The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (12.8.2025)
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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 December 8, 2025.
This week, our top 3 issues are these: 1) we explain why neither the “fair share” nor “all we need is more development” sides of the oil tax debate is addressing the issue in the way the Constitution does and the Legislature should (2:15), 2) we discuss a recent op-ed by Larry Persily: while he explains that he understands that Alaska has developed a K-shaped economy, he doesn’t seem to get that he and others who advocate for deep PFD cuts are a big part of the reason for it (19:35), and 3) after reviewing recent news reports, we explain why the Bishop for Governor campaign seems to lack any appreciation of the most critical issue facing the state (39:22).
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 December 8th, 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's 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 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. This week, our top three issues are these. First, we explained why neither the fair share nor the more development sides of the oil tax debate is addressing the issue in the way the Constitution does and the legislature should. Second, we discuss a recent op-ed by Larry Pursley. He explains that he understands that we have a K-shaped economy, but what he doesn't seem to get is that he and others who advocate for PFD cuts are a big part of the reason. And third, after reviewing recent news reports, we explain why the Bishop for Governor campaign seems to lack any appreciation of the most important issue the state is facing. And now let's join Michael.
SPEAKER_00:Let's let's dive into the weekly top three, Brad. This week, uh, we're gonna start off with uh the question, which we actually spent a good time uh on this, and I've been talking about this through years. What the Constitution says about our resource development. What does the constitution actually say? And I will say again, when you hear the word maximum benefit, what do you hear versus what does a politician hear? And that's I think the big the big uh the big key here. Let's get started uh with the the weekly top three. And you muted yourself.
SPEAKER_01:At least at least at least I put the microphone back together. Yeah, I kicked it out.
SPEAKER_00:Oh, oh, good job. Good job. Okay, so uh anyway, what what is what does the constitution say, Brad?
SPEAKER_01:So there's a there was a discussion, a legislative forum up in Fairbanks, uh reported on by the Fairbanks Newsminer, that I think crystallized something for me that maybe I'd realized before and forgotten, and maybe I I I uh this is the first time it's come to me, but it crystallized some thoughts for me about oil taxes and people's reactions to oil taxes that uh that I think is important. The Constitution says maximum benefit. That's exactly what that's exactly right, what what you quoted the Constitution is saying. But I think I think people hear that differently or articulate that to themselves differently, um, uh depending upon which which side of the of the fence they're on. Um some people I think see that and say maximum revenues. Um, maximum revenues in the sense that let's take everything from the old companies we can, um, uh as long as the old companies don't you know shut everything down and and leave. That is maximum benefit to us to maximize those revenues. And I think that was the predicate on on which ACES was was based. I mean, you can see uh you can see the effect of that, you can see the background of ACEs, and then you can see the effect of that in terms of maximizing revenues uh to the state. The problem with that, the problem with ACEs, the problem with maximizing revenues was it didn't the oil companies didn't pack up and leave the state, but they didn't bring any more money to the state, they didn't bring any more investment to the state, they didn't bring any more activity to the state. So what you had was a situation in which we were taking a big chunk of revenues as as production continued, but as but but production started to decline. And even though we were taking a big chunk of revenues, that production was declining, and we weren't getting we weren't getting the maximum benefit out of uh out of our resources because people had stopped had stopped developing.
SPEAKER_00:Oh, we lost you, Brad. Your mic just crackled. There you go. Sorry. You just clicked off again. I think you're kicking the cord. There's there you go. There we go.
SPEAKER_01:I'll just I'll just stand here. Anyway, so I think people see maximum revenues, maximum benefit. Interpret that as maximum revenues and interpret, you know, we can take a big chunk of that um as long as the oil companies don't leave the state. Then we have the then we have the other side, uh, and the other side, I think, looks at that language and they say maximum production. That that what we what we're supposed to be doing is maximizing production of the state's resources, maximizing the development uh of the state's resources. And that's sort of what SB21 was predicated on, but not really. SB21 was predicated on trying to find the sweet spot between certainly where ACEs had led us in terms of maximizing revenues, but at the expense of development, and and and the and sort of unfettered development. I mean, you could have zero taxes and you'd have a huge amount of production, probably, because because the that cost would go away from the oil companies, and so they could you know continue to invest. But but SB21 was trying to find the sweet spot, I think, between maximizing production, um uh at all in at all costs, and and where we'd been with ACEs in terms of in terms of maximizing revenues. The problem is, I think SB21 as it's gone on, and it's now what uh 12 years old, it's about to be 14 years old. I think SB21 as it's gone on, certain of the provisions in SB21 that were intended to encourage development, intended to increase production, have sort of have sort of gone amuck. And they have they have resulted in in sort of going much more toward the side of let's have no taxes and maximize and and focus on maximizing production. And I think SB21, as it's evolved, has gone over into the into the maximized production sort of without regard to revenues camp. And you see that you see that particularly, I mean, you see that in the 10-year forecast when you have production increasing by 40% and production taxes, which is a significant way we get revenue out of out of oil, production taxes going down by 40%. You see that in the 10-year