The Weekly Top 3 (4.13.2026)

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 April 13, 2026.

This week, our top 3 issues are these: 1) we explain why the way the legislative R’s are handling the PFD debate is a certain loser, and consider whether that is, in fact, their goal (2:10), 2) we explain why we believe SJR 29, the proposed Constitutional amendment to establish a constitutionally dedicated education fund, will create a giant sucking sound within the Alaska budget if enacted(19:52), and 3) we examine who exactly it is the Legislature is trying to protect from paying taxes (39:47).

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.

Transcript

Welcome And The Top Three

SPEAKER_01 0:09

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 April 13th, 2026. 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 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 explain why the way the legislative Rs are handling the PFD debate is a certain loser and consider whether that is in fact their goal. Second, we explain why we believe SJR 29, the proposed constitutional amendment to establish a constitutionally dedicated education fund, will create a giant sucking sound within the Alaska budget. And third, we examine who exactly it is the legislature is trying to protect from paying taxes. And now, let's join Michael.

SPEAKER_00 2:10

Brad, the the closer we get to the end of the session, the le the less hope I have that we're actually going to try and write this train. It just seems to be the same day, no different day, same song, right? Over and over and over again. So let's let's jump into it with the the big three things that you've got. We're going to start off today with uh with the way that the legislative ours are handling the PFD debate is certainly going to be a loser. And and you're asking, maybe that's the goal of this whole thing? I really, I mean, that seems a little cynical even for you.

Why Cuts Alone Never Work

SPEAKER_01 2:47

Well, I'm I I got cynical. I listened to the I listened to the right. I listened to the PFD debates uh um in House Finance, I listened to them on the floor, I listened to the the debate of the general budget on the floor, and yeah, that that'll that'll make somebody cynical. Here, here's here's the deal that that really motivates me toward the the question of are they really trying? Are the legislative ours really trying? We have let's start, let's start from a couple of facts. The basic fact is we're facing a$1.5 billion deficit. Annual deficit. That's that's just a basic fact. It's a little bit more on day when oil on days when oil prices are down, it's a little bit less, on days when oil prices are higher. But over the next 10 years or so, we're facing an average$1.5 billion annual deficit. That's that's sort of the baseline. That's the starting point. All right. So how do you deal with that? How do you how do you and and that baseline reflects a statutory PFD? That's the baseline after a portion of the revenues from the POMB draw, the portion of the PM P portion of the revenues from the POMB draw that are statutorily designated for the PFD. That's the that's the the deficit after those revenues are are distributed, would be distributed as PFDs. So that's that's what we're facing. How do you and and the question is to save the PFD, you've got to solve the question of what you do with the one uh of how you satisfy the$1.5 billion deficit. If you can't satisfy the$1.5 billion deficit, it's just too easy. It's been too easy for the legislature to go take or tax or divert or withhold or whatever phrase you want to use, a portion of the PFD to come back and solve the deficit. So you've got to solve to save the PFD, you've got to solve the$1.5 billion deficit. The Republicans and and the and they're and and and on in both the committee and on the floor, the Republicans said they wanted to save the PFD. So, all right, you want to save the PFD, you've got to solve the$1.5 billion question. They a portion of it was through was through cuts. And you got to give the Republicans some credit on this. They did propose a number of cuts. Steve St. Clair, in a Facebook post, sort of summarizing the the these these the session this past couple of weeks, said the Republicans proposed$300 million in cuts. All right, let's let's give them the$300 million in cuts. Now, some of those, to be honest, some of those were not actual cuts. Jason uh Reffridge, Representative Reffridge came up with a bunch of proposals for cuts, but they didn't cut spending. He wanted to divert the money. He wanted to take the money and divert it over to other spending, spending that benefited the peninsula or benefited other programs in the state. He didn't really cut, wasn't really a cut. I mean, it's counted as a cut when the Republicans total the numbers, but it's just it was really just a diversion. But anyway, let's take 300 million. All right, that's 300 million. That's 20. That's only 20 of the 1.5 billion. You got to solve the other to have a statutory PFD, you got to solve the other 80%, the other 1.2 billion. It's doable. Here's how you do it. The governor's proposed sales tax, which he had with a spending cap. Let's not forget that. So let's not, you know, everybody get triggered by saying, oh my God, taxes. It's taxes with a spending cap. The governor's proposed spending tax or spending uh the governor's proposed sales tax was 700 million plus or minus. So 700 plus 300 million is a billion. You're you're two-thirds of the way there. Oil taxes cover the remainder. Oil taxes get you between 400 and 500 million, maybe 600 million if you go solve the Hill Corp problem, the Hill Corp uh uh loophole at the same time. Oil taxes get you the rest of the way. That's actually a solution. Cuts plus Governor Dunleavy's. Governor Dunleavy's not some Democrat, not Bill Walker, not you know anybody else out there, Governor Mike Dunleevy. Governor Mike Dunleevy's sales tax, proposed sales tax at 700 million and oil tax and oil tax reform needed, necessary, constitutionally required, oil tax reform get you the other 5 million, get you uh 1.5 billion. Did any of the Republicans, any of the Republicans, put that out there? Keep it in mind, it's their governor, excuse me, the Republican governor that proposed the the spending capped sales tax. Did any of the Republicans put that out there? No, they just wanted to talk, they just talked about cuts, they talked about 20% of the problem. And as I said, some of them didn't even talk about that, they just talked about diverting a portion of the spending to something else. So there wasn't a solution, they didn't have a solution to the$1.5 billion question. The solution's there. Their own governor put the tools out there to do it, but none of them talked about it. So the question is, do they really want to solve this problem? And I gotta tell you, I'm I'm beginning to think the answer is no. I think they want to talk about it, I think they want to have it out there as a problem that they can, you know, write Facebook posts or Alaska Watchman blog editorials or you know, Substack pages, or I think they want it out there to have it to talk about and to complain about and to say, oh, we tried, but I don't think they really want to solve it. Because to solve it, you've got to solve the$1.5 billion question. It's not a$300 million question, it's not a billion dollar question, it's a$1.5 billion question. And to solve it, you've got to solve the$1.5 billion uh uh equation. And they're and they're not and they're not doing it. So I I I am increasingly thinking that nobody wants to solve this. Now the majority doesn't want to solve it. They're perfectly happy taking money away from middle and lower income Alaska families. The Republicans claim they do want to solve it, but that but none of them, none, zero, none, put forward a solution that solved the$1.5 billion problem.

