The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (6.1.2026)
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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 June 1, 2026.
This week, our top 3 issues are these: 1) we discuss yesterday’s filing deadline, who filed for office, who didn’t, and what the result means for Alaska’s future (2:15), 2) we review the significant insights we have gleaned from LegFin’s recent fiscal summaries of the FY26 and FY27 budgets (18:40), and 3) we discuss why justifying a property tax break for AKLNG based on how Louisiana and Texas approach their projects is nothing more than cherry-picking fiscal policy (37:14).
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.
Welcome And Weekly Top Three
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 June 1st, 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 project's page on national blog site, medium.com. You can find past episodes of the weekly top three also at the same locations. Keep in mind that in addition to these podcasts, during the week, you can also follow and participate in the discussion with us of these and other issues affecting Alaska's fiscal and economic condition by following us on the Alaskans for Sustainable Budgets Facebook page and through our posts on Twitter. This week, our top three issues are these. First, we discuss who filed for offers, who didn't, and what it means for Alaska's future. Second, we review the significant insights we have gleaned from the ledge finances' recent fiscal summaries for FY26 and FY27 budgets. And third, we discuss why justifying a property tax break for the AKLNG project, based on how Louisiana and Texas approach their projects is nothing more than cherry-picking fiscal policy. And now let's join Michael.
Filing Deadline And Governor Field
Brad Keith Lee, Alaskan's four sustainable budgets, comes in every week to hit us with a big three. And of course, the number one of this three is the candidates. Yesterday was the filing deadline. So Brad wants to talk about who filed, who didn't, and what does it mean? Double rainbow. What does it mean? What does it mean? So here we are. Hit me with it, Brad. What does it mean? So, Michael, we ended up with 20 candidates for governor, I think, 20 tickets for governor. There's some sorting left to do. There's like three weeks in which they can withdraw or reshuffle or you know replace uh components, including the governor candidate. I didn't realize that the lieutenant governor can stay the same, but they can replace the governor candidate. Um and so we so we're not quite there at the end though, but we've sort of got the preliminary outline of what we're dealing with. And I gotta say, it's hugely disappointing, hugely disappointing. There isn't one candidate that excites me. You know, in in 2018, there was there was Dunleavy. And in 2014, there were there were it was actually Walker at the time, um, before he went off his, before he went off the deep end. Um excited before he went off his meds and decided to jump in bed with everybody else. But but there was but there is no candidate out of the 20, there's no candidate that excite me, uh excites me. I was looking forward to frankly two of the candidates uh because they both served on the 2021 fiscal policy working group, and I thought, okay, you know, they're gonna they're gonna incorporate that work and they're gonna make it part of their platform, and we're actually gonna have a true total fiscal plan debate. Uh, but neither one, uh JKT, Jonathan Christ-Tompkins uh uh was one of the co-chairs of the fiscal policy working group. Shelley Hughes was on the fiscal policy working group. Neither one of those have incorporated the work of the fiscal policy working group um and are using that as a platform. Uh I I looked at JKT's uh JKT announced his running mate uh yesterday, and I think yesterday, Sunday, Sunday night, and and listed all of his positions, issued a press release that listed all of his positions. He didn't even mention the PFD. There were like 20, there were like 20, well, maybe 20 is just stuck in my mind. Maybe there were 15, 15 policy positions. None of them mentioned the the PFD. They were just a list of the various special interest groups, frankly, that he's appealing to. I'm gonna do education, I'm gonna do housing, I'm gonna do, I mean, it's just it went down the list of if I were putting a list of the 20 people most dependent or the 15 groups most dependent on state funding, it'd probably be that list. I mean, it's just it's just it's just it it's it's playing to the crowd that the usual Juno crowd. Shelley, I don't know. I mean, Shelly her initial announcement about fiscal plan were fiscal plans were very disappointing. They've got a little bit better since then, but still, uh still very disappointing. Uh Bernadette's out there, she's talking about