revenue forecast. But you see it even more in the DOR studies done recently for PICA and Willow. You see that that we're not, I mean, some people say that we're just deferring cash. We're gonna have a cash flow problem for a while, but then that cash is gonna show back up. It's not. I mean, what happens with with the way the GVR, the gross value reduction provision is working on PICA, for example, we don't see any production tax revenues out of PICA for seven years from 2025 to 2032, and we don't see full uh production tax revenues until much later than that, after most of the production from the initial PICA, the initial PICA production is gone. And it and it doesn't come back. I mean, that production's gone, does it wasn't taxed at all, and um, and so we are left uh without it's not cash flow, it's just cash deficiency because we never get we never get cash um out of that production. So I think what we've seen with SB30, SB21 is is it's just gone way the hell, way over on the other side. It's gone to the sort of the maximized production. Those who read the constitutional provision saying maximize production without regard to revenues um has sort of gone over the has sort of gone over the edge. What we ought to be searching for is what the constitution says maximum benefit. We ought to be searching for that sweet spot that I think SB21 was initially intended to go after, which was which was in which was continue to have development in the state. So you continue to have production out there, but you get a share of the benefits. Alaskans get a share of the benefits of that of that production. And that's how SB21 was sold. It was sold as we're gonna make, we're gonna reduce taxes in order to increase incentives for investment, we're gonna have increased investment, that's gonna lead to increased production, and we're gonna get the benefits out of that increased production. We're gonna get a share out of that increased production. It's not what's happened with SB21. And so, and so people, I think, I think we both sides are just not reading the constitutional provision. Those who talk about fair share, for example, are really talking about maximizing revenues. They're talking about the old ACES structure of maximizing revenues without regard to what happens to incentives for development. And I think those who who talk about you know SB21 being great, we ought to leave it in place. It's doing fine. We just have a little cash flow problem here in the meantime. Uh, I'm they're talking about maximizing production sort of without regard to what it does in terms of revenues, in terms of what it delivers to Alaskans. And I think they're both missing, both missing the vote here. I think we ought to have a con the conversations about oil taxes ought to always focus on maximum benefit. And it's almost it's almost a mathematical question. It's almost a question of what tax structure allows continued development, but takes a proper share of that continued or uh a share of that continued development for Alaskans, benefits Alaskans in terms of in terms of the revenue flow. And frankly, that's that's almost a mathematical formula. But we never, we never we never discuss it that way. We always talk about, oh, we got to maximize production, maximize development and maximize production sort of without regard to what happens in revenues. And that's what we've got now, or we got to maximize revenues sort of without regard to without regard to what happens to development and production. And that's what happened, that's what happened then under ACES. I think they're both missing, both missing the point. And Alaska's the worst, worse off because of that.
SPEAKER_00:It was interesting, and I mean we could spend a whole day uh talking specifically about the deficiencies in the oil taxation scheme. And I know that you know the removal of the GVR in SB21 would go a long way to that, and we can get into that. But I think it's interesting you brought up this article from the Newsminer because I was watching some of the video of this last week. Um, and then I was reading the article of the Newsminer about all the things that they're asking for. And, you know, this just sounds like it just sounds like a bunch of kids with like, uh, well, we need our stuff. We need our stuff. Uh, I don't care, you know, and the legislators basically to a man and a woman were all saying the same thing. We're facing some serious fiscal challenges, and they're like, oh, we've heard it before. We just want our stuff. Uh, everything from full reimbursement on school bond debt reimbursement to a defined benefits. They want more money for the schools um and uh you know a wish list of capital projects and everything else. I just don't think that these folks understand that that hard times is coming. Um, I think that there's a the the legislators are starting to see that and understand it, but the local municipalities, they've always gotten the sugar from Uncle Daddy, and now it's like um we can't do that anymore. Uh give me your thoughts on that before we go to break.
SPEAKER_01:Well, no, I think you're right. I think you're right. We we have a disconnect. I mean, so when uh Mindy O'Neill, the the new um uh uh mayor, uh was part of this, and Mindy O'Neill said, you know, when confronted with the revenue question, Mindy said, we'll just need we need to get our fair share of oil revenues. That's where the deficiency is. And it's like it's like, you know, we're entitled to this stuff, and and so we need to get it, we need to take it out of the oil companies without without regard to you know what that does on incentives and what that re without regard to what that does on production um and development, because we need the stuff. I mean, we we we need this, we we we think we need this stuff here in Fairbanks, and so we're and so you need to go tax the oil companies more to pay for that stuff. It's not, I mean, they're not they're they're seeing the constitutional provision through their own particular set of eyes. I want more revenue. So the constitutional provision means maximize revenues, or those you know, on the conservative side see, you know, that that provision saying, oh, maximize development of production, jobs, and you know, get it get a bunch of oil up there, sort of regard without regard to uh without regard to the revenues that flow to the state. And and everybody's seeing it through their own own eyes. And the and a lot of the people in the borough, um, you're right, in the Fairbanks Borough, Anchorage throughout the state see it in terms of I want my money. And uh, and I've got stuff I want to spend it on, so give me more money.