A Three Part Fiscal Plan

SPEAKER_00 9:29

So I and again, yeah, and the$1.5 billion problem, as Brad said earlier, just to reiterate, it includes a statutory PFD. That's the problem that we're at right now. And Brad, I I I'm oft reminded of the old Einstein quote of uh, you know, the the doing something over and over and again and expecting different results is the definition of insanity. And we keep talking about cuts, and we've gone for the cuts only approach for two and a half decades, right? I mean, with people I've been crying about cutting the government uh for for those same 25 years, and yet now we've reached the point to where I mean it was Iris Samuels in the uh uh in the uh uh of ADN. Yeah, the ADN, where she goes on and on about how to cut government spending sufficiently to avoid a statutory dividend without drawing from savings, we'd need to eliminate all road maintenance, all troopers, all courts, all prosecutors, prisons, jails, universities. It would be, I mean, that's that's the point to where we've we've gotten because we've never taken that seriously. There is no political will to cut. I mean, they attempted to cut 54 million, was it for 54? Where's the where's the thing here? 154. No, no, this was just just recently they wanted to cut um 41 million dollars for unfunded, excuse me, for funded but not filled positions. Again, it was 545 positions that they wanted to cut that had been unfilled. And um no, they couldn't do that. They couldn't, Will Stapp has been talking about that program for the last five years that he's been trying to get cut that has serves no one, has no constituents attached to it, it's just there, cost 50,000, 60,000 bucks a year, and they still said no to that. I mean, it just there is no political will to cut what's going on.

SPEAKER_01 11:20

Yeah, but even if, Michael, I guess my point is even if there were a will to cut, even if every amendment the Republicans put out there to cut uh was passed, was adopted, even if they even even if everybody agreed to all of that, that's still only 20% toward this toward the solution. And that's and that's the situation we've gotten into. You know, some people say, well, spending the problem is spending's gotten away from us. Well, spending's only part of the problem. Oil revenues have fallen dramatically over the last uh couple of decades. And and so you've gotten this gap that's been created by increased spending, granted, that's a problem, but declining revenues, and that is that is the the gap that we're facing. And to to have a statutory PFD, to have a full PFD, you've got to close that gap. That I what what really I mean, their own party, their own party leader, Governor Dunleevy, put this put a big part of the solution out there. And he put it out there with the spending cap. I mean, don't let's not let's not go off on this, oh Keithley just wants to raise taxes, he just wants to raise revenues, he just wants to raise spending. No, that wasn't part of it. Part of part of Dunleavy's proposal was a spending cap. And yeah, maybe the Democrats wouldn't agree to that, but at least you can put it on the floor. At least you can say, I'm trying to solve the problem, I'm trying to maintain the PFD, I'm trying to avoid taxing middle and lower income Alaska families. And this is the this is the way we do it. And it's got to have a spending cap as a part of it, but this is the way we do it. And there, and the Republicans just aren't putting it out there. Neither is the majority. I'm not I'm not saying there's anybody out there that's that's doing doing the right job, right? But the Republicans who say they want to want to protect the PFD aren't doing it.

SPEAKER_00 13:13

Well, and that's what I mean, look, that's what Ben Carpenter did. He said we need a fiscal plan. His plan included the spending cap and everything else, all contingent. The tax was all contingent on making sure there was a spending cap and everything else, not to just increase government revenue, but to be able to shift the side so that it moved to the dividend. And he got crucified for it. I mean, so there's again, this all comes back to a question of do they really want to fix it? And I like you am coming to the conclusion that maybe they like their little sticky wicket. Maybe they like to be able to have that conversation. Not all of them, obviously, but maybe the majority, the vast majority of them are, oh yeah, what was the the the quote from Mike Cronk today that I read that I just it just blew me away? Across the aisle, Senate Minority Leader Mike Kronk said that the$3,800 PFD was unrealistic. I love the PFD. My constituents can use the PFD, but the reality, the reality is we have a big state and it does cost a lot to do what we do. Oh, come on, Mike. Really? Really? I love the we we we ran this state for so many years with a full PFD, and it wasn't until you got your hands on it that all of a sudden it became important to take that money for government spend. Again, is there really a political will to do that? Final thoughts, Brad.