full PFD, but she's got no plan for how to get there. I mean, that it's it's a repeat of Dunleavy's 2018 campaign uh of a full PFD. And and and I'm gonna do it by cutting, except the legislature is not gonna go along with me, and I can't even get my own party to back me up on it. So, you know, after 2019, Dunleavy was essentially done in terms in terms of the PFD. And that's very reminiscent of what Bernadette's doing. So you go through the list, I mean the list of 20, and there's just not any candidate in there that I think is speak speaking is is talking realistically about the the fiscal situation. You know, you you take away you take away Iran, you take away the Iran war, and we're in a world of hurt. Uh you you you you you take off that veneer of the high oil prices that are going on right now, and we're right back to the what led to the $1.6 billion deficit last year, the one point projected $1.9 billion deficit this year. Um, and and and that's where that's where we go. And so and so candidates need to be talking about that. They need to be articulating a plan for how to deal with that. But you know, out of the list of 20, they're not. Walker says he's going to. That'll be interesting. I mean, Walker says he's he's gonna talk about the hard truths, and he's gonna talk about the fiscal channel. I can't believe Walker had the cojones to jump back into this race after the drubbing and having to drop out last time. I mean, I just I can't I can't imagine. I mean, again, I just I don't even understand his thoughts on this, uh, wanting to jump into this race with such a crowded field and the fact that he's already been summarily dismissed uh in the past. Do you remember Harold Stassen? Are you old enough to remember Harold Stassen? The name is familiar, but I don't remember uh specifically. So Harold Stassen was a boy governor, elected at 32, got boy governor of Minnesota, and he thought he was on his way. Uh he ended up running for president nine times. He got he got defeated. His the high water mark was in 1948 in the Republican convention against Thomas Dewey. Um, and he got like the second or finished second or finished third, somewhere there. And but he kept running um because he was convinced that that was his destiny. He was he was destined to after he became governor at 32, he was destined to be. So I mean, this is only Walker's five time, fifth time. So we may have, we may have, he may have more, more any, but but it's I mean, it it's the belief that it's the belief that you know I'm destined to lead them out of the wilderness. And he says he's gonna talk about fiscal policy. So at least at least that may be interesting, but it's not anything. I mean, we've seen where that goes with Walker. It's not anything to have that's gonna have any credibility or any any belief system. It just may be just maybe an interesting discussion. I can't believe the one I can't believe is Liesl. That is the that is the one that really running as an independent, I'll have you know, not even as a Republican, as an independent, uh, with uh with Rexford, uh, her uh uh uh former uh staffer. It's yeah, I mean I I again she's been out of the loop for so long, but she's also kind of shown her true color since she left the legislature. Uh she had left under a cloud, the legislature, by the way, for most people don't remember, under you know, for potential misuse of funds and traveling on the state's dime to Europe and all kinds of crazy. I mean, it the whole thing is just uh some of these candidates, you just look at him and you go, why? Why do we have 20 candidates? Well, Nancy Dolstrom did drop out, she dropped out yesterday. So Nancy Dr Dolstrom at least could, I mean, I she wasn't really doing anything, so I don't know well, you know what difference it is, but yeah, with 18, 19 candidates now, I don't even know uh what's what's gonna happen. I remember Liesl for a different reason. You remember you remember Ron Duncan and GCI's push to kill the dividend? Well, Liesl was at the vanguard of that. In 2016, she proposed legislation that would have essentially swapped out the permanent fund earnings for oil royalties and would have based the her bill would have based PFDs going forward on oil royalties, um uh no lower than a thousand dollars per PFD, but oil royalties, and all the permanent fund earnings would have gone to the uh uh to to government. And that was, I mean, that was Ron Duncan's first bill. So I I yeah, all that other stuff about Liesell and drinking and you know, throwing water in the face of an airline attendant or whatever the heck she did. I mean, I all that stuff's to the I remember her for Yeah, true, true, that is true. She was in she was a huge proponent of SB26, the POMV draw, uh, as well. I still remember that there was that congratulatory uh victory lap selfie with her and Michiki, uh, and I think Mia Costello and one other person that they were just they were so proud that they had just changed us over to the POMV. Uh, and that of course was still the same year that none of them would stand up against Walker on the veto for the uh PFD as well. So it's uh yeah, it's a it's a crowded race. What do you I'm