SPEAKER_00:Right. I want my two dollars. That's what they're looking for. That's the the the thing here. And it just it should it just shocks me uh to watch some of the commentary. I watched the inter to interchange between Rob Myers and um, I don't know who remember who it was, Bobby Burgess or somebody. Uh no, uh anyway, whoever it was on the board, and they were talking about we just need more money. We just need more money. And and you know, uh again, the question is where does it come from? Uh there's only so much more blood in the stone, and it's it's empty pretty much at this point. You know, this story, this story uh in the in the news minor just, I mean, just lays it out. I mean, um the the what was the thing? Uh Assemblymember Kristen Kelly was equally blunt after she was told that, hey, we're out of money, we need new revenues. It's it's real, she said, stating she'd heard the same argument for 20 years, including the decline in oil revenue. Well, yeah, it just has gotten worse over the last 20 years. It just sounds really stale. You know, we all know revenue's down and dependence on it at the state level is a problematic. We need new revenues. Or maybe we should learn to live within our means and not look for the state to bail out the municipalities. That's part of the problem, is you got municipalities living way beyond their means because they've been soaking it up off the state for the last 40 years, and maybe now they need to, you know, pull themselves together.
SPEAKER_01:Yeah, I mean, what we've done with with the the state support in Alaska, what we've done with the state support for the for the for the localities is sort of disconnect them from reality, right? They haven't had to raise their own funds, they haven't had to go to their constituents and say, we want to we want to do this or we want to do that, and we need you to pay more to do that. I mean, in a lot of the other states, that's what happens. If you want something more with the locality, you have to go raise it from your constituents, and you have to go to explain to them why you're going to tax them more in order to uh in order to raise the money. We don't have that in Alaska, and and we don't have a lot of that in Alaska. And so you have people who say, I mean, a school board, you show up, you show up, it shows up most with school boards, right? Because the school boards are funded largely by the state. And so, so they're sort of just lobbyists, right? If you got a problem at the local level on a school board, oh, it's the state's fault. It's not my fault. I mean, it's not, it's not, I can't do anything about it. You got to raise more money from the state. And and you start focusing, you you try to focus all the anger on the state. And so, and so they don't have any sense of reality because they don't have to confront it. They're not the ones who have to go to their constituents and explain it. They just, you know, blame the state and try to get more from the state.
SPEAKER_00:It's uh it it is the ultimate, penultimate uh example of what you say many times don't tax me, don't tax thee, tax this, tax the man behind the tree, right? It's always somebody else's money that we're using. It's not us. We want it, but we're definitely not willing to pay for it. Uh, I mean, if a community really wanted to have better schools in their community, they should be pushing back on the state on the uh on the federal cap on local contributions. I mean, because you've made that point many times that we're underfunding local schools from the local community contribution as compared to the national average by a good 15 or 20 percent.
SPEAKER_01:Right.
SPEAKER_00:Uh I mean, if you really wanted to step it up, that's you know, that's where you need to go. Uh, but nobody's willing to do that. They're happy to because then Uncle Sugar's paying for it. I don't have to pay for it, right? Or you have somebody else to blame.
SPEAKER_01:I mean, you you have uh I yeah, uh we got problems. It's not my fault, though. I'm trying, I'm trying hard. It's the state's problem. And you know, in the view of some, it's because they're not taxing the oil companies enough. Uh and that that's and that's the real problem, not my problem. Yeah, you know, and so you see, you just had this escapism, sort of.
SPEAKER_00:It's opium, it's one hell of a drug. OPM, other people's money. It's one hell of a drug. That's I mean, that's where we're at. We're all addicts, Jonesing for the next hit from the state or the Fed or somebody who's not us. And uh, I mean, I've been talking about this for 25. I'm exhausted. I'm tired, I'm tired of talking about this for 25 years. I mean, what are we gonna what are we gonna learn? But again, we got a whole new crew of people in there. I didn't recognize half the names on the assembly in Fairbanks because I'm I'm not really paying attention to Fairbanks that much in that regard politically. And and yet all of these guys are saying exactly the same thing that many others have said in the past, which is, oh, we should look to the state for this. We we they need to to step up and they whoa whoa whoa, wait a second. Why aren't you stepping up to do your own thing? It's uh it's kind of crazy. 30 seconds here, Brad.
SPEAKER_01:Well, yeah, and then and then you know the state says, Well, we don't have the money. Oh, you just tax, you need to tax the old companies uh uh more and and take more out of them. And that's you know, there are revisions we need to make make in the tax code. We are not getting the maximum benefit, the state's not getting the maximum benefit, but it's not it's not the be all and end-all answer, it's not gonna you know pour zillions into the Fairbanks North Star Borough to solve the problems they have there.
SPEAKER_00:Yeah. Well, I I I don't think I don't know if anything's gonna change. I don't know if anything's gonna change. Um Kim says, I see a complete crash and burn scenario with all the ignorance in Juno. And maybe that's what it takes. We've talked about this. An addict will only come to you know only that come to Jesus meeting when they hit the rock bottom. And maybe that's what we need. Brad Keith, Lee Alaskans for sustainable budgets. One of my one of my favorite commentators, if you could hear the air quotes there, favorite commentators, Larry Persilli. That guy, he writes a lot, and usually I disagree with most of what he writes. Uh Brad's got a bone to pick with Persilli because uh apparently um he sees the effect of. Things, but never the cause. He's always talking about, he's always got a plan, but it seems like the plan is always the same thing as the assemblies in the local, just more, right? It's just more. He sees the effect, but not the cause. Brad.