SPEAKER_01 14:31

Well, and Kronk, I mean, Kronk, Kronk's sort of exhibit A of the Republicans who really don't want to answer it. They want to complain about it. Kronk says, Yeah, we got to pay for government. Well, there are there's more than one way to pay for government. One way is to divert and tax the PFD. Another way, a lower, a lower impact way, a much lower impact way, we'll talk about that in the third segment, is to have Governor Dunley dun Governor Dunley's sales tax or a flat tax with a with a PFD credit. There are ways to do that, to raise the same amount of money, to have the same amount of spending that Mike Cronk might might think is important. There's ways to do that that have a much lower impact on Alaska families, but a much lower impact on the average on the Alaska economy. But they don't want to talk about it. They just want to do the easy thing and take the PFD.

Why Politicians Prefer The Fight

SPEAKER_00 15:21

So your position again,$300,$300 million in cuts, real cuts, uh sales tax with a with a spending cap on top of it, and new oil production or new oil taxes, uh, an adjustment to the oil taxes could get us to the$1.5 billion deficit that we're talking about right here. Yep. Yep. That's that's it. Ken said something funny on. He said every cut they make means a person in an empty office loses their jobs. That's I mean, that's kind of right, right? I mean, that's where we're at. Again, they wanted a cut 540 position, couldn't even get that through. Uh, same thing happened last year. I mean, they last year they only they looked at positions that were vacant for more than a year, and they were like, oh no, no, no, we couldn't possibly, we couldn't possibly do that. It's it's uh again, Brad, they're they're unserious people. They're they are unserious about actually fixing the problem at this point.

SPEAKER_01 16:17

Yeah, and and and I guess my point is they're unserious on both sides. I mean, I I I I read all these, I read all these op-eds, I read all these columns that people write about. I'm for the PFD, I'm trying to save your PFD, I'm in there fighting for your no, you're not. You're in there writing an op-ed. I mean, there was one op-ed that goes that that is actually pretty good in terms of where the PFD comes from and how you set and and you know that revenue should never be on the table, but it's on the table, but but you know, the legislature can go get it. Pretty good op-ed. Didn't mention revenues once. So what they were really talking about was 20% of the problem. They weren't really talking about trying to solve the full problem, they were talking about trying to solve 20% of the problem.

SPEAKER_00 17:03

Well, isn't this the holistic argument that we talked about from the you know fiscal policy working group where they came together and they did say at the end, this has to be a holistic solution. It can't just be cuts, it can't just be taxes, it can't just be a full PFD, it can't just be new oil taxes, it has to be a holistic approach. And everybody's trying to take it in these little bite-sized chunks, which never go anywhere, because there'll always be some constituency that's against one aspect of the plan or another. It's got to be a full, full plan that had and it has to be embraced by more than just, you know, one guy, Ben Carpenter or somebody like that, that just gets hammered over it. Yep.

SPEAKER_01 17:42

But somebody has to somebody has to propose it. Ben Carpenter did got hammered over it. So yeah, there's a lesson. But but somebody, I mean, people have to propose it. We don't have any gubernatorial candidates. I mean, we were talking before the show that we don't have any gubernatorial candidates out there that are proposing this. I mean, right when you when you talk about do you see a solution out there someplace? Do you see people coming together to do it? We out of the what what do we have now? 19 gubernatorial candidates? I've lost track. Yeah, 19. 19. But out of the 19 gubernatorial candidates, we don't have one. We don't have one who's who's who's trying to you know bring it all together into the comprehensive solution. Even one of the co-chairs of the of the of the uh fiscal policy working group, uh Jonathan Christ-Tompkins, even one of the co-chairs isn't talking about one of the members, Shelly Hughes, isn't talking about it.

SPEAKER_00 18:37

I mean and none of them are articulating a full plan. It's always like one little tiny nugget. You know, Shelly's focused on her sunset committee, which is you know, a reduction in government spend through a sunset committee, which again is a great idea, but in and of itself, it doesn't fix anything. If it's if that's the standalone, that doesn't fix it, or it fixes a small minute portion of the problem. You know, the the people who are out there talking about resource development will pull us out of the hole. No, it's not.

SPEAKER_01 19:06

Are you uh what? I mean, are you what? Yeah. The way the way that the way the tax code works currently, resource development actually loses us money because it creates more credits that uh the producers can on the oil side creates more credits that producers can use to lower their lower their tax obligation.

SJR 29 Enters On Rocket Docket

SPEAKER_00 19:25

Yeah. It's um it's what I mean. I mean, I'm just I'm I'm blown away. Again, I think that there are good people in the legislature. They're just basically being overwhelmed by all the people who just want the problems to continue because in a crisis and in a crisis moment and over a fight, they can get a lot of things done that they may not get done when things are more convivial, you know, or congenial, however you want to look at it. Um, it's a it's a whole different thing. All right. Uh continuing now, Brad Keefley, Alaskans for sustainable budgets and the weekly top three. Did you hear that? Did you hear that? That was the giant sucking sound from the House Finance Committee. That's what Brad was what, Brad? There's a giant suck. Everywhere it went. That was the sucking sound from House Finance. What are you talking about here? What's uh what are you thinking?