Unopposed Seats And Weak Parties
sorry, go ahead. Well, as important, as important as the the surplus of people running for governor is we have a lot of people, we have a lot of seats where there aren't opponents. And I went through this morning. Steadman has no opponent, steadman's running for re-election, has no opponent. Tobin, Luki Tobin, who who is the uh the education uh uh front in the K-12 education lobby front in the legislature has no opponent. Willikowski has no opponent. Sarah Hannon, who may, who may, if I had a vote, would would would win the title of most arrogant legislator. Um she was the one who said who you recall saying free rides die hard when when they started cutting the PFD and transferring that money to the top 20 percent. Uh Sarah Hannon was was was right at the top of that. She has no opponent. Chuck Copp uh has no opponent. Uh uh Genevieve uh Mina has no opponent, and several more have only have only token opponents. I mean, uh LB Jackson Gray's opponent is a guy by the name of Nick Jane Danger. Great name, but but not much of a not much of a candidate. So I'm so it's not only how many we have running for governor, it's how few we have running for the legislature. And and you know, giving Steadman another four-year, another four-year uh uh tour with no with no opposition, no, no reason for him to have to go touch the flesh, no reason for him to have to go out and appeal to anybody to talk to anybody. Um uh it's just you know that that's that's sad in its as sad as as having 19, none of whom have a good fiscal policy, it's as it's as sad to have this cast of characters running with no opponents. Give me uh give me a uh give me a grade grade score on this overall election slate right now. What is this? Is this like a D minus or what? I mean, are we where are we at on this? I don't know how it gets, I don't know how it gets above an F. I mean I I don't I don't see I mean there's there's no vision for the future. I mean the current catchphrase is you build the line, and and all of them are gonna say that, but not but that doesn't solve, I mean, we'll talk about that in the third segment. That doesn't solve our fiscal issues. It it actually adds to them. Um, and so it's uh I mean we we've got we we've got none of them running on the issues that matter, none of them looking forward more than the end of the nose the end of the nose on their face, and and talking about you know what happens if when the Iran uh premium goes away. What happens uh if we actually build the line? Uh what happens what happens, you know, with with what's what's going on with uh with uh with oil taxes? Uh none of them. And so I don't I don't know how you get I don't know how I don't know how you get past an F. Um maybe a high F. F plus. I mean, is that really a thing at this point? You failed, but you failed on the plus side. What did somebody say here this morning that I wanted to show Brad because I thought it was perfect? Good morning, Brad for Governor. Oh man. Well, I your name did get used uh when Bernadette was on last week, and I don't know if you caught that interview, but uh she highlighted several of the things you were talking about and and high and said your name and said, like Brad's been talking about. So you are being quoted uh by some of these candidates. Yeah, it's it's selective quoting, though, right? I mean, Brad's been talking about the need to reform oil taxes. Did she say that? No. I mean, no. Oh, it was certain things, it was cherry picking for sure. She was talking about the the permanent fund corporation and the makeup of the board and the and the and the valuation, and and uh, but yeah, she didn't talk about Brad wanting to change the oil taxes, she didn't talk about Brad wanting to talk about what form of taxes we're gonna have to be facing. She didn't want no, didn't talk about that. Although it was a pretty good interview, I will say that it moved the needle a little bit for me. But again, we got 20 choices and none of them are fantastic. That's the worst part here. Michael, if if I'll say this about Bernadette. If Dunlevy hadn't run, if we hadn't gone through 2018 and 2019, the experience of 2018 and 2019, Bernadette would be Bernadette would be, you know, a an interesting candidate to think about, you know, getting seriously behind. But we did go through 2018 and 2019. We did go through Dunlevy trying to do try Dunley trying to cut the budget and not getting not even getting 16 of the of the of his fellow Republicans to back him up on the depth of cuts. 16 is important for those not five. 16 