in everybody in terms of uh in terms of stepping up.
SPEAKER_00:This is the this is the whole, this is where that stereotypical rule by committee kind of thing came out, right? I mean, this is how what it's about when you get a bunch of people and they can all point fingers at each other and say it's their fault, but they you know nothing ever gets done and it's the worst outcomes possible. This is what happens when you build a you know an aircraft carrier by committee or whatever, and it sinks on the first day. This is where we're at, right? This is this is kind of where we're at right now. Nobody wants to take the blame, nobody wants to have the hard truths, and nobody wants, nobody has the guts, as you said. Nobody has the guts to tell people the crisis is coming, the bridge is out, pull the lever right now when we can stop this train instead of just shoveling more coal into the hopper and say we're gonna jump the gap. It's just not gonna happen.
SPEAKER_01:Yeah, and and it's and Keel is I mean, I I first read that article. article and I thought, okay, good lord. You know, it it's now now we're now we're having people predict that now we're having legislators predict the end of the PFD. But then the more I thought about it, the more, well, Keel Keel could do something about this if he wanted to. The governor sure, sure could do something about it, but Keel could do something about it also. And it's just it is it is it is the worst possible the demonstration of the worst possible outcome. Everybody running away from fixing what is what is clearly the worst possible solution to the to the situation we've gotten ourselves into.
SPEAKER_00:And unfortunately most Alaskans have no idea I was having a conversation with somebody last week uh about the thing and I'm like well you know the things and then I said the big deficit and they're like big deficit what are you talking about? They've got no idea. They have no idea that this is coming. They have no idea that the crisis that we're about to face uh and the loss of the PFD. So I had this 10 minute explainer with them and they're like wow I mean they just they're just not paying attention to what's going on which is by design I guess I it's it's frustrating to see. And so I don't have much hope. I mean the the session starts in 60 days and I have very little hope that anybody is going to the governor or anybody else is going to come forward with some kind of long-term fiscal plan.
SPEAKER_01:What do you think the give me a give me a Vegas odds on this real quick Brad well remember the governor said last summer well said last spring he was going to have a fiscal plan out by the by by the end of the year. Remember that I'm going to go back and find that quote so I can start using that. But he said he was going to have a fiscal plan out. He was going to put a fiscal plan on the table by the end of the year. Well the governor's budget's due in 30 days a little under 30 days uh the the the revenue forecast is due the fall revenue forecast is due in a little under 30 days if he's going to come up with a fiscal plan as he said he was now's the time to do it. So I don't know I are are people as good as the word as their word maybe not wow was that even a question I think that was rhetorical at this point.
SPEAKER_00:Jeffrey says governing by committee makes it so nobody is culpable. And that's really that's again it's the finger pointing and everything else and it's not my fault it's their fault it's you know is it it's the governing by committee makes everyone blameless and they can just play dumb and keep doing what they've been doing. Oh boy something I actually agree with on Harold he said I watch Gavilla Gavel there's plenty of guts. It's the backbone that's suspect. True I mean they're pretty gutsy in some of the proposals that they put out there to spend all your money uh they got some guts for that but they have no backbone when it comes to actually uh you know making some of those hard choices as well. So they can they can make some gutsy moves but only when it benefits them uh at that point as well. Uh Brad I mean I I feel like this is where I'm coming to that point of the year where I'm just exhausted from all the the political stuff you know watching this. And again I was so shocked that this guy had no clue that what I was talking about because I mean I you know I know a lot of people don't but I figured this guy would know what was going on. I figured this person, oh, they're kind of in the no they you know they they're they're plugged in and they just looked at me with this blank glazed expression and I was like holy crap we are in so much trouble. We are in so much problem we're in so much trouble at this point.