SPEAKER_01 20:16

I want to go back to something we discussed last week, and we haven't discussed it much because it's it's coming on in stealth mode. It's it's it's ripping through the legislature in stealth mode. Senate joint resolution 29, which is a proposed constitutional amendment, which would set up an education fund that that the legislature could then pour money into, was only proposed in the legislature on March 15th, I think, March 13th, somewhere in there. Um, it only had it was proposed by the Senate Finance Committee, so Senate Finance Committee proposed resolution. It was only heard in the Senate Finance Committee, it was only heard twice in the Senate Finance Committee, and then passed out of the Senate Finance Committee, went to the Senate floor, and passed the Senate floor by the required two-thirds uh to get a constitutional uh amendment going in the Senate. It's now been sent over to the House and it's only going to House Finance. It's only been referred to house finance. And the first hearing on it is today, this afternoon. Um this proposed constitutional amendment, there's a reason that they're trying to put it through in stealth mode. I think it's I think it's a huge, huge, huge issue, a huge problem that uh that that's being set up here. What it does, what it does is set up in the constitution, like the permanent fund, an education fund into which the legislature under the statute, under the constitutional provision, into which the legislature can throw any revenues it wants, any revenues it wants. Can even throw land into this fund. And then once it's in the fund, That's it. It's like the permanent fund, it is protected in this fund. The legislature can't come in and appropriate out of it except for education. So the so the only purpose of this fund is to set up education. So we talk about we talk a lot about you know that that that oil taxes ought to be reformed. Or we talk a lot, we talked about in the last segment, we talked about Governor Dunlevy's sales tax. What the legislature could do is say, oil tax reform, yeah, we like oil tax reform, or the Hill Corp loophole, yeah, we want to close the Hill Corp loophole. And the way we're gonna do it is we're gonna pass a tax that is dedicated to the education fund.

unknown 22:39

Right.

SPEAKER_01 22:39

And so what they're trying, what they would be trying to set up is education versus tax. And everybody likes education, right? So they would they they're trying to ease the ability to pass these taxes by saying that they're dedicated, constitutionally dedicated, for education. And they start pouring money into this fund. Well, some people say that's okay because the more you have for education, the more revenue you have for education, then then you've taken care of education and the rest of the budget, then you really only have to worry about the rest of the budget. But the problem is there's no limitation on spending the money that's going into this fund, into the education fund, only on the only on the spending on education that would otherwise occur. In other words, you could take the money in that fund and increase spending on education because you got the money dedicated to it, and the rest of the budget would be out there starving. You've got to say you when we talk about, when I talk about, you know, things like the sales tax or things like oil tax reform, I'm talking about something that would benefit all of the budget. And by benefiting all of the budget would benefit the PFD because you would have to rely less on PFD cuts. What this provision to do, what this constitutional provision to do would do, would be to allow you to take those revenues that were otherwise talking about to benefit all Alaskans, to benefit the entire budget, to free up the ability to rely less on PFD cuts. It would take those money, it would take that money, take those that those those new revenues, and dedicate it over to the education fund in a way that it wouldn't benefit the entire budget. It would be a benefit only to education. But wait, there's more. And let's say they they tried to, you know, say it was for the future. So it was just oil royalties from new production and dedicated to the fund. It wouldn't go to the general fund, it wouldn't, it wouldn't be done in a way that would benefit the PFD or would help solve the general deficit. It would be strictly for education. Or they could take even existing a portion of existing royalties, or they could take the lands that that that that are being leased, lands because they because they include that in the constitutional provision and dedicate and put those in the in the uh in the education fund.

SPEAKER_00 25:29

And who doesn't love education, right? I mean, that's the thing. That's the beauty of this, is that they put the shine on it that well, it's all about education. And that, of course, doesn't include the BSA or anything else. This is all additional new stuff. And who doesn't love education, Brad? Why do you hate children?

How A Dedicated Fund Starves Budget

SPEAKER_01 25:44

Yeah, so so it's it's a way of sneaking money out of the budget, out of out to support the full budget, sneaking that money out to support uh education only and to support increasing spending on education. Because once it's in the fund, it only can be spent on education. And so we got this money in the fund. Oh my gosh, we got to spend, you know, Johnny needs a new bicycle or or you know, we need a new playground someplace. Oh, we got this education fund. We can spend the money out of the education fund on that additional, uh, on that additional spending. There, there's just something, I mean, the Alaska, the Alaska Constitution has a very solid foundation in the anti-dedication clause. It's what it's what ultimately undid the PFD, right? It the anti-dedication clause says you cannot dedicate any revenue for a specific purpose. It's got to be up to every legislature and every governor to deal with the issues of the moment, to provide revenue for them to deal with issues of the moment. What this does, there's only one exception to that in the constitution, is the permanent fund, which says a portion of the revenues that come from royalty are dedicated to the permanent fund. And then the permanent fund corporation deals with those. But but what this would do is say you can dedicate not just, I mean, the the permanent fund says a quarter of the of the royalties. What this would do is this is open-ended. You can dedicate any revenues, existing, new, any lands to the education fund and tie it up, tie those funds up for education, take them off the books uh and tie them up for education. What you do is you leave the rest of the budget, potentially, what you do is you leave the rest of the budget starving. So that the only way you can deal with the rest of the budget, education is now funded, right? You know, we've put all these funds in there. Education is now funded. What you've left is the rest of the budget starving out there. And so the only way you can deal with the rest of the budget is either through cuts or through diverting the PFD. It's a setup that ultimately results in fully draining the PFD by taking the revenues that otherwise would help solve the PF PFD problem and put them into the education fund. The Alaska Constitution, as I said, the anti-dedication clause specifically says you're not supposed to be able to do this. This constitutional amendment would overturn that. But it not only would overturn that, it would also overturn Article 8, Section 2 of the Constitution, which is the provision that says oil revenues or revenues from the development of lands or the development of lands shall be for the maximum benefit of the people. That would no longer apply in the case of education. The legislature could say, yeah, oil revenues, new oil revenues, we're going to dedicate them to the fund. Even notwithstanding that the maximum benefit clause, maximum benefit of the people. And that's always been read in my experience, maximum benefit of all of the people, not just some of the people. Right, right, but all of the people. What this would say is, yeah, yeah, we know that clause is out there, but we're going to take any tax, any tax reform we do on oil taxes, any revenues we get from the LNG line, any revenues we get from new oil production, even revenues from old oil production, uh in terms of in terms of royalties, and we're going to put them in the education fund and dedicate dedicate those money strictly to education uh and not have them available to uh to solve the to solve the full budget. This this thing is on, I mean, in the in the legal legal business, we used to call you know cases that were moving fast rocket docket. They were on the rocket docket. They were acting like a rocket. This thing's on a rocket docket.