SPEAKER_01:Well, so he wrote a column that I picked up in the Peninsula Clarion. It may show up in other publications in the state. The title of it was The Country's Economy is Brewing Calf and Decaf, caffeine coffee and decaf coffee. And the article focuses on the K shape of the economy, the K economy. We've talked about it on the show before, uh, where you know part of the economy is doing well and part of the economy is not doing well. You look at the averages, and the economy seems to be rocking along sort of okay. But when you disaggregate it into the components of the of the economy, it um it uh uh forms this K shape with the with part going up and and part going down. We did a column or I did a column a few weeks ago, a couple of weeks ago in the Alaska landmine where I sort of looked at that and and I and I had a couple of charts in there that I can use to demonstrate both the use the other one first. Let's use the other one first. Uh demonstrate both what's going on in the economy and uh as well as what what Larry personally is overlooking. This chart is is the change in mean real Alaska household income uh by income bracket from 2010 to 2023. And I use that period because that's the period for which data is available from the Census Bureau. And by real, I mean it it we we we it is it is ex-inflation. We take inflation, the effect of inflation, uh the growth created by inflation uh out of it and show the real change uh economic in economic terms, the real change over a period of time. Um and it's by income bracket, and the income brackets are different colors. We start in 2010, where everybody was in 2010 is sort of the base. And then the index is how much they rose from 2010 in terms of in terms of their real median income or how much they dropped from 2010 in terms of in terms of real median income. And you can see that we have both. We have this is the K economy. Um, because you know if you use the the left-hand vertical axis as the as the straight line on the K, you can see the two components, the two legs of the K coming out, one going up uh and one going down. Uh, and you can also see the middle, the the the the average or the median uh sort of staying right at 100% through the entire time. Those going up are those having a having an increase in real income over the period, are those in the top 20%. Uh to some degree, uh the upper middle 20% also have a slight increase. That's the green line that ends up a little bit above uh 100 uh by uh by 2023. Uh but we also have uh a drop. I mean, we also have the bottom of the of the of the of the K economy, and that's the lower 20%. And they end up uh the lowest 20%, and they end up uh somewhere around 92% on the index, 90 at 92 by 2023. They started at 100, but in terms of terms of what's happened over the course of that of those 13 years, they've seen a decline in real income uh over that period of time. And that's what Pursley's argument uh article is about. It's really about the K economy and the development of the K economy over the last decade uh uh plus the develop the the situation in which some have done better uh than the average and some have done worse than the average, and we have this increased uh divide, uh income divide, uh in the country between the two. This isn't this isn't dollars, this is the percent of growth or decline uh from where they were in uh in 2010. And things have gotten worse for for those in the low 20%, and they've gotten better for the those in the in the in the upper incomes. So personally goes that far, and he says, oh, we got this K, we got this this K problem, and we've got we've got this growing gap in the economy uh that's developing that's developed over the last uh 20 years. But then he doesn't address you know what's causing that, at least in Alaska. He doesn't talk about that. And in fact, he's one of the advocates of what have what of what has driven this. We did another chart. Okay, flip to the other chart. We did another chart, and this is the effect of reversing the PFD cuts. If we had reversed the PFD cuts, if we hadn't made the PFD cuts since 2017, uh that uh uh that that we've that we've had since calendar year 2016, fiscal year 2017. If we if we didn't make those PFD cuts, this is the effect of of of the change in real income that would have had. And as you can see, the blue line, which is the lowest 20%, would have had would have had an increase in real income. And what's what's happened over this period of time is that the PFD would have gotten larger and larger and larger as the permanent fund earnings grew and grew and grew. Um, and the the low 20 per low 20 percent as a per as a share of their income would have had income growth along with everybody, along with everybody else uh through this period. There would have been no one by the end of by by 2023, there would have been no one in Alaska who had an income decline, everybody would have had a real income decline, everybody would have had a real income increase. One of the biggest proponents for using PFD cuts as the revenue source is personally. And so you you you've got it, you you you you've got the understanding, he's got the understanding that we've gone into a a K economy. We've gone into an economy where real incomes for a segment of the folks are in decline, while real incomes for a segment of the folks are advancing. And overall it looks sort of like average, overall it sort of looks like everybody's doing okay, but that's masking the the separation between the two. You've got, I mean, he's got that, he's got that issue, he's got that problem. He understands that he understands that problem. But then he doesn't he doesn't look for the solution to that and what's causing that. And you can see from this chart in particular, you can see that a real cause of that is the is the PFD cuts. Now, this problem, this chart probably overstates the effect of reversing the PFD cuts on low-income and and lower middle income families. The reason is not everybody in Alaska. This this chart assumes that PFDs would have gone to everybody, every household in Alaska, and PFDs don't go to every household in Alaska. Out of the 750,000 people we've got in the state, only 640,000 receive PFDs because the others don't uh don't qualify. This assumes that this assumes essentially that the PFDs would have gone to the full 750,000. So it probably overstates the effect. But directionally, it's correct. Directionally, it shows that the distribution of the PFD, continued distribution of the PFD would have moved everybody up, uh, everybody up. Um right beside floats all boats kind of thing. Right. Right. As opposed to as opposed to creating the uh uh the the K economy effect. So I you know, I I give credit to personally to to to frankly to finally signing on to the problem that we've got a K economy, that we're treating, that some income groups are doing better than than uh other income groups, and some incre income groups are falling further and further behind while some in group income groups are are advancing far and far ahead. But I I you know he's got a big negative mark because he's not reflect he's not acknowledging that we are artificially creating that income gap through using PFD cuts, the most regressive tax ever, uh, that we're using PFD cuts as a way of raising as a way of raising revenues in the state.