SPEAKER_01:Well it's it's the Orwellian use of language that we've that that both the legislators largely and uh and the press have adopted right I mean surplus now is is the word we use to describe excess PFD cuts. Balance is that we've cut the P we've taxed middle and lower income Alaska families through PFD cuts enough that that spending revenues equals spending but you're not focusing on where the revenues are coming from and you're not focusing on the fact that there's this huge gap in the in the in the traditional budget that's being closed by this tax this PFD tax on middle and lower income Alaska families so we we've adopted this Orwellian language uh that that misleads people I mean intentionally misleads people into thinking oh we're doing okay we got a balanced budget and sometimes we even have a surplus um and and so the government's doing okay it's it's we we've adopted this news speak that that legislators use and the press picks up on and the press press uses and the governor doesn't push back on it much um and even conservative legislators don't put push back on as much on on it much so you've got this whole language that misleads uh uh people like your friend and you know you can read 1980 george orwell's 1984 and understand what that leads to it leads to a this whole surreal world built upon uh the uh the misuse of language up is down down is up yep doesn't matter it's all it's all good ministry of peace is actually the ministry of I mean it's it's there you just you you just you know you adopt newspeak that that uses uses traditional words for the opposite meaning of what they traditionally meant.
SPEAKER_00:Exactly yeah no it's a it's a topsy turvy it's the upside down Rick says are they gutless or they just don't have enough knowledge for the job I'll be honest I think that's giving them a pass. I think they have enough knowledge at this point uh to know what's going on uh and understand it I just think that they don't want to be out at the pointy end of the spear and take the slings and arrows I mean look at everybody who's bailing out of the legislature it's like they can feel that the gravy train is about to end and now's the time to get out before the thing the real blame game starts. You know what I mean? That's what I feel anyway, Brad.
SPEAKER_01:Well there there's no one who knows more in the legislature that knows more about these issues than the people who are on that working group fiscal policy working group. Keel was on the fiscal policy working group I mean he certainly understands uh what he's saying that that what he's and what he's saying is we're just going to continue taxing the PFD until it is no more unless if nobody comes up with with substitute revenue. So I don't think I don't I mean there may be a few legislators that are so clueless that they don't understand it. But I think uh I think it's I I think that's the exception rather than the rule.
SPEAKER_00:Brad Keithly Alaskans for sustainable budgets what did uh Corey say Corey said so oh here it is seems like if they put this one out there they'll have to admit that they're the ones that broke it to begin with. And again that goes back to my whole rats leaving the sinking ship thing. This is the pro the main people who are the ones that have the levers to be able to pull to make this happen are the same ones that broke it in the first place Brad and that she's right they would have to admit that the that the tack that they took and that and that their suppositions were wrong and nobody wants to face that.
SPEAKER_01:Yeah maybe that's right. Maybe that's right. And and the governor certainly you know bears part of the responsibility for breaking it um he didn't follow up his his spending cuts of 2019 uh uh he got strong pushback on that uh and and never followed up with it again um and never followed up with substitute revenue so yeah everybody would have to admit that they're part of the problem but it's a but but at least you could say it's a total problem everybody's failed and and I'm the one who's going to stand up and come up with a solution.
SPEAKER_00:Yeah. No and I cancel the fiscal policy working group has got all the levers all of their yes Harold it's got the oil giveaway it's got more money from oil yes it's got cuts yes it's got a 50-50 PFD yes it's got a spending cap it's got all the components uh like you said everybody's ox gets scored a little bit but at least we come away with something that would actually be workable uh but nobody and and of course you know Ben Carpenter is almost a cautionary tale at this point for people I don't know if anybody's gonna want to touch it. That's the worst part. Welcome back to the program Brad Keithly the weekly top three these are the three big things that Brad thinks we should be watching out for this week. And uh now we come to our favorite part of the show which we seem to be repeating you know quite with some regularity is the discussion on how do we pay this is supposed to be like I mean this should be like the number one question asked at every discussion meeting candidate event town hall pre-session meeting people should be asking how do they pay and uh Brad what do you say?