SPEAKER_00 29:23

I mean, it was introduced than 30 days ago. I mean, less than 30 days ago. It's already through the Senate, it's into the House, into its first reading, it's only got one committee. They're trying to get this thing out there so it's on the ballot this fall.

SPEAKER_01 29:36

It's a huge, huge, huge change to how we go about fiscal policy in this state by allowing the sequestration of monies that otherwise could be used to solve the whole budget problem, including the PFD, solve the whole budget problem, allowing the sequestration of those funds just to education. And once they're in there, once those funds are in there, you can't get them out. Once they're in there, they will be available only for education. No governor will, the governor won't have a veto power over it. The legislature won't be able to access them for other for other purposes. They'll only be in there for education. And as that funds fund builds, it will be a support system to growing education spending more and more and more and more. It to a constitutional amendment takes two-thirds. They got the two-thirds over in the Senate. It was 17-3, without, without much discussion at all.

unknown 30:32

Right.

SPEAKER_01 30:32

The question is over on the House, will there be discussion? And the question is, over on the House, you know, what's going to happen when they try to get it through house finance and when they try to get it on the floor. 14, it takes 14 legislators to stop this train, 14 in the House to vote against it and stop this train. Hopefully there's 14 there. Because if we don't all of the debate we've had, you know, in the first segment of the show, all the debate we've had over the years about the PFD, all the debate we've had about, you know, getting a new revenues, getting additional revenues to sort of spread the burden, spread the benefit across across the budget, start closing the budget gap. All of those discussions will go out the window because any legislature is going to be able to constitutionally dedicate revenues by majority vote. They're going to be able to constitutionally dedicate revenues to education by just a simple majority of putting it in this constitutionally dedicated fund. And once it's there, it'll be fully protected. So I it's an issue that I think we need to be talking about a lot in this state. It's a huge change to fiscal policy. It's a huge change to how we've thought about revenues. It's a huge change to how we thought about solving the budget problem.

SPEAKER_00 31:48

And there's a reason why they wanted to do it, reason why they wanted to do it now, uh, because again, and they were very clever about it. Again, because who doesn't love education? What legislator is gonna want to stand up on the floor and be accused of voting against education in an election year and come back to it and uh, you know, and and and be forced with that. So we're gonna have to have five, we're gonna have to have to find 14 spines in the House side of it and hope that they are able to hold back the tide. Because if this doesn't get in, because again, this is not this is outside of whatever the the the BSA, the education spend, all this other stuff. This is all outside of that. They got everything that they wanted, and then some. If this goes through, uh education won't be a two point, you know, two billion dollar spend. It'll be a 2.5 or 2.7 or$3 billion spend in just a few years because they're dedicating all this. And they're doing it this year, and they're doing it now, and they're fast tracking it because they know they can use it as an election issue against any legislator that would say, I voted against it because of, oh no, no, you voted against it because you hate education and you hate children. That's what it's going to come down to. Final thoughts, Brad.

Election Year Pressure And 14 Votes

SPEAKER_01 32:58

Well, it's a it's a provision that I think is uh just will remake the whole the whole fiscal discussion in the state. It will create, it will allow education to become a super industry. It will allow it to sort of to sort of go off on its own, keep filling itself and and and uh and and grow into a much bigger thing than it is than it is even now. And it it will it will be the giant sucking sound. I mean, what I mean by the sucking sound, you'll be sucking the support out of solving the rest of the budget. Every tax that they consider, every reform they consider will be to divert money to the to the education fund. They'll see that as the way of selling it. And solving the rest of the budget issue will be left to PFD cuts.

SPEAKER_00 33:46

Yeah. Well, this is a definite win for the education industrial complex here in the state of Alaska. If they get this through, they will have all the money that they want or can get all the money that they want, which will we know will be a never-ending increase, is what will happen. Frank, I think you're missing the point. Frank keeps going on and on about uh the does not he Brad does not know the repercussions of giving land to the university. He's not talking about the university. He's not talking about the land grant college. He's talking about them encumbering lands into this educational fund, which has nothing to do necessarily with the university per se. This is all about other things. This is not about Brad is not poo-pooing, I don't think, the land grant status of the college. He's talking about encumbering everything under the sun into this fund and not being able to touch it. Am I right, Brad? No, exactly. You're right, Michael.