SPEAKER_00:Well, this is a I mean, Brad, this is a Juno bubble problem, right? I mean, they all talk about the problem, but they all refuse to look at the reasoning behind why we ended up with the problem. And and usually it has to do with their spending model or their lack of fiscal, their lack of fiscal certainty or uh any kind of long-termness. I mean, that's that's part of the problem. They can all see it. Oh, we've got this, we've got that, but none of them tie it back to their actions from 12 months, 24 months, 60 months before. They they just can't see that. They always, it's like again, it's the it's the crisis moment. It's the you know, running running back and forth from one side of the ship to the other, uh, you know, kind of thing. It's that same thing. That's part of the problem. None of them see their actions as being what is causing it.
SPEAKER_01:Yeah, and actually they see they see themselves as part of the solution in the sense that, oh, we will direct money, we will, we will direct money to child care, for example. That'll, you know, Julie Cologne. That will that will solve that will solve the issue. If we direct money to child care, that will help support lower income Alaska families, and that will help solve, that will help solve the problem. Or we'll we'll direct money in this way, or we'll direct money in that way. What they don't understand is that they're taking money out of people's pockets to do that, to redirect the money. And in taking money out of people's pockets, they're maybe making people poorer. And and they're in and in particular, they're making the lower half of the of the income brackets poorer. And so they're they're they they think they're doing good things because they're redirecting or well, they tell themselves they're doing good things because they're redirecting this money, and oh, that's supposed to help it. If we just do child care, if we just do this, or if we just do that, that will help, that will help the situation. If we spend more, so we have more government employees, if we spend more on schools, so we have you know construction jobs out in the bush, or we have more teachers out in the bush, that'll that'll make it better. But they're but they're making it worse. They're they're by taking people out of by taking money out of people's pockets, they're making it worse. They're making they're making that K-shape um uh uh economy when it doesn't need to be.
SPEAKER_00:Quick question before we run out of time here. Do you think he's gonna he's gonna see this? Do you think he's gonna hear what you're saying and and and and realize, oh, I've been calling for the wrong thing this whole time? I mean, is is this is anybody gonna notice that there is a cause to this effect?
SPEAKER_01:Yeah, I don't I don't know. I I I honestly don't know. I think Larry's so far down the road in terms of the government will solve the problem by taking your money and redirecting it in a better way. I think he's so far down that road that he's not gonna back up and say, wait, where's this money coming from? And and and what are we doing to the people that were that we're taking it out of their pockets? Uh I don't I don't think he'll back up and do that. But I but but legislators, when they go down to Juneau, they they they they should keep a focus on the fact that we've developed this, that we have artificially in Alaska, we've artificially developed this K-shaped economy by taking money out of the very out of the pockets of the very people that that can afford it least, that that that we're pushing them farther and farther down the the income brackets by by taking that money out of their pockets.
SPEAKER_00:Well, and unfortunately, reversing it would take power away from the same people that caused the problem in the first place, and they're never going to relinquish that kind of control. That's my problem here, Brad, is that you're making the a very valid point. This is the same point that we've been making for years, and yet who's hearing it? The handful of people, the few thousand people that may be affected by this show in the state of Alaska. Um, but definitely the powers that be aren't hearing it. Uh, I mean, again, you look at some of the commentary from some of these legislators at this joint war session in Fairbanks or at the press conference that they had last year. Uh, Lyman Hoffman, oh my god, we've just discovered we're in a crisis. Wait a second. You where have you been? I mean, where you know, and then you cry about it and yet you don't see that the things that you are doing is like you said, they see themselves as the the saviors. They're going to fix it. You created it. How are you going to fix it if you won't even acknowledge that you created it?