SPEAKER_01:Well so I it this is a segment we've talked or this is a subject we've talked about on previous shows but I think it one one it's one that bears uh repeating uh the Fairbanks there's a there's articles the news miner there's articles on Alaska News Source the the TV station the uh uh website about uh fairbanks coming to uh preparing their uh legislative and capital priorities uh preparing to talk to the legislators in the pre-session session that they have uh pre-session meeting that they have between the the the local government and the legislators up in fairbanks and and it occurs throughout the state uh about what you know the priorities are and and how they should be how the let what what priorities the legislature should take legislators should take in terms of terms of what local government thinks is important. This ought to be a two-way discussion and my my point is this ought to be a two-way discussion it's a one-way discussion largely uh uh these sessions are a one-way discussion largely because it's local government telling legislators this is what we think is important that we spend money on these are the issues that we think you ought to prioritize uh as as you look at as you look at the coming session some of it is defined benefits some of it is K through two K through 12 spending some of it is school bond reimbursement some of it is it's all around money issues that the local government wants the state to spend more on or you know live up to or in the case of school bond reimbursement or or or or other things but it's mostly the the legislat the sessions are local government saying we want you to prioritize these spending levels this this uh uh this legislation or or that legislation in the in the in the coming session it ought to be a two-way discussion and and the and the and the legislators coming back their part of the discussion should be all right how do you want us to pay for it uh what what is your from the local stand from the local level what is your perspective on how we ought to pay for this and if I were a legislator probably will demonstrate why I'm not but you with with this response but if I were a legislator I would say look the national average on on K through 12 funding is that local government pays 50% uh of the of the state local combination set aside the federal level the state local combination uh local government pays 50% in Alaska the average is that that the state's paying two to one is paying you know 75% 70% while local government's getting off with uh uh with 35% uh in terms of 33% whatever in terms of in terms of the the percentage of of of combined payment if you want us to if you want us to authorize spending more we need you to tell us how we ought to pay for it and if local government if those in local government are going to say well just additional PFD cuts just wipe out the PFD then let them say that and and let that be an issue then in their local races that they're the ones pushing to wipe out the PFD. They're the ones that are pushing to push this burden off on middle and lower income Alaska families. If that's what they want to say let them say it but at least put the issue to them in terms of how do you how do you how are you going to pay for it? We think as a legislator I think that local government when you look at the national averages on K through 12 for example that local government ought to be contributing more that if you want to spend more or if you want to you know just pay for what we've already authorized that local government ought to be ought to be paying more and let and and have that discussion with the local governments put them on the spot to talk about how they think from a local perspective it ought to be paid for. Some of them may say increased uh uh in uh restructured taxes on uh on oil companies some of them may say you know statewide sales tax but but have them be part of the discussion don't let them off scot free just saying oh we ought to spend more on this spend more on that spend more on this you ought to reimburse us more for for school bonds uh you ought to you know give us more for for K through 12 uh don't let them off the hook just saying saying all of this ought to come from right all of the all of this ought to come from the from the state push back and ask them how they want to pay for it.
SPEAKER_00:Because I mean we've they I mean we've created this monster right I mean you mentioned school bonds and I mean there's been plenty of times I remember many discussions over school bonds over the years when I was in Fairbanks where they would literally look you in the eye and go, oh don't worry won't cost you a thing. This is all state money you know and where if people realize that all of a sudden their property taxes are going to go up if the state doesn't reimburse or if they had to pay for that themselves as a community that all their property taxes would go up. You know, I think that there'd be some pushback. But we've created we've created this dependency state in so many ways and we talk about dependency and welfare on the left in the social safety net and corporate you know corporate welfare on the right with uh you know contracts and everything else but there's also this municipal welfare where they said oh we want the state to pay for everything we have all these grandiose plans and these broad ideas and it's state money so don't worry about it. But now we should be worrying about it. That's the thing I mean I I still I go back to the story of the mayor's chief of staff when I was on the borough assembly and I remember there I don't remember exactly what it was but I remember that there was a program that the mayor's office was pushing. Oh we need this program oh it's it's great it's this it's that and I said why this is not something that the people have asked for this is just well it's and then and the chief of staff pulled me aside and goes why are you so reticent against this I mean this is like free money this is federal money and I'm like the money comes from somewhere it's not free and if we don't if we don't take it somebody else will well let them at least we won't be part of the problem you know but this is again that dependency state yeah to some degree to some degree I look at local school boards anymore as what you're really electing when you elect your school board is you're electing lobbyists because the local school board what the local school board turns around and does and says we need more money from the state we need more money from the state to fund K-12.