SPEAKER_01 34:34

I mean, the land grant, the the dedications of the land to the to the university is done. That's off to the side. We're not talking about undoing those or redoing those or adding to those. This is all into the separate fund. This is all into the new education fund. And it would be new dedications of land. It would be dedications of additional land. So for example, um uh one of the candidates for governor wants to raise revenue, thinks he wants thinks he can raise revenue through sales of land. Well, the legislature could say, well, we're gonna put this land that he wants to sell into the education fund so that all of the revenues raised from the sale of this from the sale of this land would go to the education fund and be and be earmarked forever with a simple education.

SPEAKER_00 35:20

Right, with a simple majority vote. This is not even, I mean, this is not like a super vote or anything. I mean, once this fund is established, it just takes a super majority vote to put the money. And once it's in there, it's in there. You can't get it back out. That's the problem. Um, and that is the, you know, and that is the that is the challenge here, uh for sure. Uh Corey says, yes, let's continue to enable school districts to not be held accountable. Sounds like our government. I mean, that's exactly it. We've already got school districts who are out there crying and and and weeping and wailing about their budgets, even though the budget, the the function of most of those is driven because of the lack of enrollment. That's really the biggest thing, and they're finally starting to say that. But, you know, if they got money into this fund, they could be funded to full whatever uh if it is, and and they could continue to put more and more revenue in there, and they never have to hold back their spending at that point.

SPEAKER_01 36:16

You know, I'm a little surprised, Michael, that the oil industry and the and the resource industry hasn't caught on to what's going on here. I mean, the whole reason they're doing this is because they're gonna they think it's gonna be easier to sell taxes. The legislature's legislators think it's gonna be easier to sell taxes if it's dedicated to the education fund. So they're increasing the ability to tax oil. I mean, I the first first layer of this is gonna be is going to be oil tax reform, right? We're gonna finally do oil tax reform, but it's not gonna be to the benefit of the of the general fund or to the benefit of the PFD by reducing polls on the PFD. It's gonna be dedicated to the to the education fund so that they can sell it easier, sell those taxes easier. If I were the oil industry, I'd be concerned about that. I mean, what they're setting up is a situation in which it's gonna be easier to tax the industry uh going forward by selling it as an education tax. There's there's lots of implications of creating this desdicated fund that people, I don't think people are thinking through. And certainly the fact that it started in March, the other it wasn't introduced until March, rocket docketed through uh through the Senate, and and now is is is on track to rocket docket through the House by not having multiple committee uh referrals. They're trying to set this up very, they're trying to set this up very quickly. Um and I and you know, I I think a lot of different industries, a lot of different interests ought to be thinking about this, not only from the perspective of, oh my God, we're gonna grow, you know, one segment of of government disproportionate to the other segments, we're gonna continue to grow it, but also from the standpoint, hey, they're gonna make taxes easier by saying it's dedicated to this fund, they're gonna be able to tax me more by by saying, oh, it's just for just for education.

SPEAKER_00 38:04

Right, right. No, they're already up in arms about the current discussion on taxes. What if they instead of just going to the general coffers, what if it was dedicated to a specific education fund? They'd look real bad, right, at that point if they tried to, oh, you know, you've got to stop this before it gets to that point. I mean, I hope I'm hopeful, but not optimistic, that there's 14 legislators in the House who will stand against this to say this doesn't make any sense. I mean, again, every one of those dollars should compete with every other one of those dollars. And uh, and because we've got plenty of needs in this state, if that's the case, it should not be set aside. But I guess we'll see.

SPEAKER_01 38:44

Well, and and it's and it's an easy argument, at least for at least I think it is. I mean, the constitution clearly says we don't dedicate funds, but it also says that the funds we raise from resource development, which is a lot of our funds anymore, the funds we raise from resource development ought to be for the maximum benefit of the people. And and now what we're gonna be saying is nope, it's not not any longer for the maximum benefit of the people, it's for the maximum benefit of this one particular industry. You know, education's important, but is it going to be important 20 years down the road, as important as other things 20 years down the road? Right. It's it it is we we need to think through the long-term implications of this and and the powers that be in the legislature are trying to prevent us from doing that by rocket docketing it through uh through both houses.

Who Benefits From No Tax Politics

SPEAKER_00 39:33

Well, we'll see where we go from here. It'll be interesting to watch. Uh, it's gonna be painful. Uh again, are there 14 souls on the House minority side who will stand on this? We don't know. We'll have to we'll have to see. The weekly top three continues. Brad's final thought for today, the final uh number three of the weekly top three. Whose economy is it exactly that we're protecting from taxes? Who whose economy is it, Brad? What are we talking about?