SPEAKER_01:Yeah. There's a lot of things to say about that, Michael. We have we have virtually no revenue experts in the legislature. We have we have 60. If you count the staff, we have 180 um uh spending experts. They all know where to spend it, they all know how to respond to constituents' push for spending. But we have virtually no revenue experts, people who understand the impact of taking revenue from in certain ways, um, and the exacerbating effect, exacerbating effect on the K K economy that taking it through PFD cuts uh have. We have virtually no one who truly is trying to think through how do we support Alaskans best uh from a revenue side. If we need revenue, what's the best way to do it? What's the what's the what's the economically most efficient way to do it to uh to help support the Alaska economy and Alaska, Alaska households and Alaska families? We have no one who's who's really thinking through that. So it's all so what when you get down to Juno, everybody is, oh, I gotta spend more. I mean, they elected me to come down here and spend. That's what you know, that's what that's what I get to do. I get to appropriate. Um, and so you got 60 people down there who go, I can I know how to spend, you know, I can we ought to spend more on this, we ought to spend more on that. And compromise to them is spending on both. Maybe a little bit less than what they than what they wanted, they compromised, right? They reduce their, they reduce their ask down a little bit, but they spend on they spend on both because that's how you, that's that's what the that's what you're supposed to do as a legislator. And we got no one sitting down there going, wait, how do how we raise this revenue actually has a bigger impact on households than than how we spend it, because because spending it through you know through child care or through you know increased uh uh uh Medicaid, how you spend it uh impacts a few people in in the group, but it doesn't affect impact everybody. How if you take it as a revenue, if you take it from revenue and take it through PFD cuts, you're impacting every Alaska household out there out there. And we're not and and we don't really have anybody who sits down there and goes, from a revenue standpoint, it'd be better if we did it, if we did it that this way. I mean, there's a lot of problems down there, but that's one of them. Yeah.
SPEAKER_00:Well, it's uh it's problematic. I mean, I think Brian sums it up. We've got 80 billion in the bank and we're still broke. Um, and that's kind of, I mean, that's the same thing Joe Geldhoff said on the program yesterday with Donna Ardwin was that you know, structurally, the state's bankrupt. I mean, we've got all this money in the bank, but we, you know, structurally, we just keep spending ourselves into oblivion. And uh, and and that's why there's this desperation right now, of course, to combine the funds because that's the final, that's the last gasp. That's the final pot of money that's available for them to really draw from with any deep, meaningful way. And so that's why there's this desperation to combine those funds so they can bypass the constitutional protections, because then they can just keep going until they retire and then it's somebody else's problem.
SPEAKER_01:Yeah, certainly, certainly is. I mean, it's it's just the latest, it's the next step in the let's drain the SBR because things will get better. Let's drain the CBR because things will get better, let's drain the PFDs because things will get better. Um, and and now it's oh shit, we've gone through all we've gone through all of those, and now and now we got we're out of options. Oh, well, wait, wait, we can we can tap into the back end of we can tap into the corpus of the permanent fund, even if the permanent fund corporation isn't producing earnings sufficient to to pay for the draws, we can tap into the back end of the permanent fund if we can just consolidate these two accounts together and we can keep the party going for uh a few more years. And it's just um it is. I mean, it's it's it's it's a continuation of that. And it's it's a continuation of that, you know, the way to raise revenue is to raise it in a way that no one has to pay it. Yeah. Other than middle and lower income Alaska families through PF cuts.
SPEAKER_00:But who don't have a voice, who really don't have much of a voice uh in the donor class or anything else. That's what it is. All right, you also you've also got your one explicative out of the way for the day. So because I did.
SPEAKER_01:It was it was in the middle. I but you noticed it.
SPEAKER_00:I know you as long as you were in as long as you were did this on purpose. I'm just I'm all okay. I know we get all wrapped up about it, and I just uh don't want to do it. But it is it is an oh shit moment. I mean, there's no way there's no two ways about it. That's exactly like uh and now you can see the look on legislators' faces when they're realizing, man, we might have uh we've got a problem. But forget about yeah.
SPEAKER_01:But even now they continue spending. I mean, the the problem to them is we're not spending it in the right way. Yeah, problem to them is we gotta find we gotta figure out better ways to spend it as opposed to wait, there there is no revenue. You know, you gotta look at more efficient ways to raise the res revenue.
SPEAKER_00:Brad was just saying something in the during the break that I thought was hysterical. You know, it's like they they just they they don't get they don't get it. They they just don't get it in the end. It's like we just didn't spend the money correctly, right? That was the answer, Brad. Is that you know we just didn't spend it right, but now we're gonna spend it right. It's like communism has never worked because communism has never been done just correctly. I mean, we've got dozens of examples of it failing miserably, but it's only has it's only failed because it hasn't been done right. And that's where we're at with the state budget, right? We we've only we're only spent if I'm gonna spend it correctly. All the other guys ahead of me, you know, the five years that I did before this, I just was doing it wrong. Now I'm gonna do it right.
SPEAKER_01:Yeah, exactly. Yeah, exactly. I mean, it's it's we got we people get you know elected or they they they get hearing spots down before the down before the legislature when they talk about, oh, we need to spend it in this direction. Child care is my latest example, and but it's a big it's a big example. We need to, we need, we just need to spend it here and everything will be better. Uh or we need to do you need we need to do schools better. We need to spend more on schools in this way, and everything, everything will be better. All the while, all the while take taking the revenues out of the very people who are being hurt merse here hurt most hurt most.
SPEAKER_00:Yeah, don't worry. Define benefits, we'll do it right this time. Right, okay, you know, they'll see it. All right, number three. Sorry, uh, got a little sidetracked there. Number three, there's no there, there click bishop on on parade. What what give me the give me the rundown here?