SPEAKER_01:We need to fund more money from the state to uh uh to uh uh build school yeah build school school bond reimbursement and and so you're really electing lobbyists you're not electing administrators you're not electing people who are who are sort of weighing the the pros and the cons of anything you're electing people who view their job as to go down to the state and lobby for more and if we got to close a school it's the state's fault it's not my fault it's the state's fault because the state didn't give us more money for K through 12 or if or in negotiations with teachers um uh you know teachers want more money well the state needs to give us more money it's not like it's not like oh my gosh we're gonna have to go explain this to our constituents it's it's it's a lobbying job uh to go lobby the state uh for more money and I and and and so what I'm suggesting is we need to push back on those local governments that legislators and others need to push back on local governments when they say we need more the the pushback is well where do you expect the more to come from where do you support the more coming from the more revenue to pay for this more spending where do you support the more coming from and and if they want to say PFD cuts if they want to say all taxes let them say it at least they're saying something but force them on the record about where from their perspective as an elected official in the locality they expect the additional revenue to come from this amorphous oh it'll just come from the state uh is just it shouldn't be an acceptable answer because the state doesn't have any more money the state's already already running huge 30% deficits 30% of the budget is deficit financed through through PFD cuts. The state's already running these huge deficits the state doesn't have any more money.
SPEAKER_00:So the the these sessions that are portrayed in the press and as they actually occur uh in the few in the in the ones I've gone to in as they actually occur are the st are local people saying we need more from the state we need the state to do this we need the state there there needs to be a pushback on the localities and say where do you support the additional money coming from I mean I just don't see any politician at this point and let's face it Dunlevy is aspirational for higher offices I think is is is my feeling on this he's not going to be the one that has egg on his face that uh wants to put time some put together some kind of fiscal plan that's unpop I mean he's already done this once right it wasn't a fiscal plan but it was just the cuts in his first budget and he already had the he already got the beat down from the angry mob once he's not going to want to do that again. And let's face it if you have to put out a fiscal plan where everybody's gonna get their their you know going to feel the pain nobody's going to be happy he's not gonna want to do that.
SPEAKER_01:You know and so and so you ask why the heck did the guy want to be governor? I mean if he doesn't want to step up and take on the issues that are important to the state and fiscal policy is a huge issue hugely important to the state if he doesn't want to step up and take on the issues that are important to the state why the heck did he want to be governor? Why does he want to be senator? I mean it doesn't get any easier at the national level we're running in huge deficits at the national level also social security is a mess and about to crash and burn okay you're one of a hundred if you're a senator so you can't take the blame personally that that might be the only reason why maybe maybe maybe so but but there are issues to confront and and Dunleavy since 2019 has not demonstrated he's good at confronting issues he's good at picking on things yeah I mean he's he's he's been great on he's been hard on social policy uh but he's not confronted the big issue of of of fiscal policy and you know why did he want to be governor if he does if he didn't want to take this on yeah um Donna says he loves the pageantry well maybe but that's not going to get you far that and a and a 25 cents will buy you part of a cup of coffee at this point.
SPEAKER_00:Rick asked a good question and I often wonder this do you ever get called for advice to politicians or politics or people in the do they ever call you and say what do you think about this or what do you think about that?