SPEAKER_01 40:04

You know, Michael, I I was listening this past week to some I was reading some news articles and I was listening the past week some blogs and or some podcasts and various things about people saying, you know, what we really want to protect Alaska against is taxes. The reason we have PFD cuts is so that we can protect Alaska and Alaskans against against taxes. And so that triggered me going into some into some numbers and really trying to think through exactly what it is, what it is we're talking about. The PFD is unique. Using PFD cuts to fund government is unique because the money comes entirely from Alaskans. PFDs paid only to Alaskans, and so the PFD cuts using PFD cuts is takes money only out of the pockets, out of the pockets only of Alaska families in order to fund government. Other revenue measures, equivalent revenue measures in terms of what they can raise, other revenue measures take money out of the pockets not only of Alaska families, but also non-residents, outsiders, people coming into the state. So when we talk about, when we talk about we want to protect people from taxes, who are we really protecting from taxes? We're protecting Alaskans in part, but we're protecting, we're protecting outsiders, non-residents, as well. We're we're we're setting up a situation in which they don't, unlike the other 49 states, they don't, outsiders don't have to contribute to the costs of state government. They are protected as well. And the numbers, the numbers to me are really, you know, sort of shocking in terms of terms of who's being protected by by this no taxes uh position many are taking. Looking at uh the numbers that have developed, been developed by the State Department of Labor in 2024, the last year for which numbers are available, 23% of Alaska workers came from outside, were non-residents. We're protecting, not only we're protecting Alaskans, the the 77% of Alaskans that are working, we're protecting 23% that are coming from the outside uh from taxes that would other that would otherwise uh affect wages. In the oil industry, this is really, these are really interesting numbers. In the oil industry, in the upstream part of the oil industry, eight forty, forty-one percent of the workers are non-residents in 2024, according to the Department of Labor Statistics. 41% were non-residents. Um, in the downstream part of the oil industry, the the pipeline and uh and the refineries, uh, 40% of the workforce was uh was non-resident. So this these are the people that that were protecting. We're shoving the entire burden, 100% of the burden off on Alaskans by using PFD cuts. No, no diffusion, no, no, uh no portion of it being being absorbed by non-residents. We're shoving 100% of it onto Alaskans in order to protect 40% of the oil workers uh from uh from facing uh from facing any consequences. The the um the uh Icer numbers uh also go to this. The ICER numbers that evidently nobody wants to talk about anymore, the ones that uh are from the study at the beginning of the year. Right. Um 76%, so 24% of sales taxes with less exclusions would would uh go to uh non residents. 26% of sales taxes with uh uh with larger exclusions, with more exclusions, would go to non residents. Non-residents. When you look at uh seasonal sales taxes, if you went to a seasonal sales tax system, up to 60, up to 31%, 40, 31% of the tax uh burden would go to non-residents. So instead, if by using sales taxes to raise the same amount of money, we're not trying to raise any more money, all subject to a spending cap, to raise the same amount of money using a sales tax, 31% of it would be borne by non-residents. Using PFD cuts, 100% of it is being borne by residents. So who is it exactly when Gary Stevens and others talk about we're going to save the economy from taxes? What they're really doing is they're saving some Alaskans, but they're saving a huge share of non-residents and non-resident industries like the oil industry or the fish industry or the tourism industry from bearing the burden of taxes.

SPEAKER_00 44:58

Aren't they also protecting a huge portion of the donor class, the large, you know, the upper 20%? Aren't they protecting them from uh from paying a larger share of the tax as well? I mean, people like Natasha von Imhoff, who make you know million, million and a half bucks a year, they don't, you know, if they had to pay a 2% tax, they, you know, they're protecting them as well. Uh, and again, they keep saying they're protecting us from the from ourselves. I mean, what we're protecting again, this all goes back to Alaskans are already paying a tax. And this is what Ben Carpenter and I were talking about last week. This difference between, you know, people who are conservative, smaller government, but anti-tax. I mean, those two things are almost dichotomous because if you just give them free reign to do whatever they want, government's gonna grow. Government's gonna grow. If you don't put some kind of restrictor on it, including restrictions because you can only raise so much tax, that's a that's the only otherwise, you're just gonna have larger government anyway.

Nonresident Numbers And Sales Tax Math

SPEAKER_01 45:56

Yeah. You what we've done by using PFD cuts is we've essentially given them a$2 billion pot of money, whatever the statutory PFD amount would be, a$2 billion pot of money to play with, to dip into whenever they think they need more money for whatever spending they're doing. It is, it is being treated as a slush fund, as a revenue slush fund, uh, to raise that money. No uh that people don't have to go on the record as voting for taxes. They could just dip into this pot and keep on going. Taxes not only would require legislators affirmatively to say, hey, we need more money and take it out of your pocket, as opposed to being able to do it in the dark through PFD cuts. Taxes would not only say we have to do it, but taxes would put a significant share of the burden, just like in the other 49 states, we're not trying to do anything different, would put a significant share of the burden on the backs of non-residents as well. They would help contribute to the cost of government. And by non-residents helping to contribute to the cost of government, we reduce the burden on residents. Let's let's take an example. Let's just take$100.$100 raised through, raised through PFD cuts. All of the burden of that$100 goes to goes on onto the backs of Alaska families. It's taken out of Alaska income. If we used a sales tax, a seasonal sales tax, if we used some other form, a big chunk of that burden would be taken off of the backs of Alaskans and would be filled by non-residents. So out of that hundred dollars, if you use the seasonal seasonal sales tax, out of that hundred dollars, Alaskans would know Alaskans would no longer have to provide$100. Alaskans would provide$69, and non-residents would provide the remaining$31.

SPEAKER_00 47:44

You're right. I mean, that's the thing. Where's the, you know, where's the where's the protection of all Alaska families? And why are we letting all the outside uh, you know, out of state workers, why are we letting and the tourists and all these other things that we could be capturing as far as revenue streams, uh, why aren't we, why are we avoiding that? Again, I think it comes back to we've become so tax averse in this state that uh even people who obstensibly want a smaller, more limited government are missing the game here, missing the whole ploy. The ploy is that by becoming and and and holding on to those tax aversion schemes, we're allowing government to grow at its own at whatever pace it wants at this point.