SPEAKER_01:Well, I was reading, I was doing good doing my review of papers, and there was an article in the Ketchikan Daily News, uh, which actually has some really good news, um, uh and some good editorial pieces sometimes. Um, and there was Click had made an appearance down in Southeast, down in Ketchikan, and this article captures what uh what click uh what Click was saying down there, and it says uh Uh there's a piece of it that says, looking at what Bishop would hope to accomplish as governor, he has four top planks. All right. We've spent most of this program talking about fiscal issues, right? That that that that the core problem is we don't have any money and we're raising the money we do have wrong. Um we're raising it in a way that exacerbates the K economy as opposed to, you know, tries to be supportive of all Alaska households. Don't we're spending we we're trying to spend too much and we don't have enough money. That that's the core issue facing the state. That's the issue that everything else spends off on. So click has four top planks. None of them, none of them relate to fiscal policy. Here's the first is cheap energy. We need, when he says cheap, the candidate says that he is thinking reliable and affordable. We need more cheap energy. And the and the cheap energy he's he's talking about is hydropower, so he's really talking about Susitna going forward with Susitna spending a lot of state money on additional projects where the state bears the costs to reduce the delivered cost of energy to uh to uh to consumers. Um, and that's you know, that's his number, that's his top priority. Let's see. Uh the second target, second, bishop talked about appropriate education funding and workforce development. He would like to expand and grow the career and technical education in the state while giving school districts and teachers what they need to properly educate young Alaskans sufficient funding, equipment, and supplies. Spending. So, so the first priority is spending, state spending, focused on energy. Second priority is state spending, focused on uh appropriate education funding. The third target target for uh the candidate would be the Arctic. We are we are the Arctic nation, he said, acknowledging that he is only beginning to explore potential policy regarding the Arctic. While mentioning the Arctic and Arctic icebreakers, Bishop brought up the Arctic, the Alaska Marine Highway System, which is not in the Arctic. But nonetheless, the third the third topic is the Arctic. Okay, we're an Arctic nation, we are. But what does that mean in terms of policy? Well, I'm gonna think about that, is basically right is basic is basically, but it's an important plank, it's one of the four important planks.
SPEAKER_00:And he said he said supporting that. He said that would be costly, he acknowledged, but you've got you've got to realize the amount of money that you lost without a stable highway system. I mean, the we're gonna spend money to make money.
SPEAKER_01:Yep, exactly. And the fourth, and and we're gonna spend it in the Arctic because because that's big. That's part of my that's one of my four planks. And the fourth plank is improving fisheries throughout the state. Okay, I gotta admit, improving fisheries is important. We've got a problem in the in the fishing economy, and we've got a problem in a number uh in from a number of respects in the fishing economy, and that's an important thing to do in the state, and it probably does deserve to be in the four planks. But fiscal policy certainly deserves to be one of those planks. Certainly you look, you're I'm looking, other people are looking for candidates on what their solutions are to the to the fiscal situation the state's gotten into. And click doesn't think it's important enough even to be elevated to one of his one of his four planks. So it's um, you know, there's no there there. I mean, you got a candidate who's running, who's got endorsements, who's got a background, who's got a campaign staff, who's out there running, but there's no there there when you when you look at his when you look at his uh at his platform and you will look and when you look at what he uh what he thinks are the uh important issues facing the state. They're they're not addressing the critical issues that are that are facing facing the state. So, you know, this may this may become our series of of disqualifying candidates. We may go one by one through and say say there's no reason to follow this candidate anymore.
SPEAKER_00:No, it's the same thing that we were just talking about. This is a guy who's been on Senate finance forever. I mean, again, cause and effect, not realizing cause and effect. I mean, he and he has no fiscal plan, never had a fiscal plan when he was on Senate finance either. So, I mean, this is the same kind of thing we're talking about here.
SPEAKER_01:Yeah, it's it's I mean, how do I spend money? I spend money through state subsidizing energy, through the state creating new energy by hydro projects and other projects. I spend state money to do that. I spend state money on on education because that's my that's my second most important blank. The Arctic. The Arctic's important. Don't know why it's important. Don't know, but we're we are an Arctic nation. And and so that's important. And so we probably have to spend a lot of money on that somehow. Um, we certainly do on the marine highway. We have to spend more money there. And the fourth is fisheries. And again, I acknowledge fisheries is important. We need to get we need to get our our arms around that, but that's not that's that's that's not the overriding thing facing state government.
SPEAKER_00:And even he he even turned the fisheries issue into a spending issue because he said, I put in genetic testing last year in the Senate finance, and the governor vetoed it. So again, it's all about spending and funding. And that, I mean, that's what it's all about. That's the whole his whole campaign is about spend, spend, spend a chicken in every pot, a moose in every oven, and there you go. No idea how to pay for any of it. Timothy drops the perfect quote into the chat room based on everything that we just said. Nothing will be fixed, and here's the reason why government is the great fiction through which everybody endeavors to live at the expense of everybody else. And that's a Frederick Bastiat quote. And uh, I mean, that's the perfect example. That's what we saw in that whole article in Fairbanks. They want to live at the expense, the state has to pay for it. It's not our we want it, but the state should pay for it. The state wants it, well, we want it, but the feds should pay for it. The feds, we want it, and we'll just borrow a bunch of money to pay for it, right? I mean, that's that's you know, it's it's somebody else will pay for it. The future generations will pay for it. We are living in those, you know, Orwellian, dystopian type of times right now, because nobody's willing to take the bull by the horns and say, we've got to get a handle on this at any level, Brad.