SPEAKER_01:I get off the record uh emails and off the record texts uh about various issues from various people and then they sort of ignore it uh some do that's the worst isn't it some do you like let me let me compose this novel to answer your question and then just cricket you never then never none of it's ever incorporated never discussed never anything else it's got to be frustrating well yeah yeah it's sort of like it's sort of like you know talk to Brad Keith check did that follow his advice no no no I'm not gonna do that but I check I talked to him I've talked to various people I've talked to people from all sides yeah give me a break no I mean I try and tell everybody that you know they should be going back listening to the podcast of your shows you know talking to you directly doing whatever because they'll be like even some politicians I try and break this down for them they're like what I'm just like are you not paying attention to what's going on I mean you guys are supposed to be the one you know what is you know it's uh it's it's pretty it's uh it's it's it's crazy um Bruce Tangerman I'm sorry Bruce Tangerman in the chat room Brad what does the oil price need to dip to$50 no doubt for the entire POMV to be used for government because the PFD will then be needed to fund the ADF PCE higher ed and AHFC funds um it's pretty well it's in the 50s um yeah I don't know I can probably do that calculation but it's so we're at uh we're at 63 now basically uh for the year and 61 and we're still showing some PFD uh uh over the next year so it's got to it'll be in the 50s someplace yeah because it's what 44 million dollars per dollar barrel of oil something like that 40 oh yeah it means you talk about a ten dollar drop or ten dollar drop and it's about 440 million dollars right so it's between it's between 35 and it depends on whether you're using the administration's numbers or ledge finance numbers uh it varies but it's um uh between 35 and 40 dollars so somewhere if you if we dropped it if we drop down into the low 50s we're we're 500 million less in the hole already there goes the rest of the PFD at that point yeah we're probably we're yeah uh we're probably 55 mid 50s maybe do it i mean not but it's it's speculation i haven't i haven't run the numbers there there'd be a five in front of the number somewhere it would be a significant amount and and granted the 660 million is about what the pay payout of the pfd was at this point so it'll be uh it it'll be interesting to watch uh but Bruce says there's a zero chance they escape june o next spring without at least a thousand dollar pfd which will be entertaining to see which pots of money they tap to fund everything yeah because it's a political year nobody wants to be the guy in the political year that uh that ended the PFD you know the way I look at that the way the way I look at that the way Bruce doesn't look at that but the way I look at that is a a$2,500 tax$2,500 PFD cut. It's not a$1,000 PFD it's a$2,500 PFD cut$2,500 plus next year PFD cut that they need to that they need to do to to balance the budget. That's how much in the whole the state is that they need to tax middle and lower income Alaska families that much in order to close the deficit.
SPEAKER_00:Well it's like I was saying earlier I thought that this would be the last year of the PFD but then I can't remember it was you or somebody else pointed out that it's an election year and I thought okay well maybe we'll get a PFD this year. But after that the the the the the curve does not look great from there, right?
SPEAKER_01:Yeah it it depends a lot on on who's elected governor I suppose um you know I still hope that there's a candidate yet to come that actually has a solid fiscal policy. Maybe there won't be and and maybe and and I guess I hope on top of that that candidate gets elected maybe they won't be but but I think in part it depends excuse me in part it depends on who we elect as governor.
SPEAKER_00:Yeah no I would I would agree with that.
SPEAKER_01:60 seconds Bradless give me final thoughts for today final thoughts are uh we're in for a heck of a session uh the governor's budget is due in 30 days we're gonna start focusing on what we expect to see in the governor's budget what we should see in the governor's budget what the revenue forecast is going to be in the fall revenue forecast and what that's gonna lead to so it's it's it's gonna be thin uh and if the governor did what he did last year it's gonna be an abrogation of his responsibilities but he said he's gonna come up with a fiscal plan. So we're starting to look we're starting to look for the governor's fiscal plan.
SPEAKER_00:Okay we'll be we'll be looking out for that solid fiscal plan that he's been working on all year. We'll be pleasantly surprised if he actually delivers something. Otherwise um yeah I I think it'll just be business as usual. Brad Keithly Alaskans for sustainable budgets the weekly top three that's hour one in the can Brad thank you so much.
SPEAKER_01:Michael as always 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 Keithly Managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week on the weekly top three