SPEAKER_01 48:27

By dipping into the PFD. Certainly so. And we're allowing it, I mean, the the point I'm trying to make in addition to that is we're allowing it to grow entirely on the backs of Alaska families. We're not getting any contribution toward the cost of unlike as occurs in the other 49 states, we're not getting any contribution toward the cost of government from non-residents from outside interests. And that, I mean, so we're saying in the$100 example, we're saying Alaskans, we're helping you. You have to bear the entire$100. And instead of saying, look, a portion of this, like hasn't happens in the other 49 states, a portion of this needs to be born by non-residents. And then, and then we will through that, we lessen the burden uh on Alaska families. It it's a when when Gary Stevens and others talked about we're trying to save Alaska from taxes, really, I mean, Alaskans already are paying taxes, we're already bearing the hundred dollars. Really, they're trying to save the non-residents. They're really representing the non-residents in their efforts to save them from bearing a portion of the burden. They don't mind burdening Alaskans, they're already burdening them to 100%. What they say is what they say when they say we don't want taxes is we don't want to put a portion of the burden on non-residents and reduce the burden on Alaska families. We want to continue to protect non-residents from having to contribute to uh to the cost of the state.

Final Warning On Education Fund

SPEAKER_00 49:59

And and the top 20%. I mean, I'm just gonna add that in there, and the top 20%. Uh, Corey says we should take a page from their book, just talk about how our children are paying taxes. I mean, she's not wrong. I mean, you know, the average family of four, you've got kids, uh, you've got, you know, a couple kids that are they're paying four thousand dollars a year in taxes right there by the taking of their PFD right out of the gate. I mean, we're already, we're already upside down. Uh again, until we start to address this holistically and take a look at all these things, uh, we're totally, we're, we're, you know, we got a legislature full of unserious people at this point, uh I think is the bottom line. Uh, two minutes, Brad. Give me your final thoughts here for today. Where are we, where, where, where are you at?

SPEAKER_01 50:42

Well, I want to go to back to S SJR29. I I I think this is I think this is a huge issue. I think, you know, five years from now, we will look back and we say, oh crap. Not only were we not solving the underlying problem by spreading the revenue burden to include non-residents, not only were we not solving the underlying problem, but but now we've created this monster where all of the new revenues and some of the existing revenues are being put into this education fund to grow the education industry um and starving the remainder uh of the uh uh of the of the of the state of the state budget. And it's in and we're and we're gonna be tilting the state toward this giant education industry that's gonna be adequately funded by dedicating all these funds into it. Um, and once the the funds are there, we're not gonna be able to use them for anything else. Um, and starving the rest of the state. And what's gonna happen as we starve the rest of the state? Well, we're gonna have to cut more and more and more of the PFD because we can't we can't go tap these funds. Yes, we passed taxes, but all those taxes are now dedicated to education. We can't tap them to help pay for corrections or the university or other things that are out there uh in need, and so we're gonna have to do more and more PFD cuts. This I think I think this is this is an issue equal to any of the any of the revenue issues. And it really concerns me that it's on this rocket docket and and people haven't thought through the consequences uh and are and are just gonna and just gonna vote for it uh because it says education somewhere on it. Right, exactly.

SPEAKER_00 52:18

It's for the children after all, Brad. Daryl says, I think that the sales tax would help shift some of the burden off Alaska residents. However, our wonderful state legislators would be happy not to give us back our PFD and collect the sales tax at the same time. That's why there has to be a spending cap uh attached to it. Rob says Hammond had a story in Bush Rat Governor about trying to put a fishing tax in Bristol Bay that would have been paid 97% by outsiders, but his voters turned it down. Again, uh, you know, this lack of again, this avoidance, this this tax avoidance. And Ben Carpenter finally says, I refuse to accept the notion that the comprehensive fiscal reform is not possible. It's only possible with leadership, and that is a commodity in the shortest supply in a lot. And I would agree with that, Brad. I think that's the problem, is we got the shortest leadership. Final thoughts.

SPEAKER_01 53:04

Well, uh SJR 14 is important. If any legislators are hearing out there that are listening to this, people that that that talk to legislators, get them to focus on on this proposal to create the edge of the constitutional education fund. It is it it is a problem, it is a it is an issue that's gonna show up as being a huge problem in the in future years. The only way to stop it, really, the only way to stop it is now, in the uh in the legislature, in the House. Right.

SPEAKER_00 53:34

Well, let's hope we can find 14 people with a spine. That's all we that's all we can ask for right now. Although I'm not, after having watched the minority for years and their actions on a lot of this stuff, I'm not I'm hopeful, but I'm not optimistic. I'm gonna put that on a t-shirt. Hopeful, but not optimistic at this point. All right. Um thank you, Brad. We appreciate you coming on board. Thanks for being part of it today and uh spinning us all up. I appreciate it.

SPEAKER_01 54:03

Thanks for having me.

Where To Find More Weekly Top Three

SPEAKER_00 54:04

I appreciate it, my friend.

SPEAKER_01 54:05

Well, that's a wrap for another week's edition of the weekly top three from Alaskans for Sustainable Budgets. Thank you for joining us. Remember that you can find past episodes on our YouTube, SoundCloud, Spotify, and Substack pages. And keep track of us during the week on Facebook and Twitter. This has been Brad Keithley, Managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week on the next edition of the weekly top three.