SPEAKER_01:Yeah, no, that's exactly that's exactly right, Michael. And and and it's not only it's not only that. I mean, the the the really bizarre thing out of this is we recognize we're we're living in times where there are people where there is a there there, yeah, we have a K-shaped economy where we've got a bracket of people who are not doing, we're not, they're not even not even stay staying at even. They're dropping over the course of the last 13 years. We've seen lower income families, low, low and low, middle, and lower income Alaska families drop below 100%, drop below the standard they were they had in 2010. We recognize that, but but something you know, something stops us from recognizing why that is, from recognizing that it's the way, you know, at least in Alaska, it's the way in which we're taking revenue, it's the way in which we're developing revenue. And it's um it's just I mean, it's frustrating to to see people think think think through issues halfway and then stop and then sort of like, you know what, what what bird is it that uh that the I I can't remember the the bird, but the bird that that really just sort of doesn't develop its own nest, just keeps borrowing other people's other birds' oh nests.
SPEAKER_00:Yeah, I don't remember. I know what you're talking about, but I don't recall either.
SPEAKER_01:But yeah, yeah, it but but you know it's it's we we don't have people understanding that that the revenue side, the way in which we've constructed the revenue side, uh is a big part uh of the problem of what we've done to this economy. They they just they stop halfway through and say, well, there's a problem, and and it's government that that needs to solve it. Okay, you're almost there. Think through how government is is making this problem worse and how we could how we could solve it. Then they but then they stop there and we need to spend more. We need to spend more in terms of you know, clickbishop, in terms of energy. We need to spend more in terms of in terms of case in terms of education. We need to spend more in terms of the Arctic. I mean, it's just the it's it's it's always you you always recognize a problem, but but they think the solution to the problem must be spending. We're just not spending it right, so we need to layer on additional spending to address address this problem. Yeah, we we need revenue experts that understand the impact of various revenue options on on households and on families, and understand where this revenue is cut and and why revenue, the revenue design, the revenue program that we have is making this problem worse. It's not spending that's the problem, it's the way in which we're deriving the revenue to fund the spending. Right.
SPEAKER_00:That that's that's the problem. I would still argue that spending is the problem because when you spend, this would all be solved if we just spent less than we take in. And unfortunately, we don't. So spending is the problem, but you're right. I mean, I I understand what you're saying in that regard. Uh, we have to understand where the revenue comes from, and you're making the problem worse in the way that you're spending, but ultimately the spending is the problem. We've got too much damn spending, the rent's too damn high, essentially. Uh, and we're spending too much of it, and nobody's willing. And again, this is at every level national, local, state level. We're just spending more money than we're taking in. And I mean, the the borough mayor in Fairbanks in that article lamenting the fact that they can't that they can't uh uh tax people on the first hundred and fifty thousand dollar value of their home and the exemption, that they're losing out on a ton of money by not being able to do that. I mean, what? I mean, this is the it's it's nuts. This is what's going on today.
SPEAKER_01:Yeah. Well, it's I mean, it's it's how we've it's how we've sort of evolved, I guess. And the evolution is I want to spend on this, you want to spend on that, let's compromise, we'll both spend. We just won't spend quite as much as we as we as we did as we would have if we'd just been able to spend on this alone. I we're not we don't have we don't have uh economists thinking through these issues. We don't have people who are thinking about the full issue. They sort of get halfway through and they and you sort of like halfway building the nest and they just you know just stop and they don't think through the complete uh the complete issue and the and the implications of the way in which, in this case, the way in which they're in which they're raising the in which they're raising the revenue.
SPEAKER_00:Yeah. No, it's uh it's kind of crazy. And yeah, Grier Hopkins did basically say, because Brian just said, losing out. Is that what yeah, basically said losing out on you know that revenue that they could have gotten if they could just tax the people a little more on top of that. I mean, this is again, they'll spend every available it's Parkinson's principle for government. Uh government spending will expand to consume all available monies. And that's uh exactly what we've got right here. Uh, we got about uh 80 seconds here, Brad. Final thoughts. What are you looking at for next week? Give it to me real quick.
SPEAKER_01:Oh, well, the governor's the governor's budget will be next week, uh, or later this week, actually, either on Friday or or next Monday. Um, I'm not I don't have high hopes. I'm not holding out high hopes. He really hasn't done a whole lot of a lot of preparation that you would do if you were gonna have, you know, take some responsible uh uh revenue steps uh as part of the budget. Um so I'm sort of looking at a continuation of what we've done in the past, with the exception that oil prices are going down and so oil revenues are going down. So that's gonna be, you know, it's gonna be an even more when people talk about the deficits that that Dunley, how many years are at, are in the red out there in the future, we may add a couple more years to his to his tenure forecast that are that remain in the red.
SPEAKER_00:Yeah, even the legislators are realizing his his budget may be flat or less. So it's gonna be an interesting. This is gonna be an interesting session. Let's just put it that way. Brad Keithly, Alaskans for Sustainable Budgets, the weekly top three. Brad, thank you so much. As always, it's great to hear from you.
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.