was the was the magic number to uphold the vetoes that he would have done to get the spending back down. Couldn't get 16, didn't do those vetoes. And we and and and that's just that's set the tone for the rest of the Dunleavy, you know, eight years of that failure in the spring of or in the spring December of 2019. If we hadn't had that, Bernadette might be fascinating. But we did have that. And and and and and that's where we're gonna go. I mean, especially if you get Stedman not with no opponent, Tobin with no opponent, Wilikowski with no opponent, Hannah with no opponent, cop with no opponent, and Mina with no opponent, and the rest have and and others having token opponents. Yeah, especially if that's where we're going in the legislature, Chuck Kop, I mean, my God. I know uh no opponent. If that's where we're going in the legislature, then then what it whatever Bernadette's saying about the budget is sort of irrelevant because you'll never get it through the legislature. Yeah. Um, the good news, and I agree with Rob, Rob Myers is in the chat room this morning. Walker, Maguire, and Click will pull votes from each other. And I do see that. I saw Walker pulling votes from Click and then McGuire. She'll be the doing the same, uh, which will neuter some of Click's kind of momentum in that in that regard. Um, but uh, I mean again, at this point, it's all races within races and fights within fights and who's gonna end up on top. Uh JKT, who's raised over a million bucks on his thing, he's having a hard time getting out of single digits on some of these polls. So I don't even know, I don't know where it goes, man. I just I don't even know where it goes. Um yeah, and too many and too much to focus on. That's part of the problem with ranked choice voting, is that it's just too many and too much to be able to really focus on. And you don't, and and what I'm increasingly realizing is you don't have the discipline of the parties, you don't have the the the candidate building function going on in the in the parties. I mean, Tobin should have an opponent, Willikowski should have an opponent, Hannon should have an opponent, Mina should have an opponent. Uh, but you don't see that candidate building function going on uh uh in the parties to to put a candidate up and at least have you know the party's platform out there for you know right the candidates and others. So ranked choice voting is turning this into a bunch of individualistic races, and I and I think that's that's part of the problem. Yeah, well, and where is the party, and and I'm gonna throw the Republican Party under the bus on this, where's the Republican Party on most of those seats that you just named? Most of those seats are Democratic seats. Why aren't you at least gathering up a token candidate? It's a ranked choice thing. You get at least, I mean, you could at least put them on the ballot, they'd make it through. Why where's the where's the where's the team? Where's the group? Where's your candidates? So it's a failure on multiple levels
Budget Summaries And Spending Jump
on that. Continuing now with Brad Keithley, Alaskan's four sustainable budgets. We're on to number two of the weekly top three. The Alaska Legislative Finances, the budget summary. It's just finally, I mean, it's been a week and a half, but it's finally coming out. What does the budget look like? And uh, where do we go from here? Brad, what what do you say here? Well, I I first of all, I think they got it out in sort of rocket rocket time. This budgets are not easy things to understand, especially as our legislature passes them. And um, and I and I've got to I've got to give credit to the legislative finance division, not only for getting the summary out so it's understandable, somewhat comprehendable, uh, but uh but also getting out uh fairly quickly. There's two charts in the latest newsletter uh from the legislative finance division. And for those of you who follow these things who don't follow the Legislative Finance Division's newsletter, you should. Uh you can get on a mailing list that will alert you when uh when it comes out. There's two charts in there that I think are just fascinating. Um you got those so you can bring them up, Michael? I do. Which one? Tall one or wide one? The wide one. The wide one first. So this chart is an evolution, shows the evolution of the FY26 budget. And what I want to focus on is the bottom part of it, which follows the appropriations. Now, the way legislative finance division does it because the way, because it's the way Bert does it, uh, is they incorporate the PFD in there, which which makes which makes it a little bit confusing to follow. But the PFD, if you if you look at the bottom and look at the total appropriations line, the PFD is the same in the enacted FY26 budget, in the FY26 uh management plan plus government supplementals, um, and in the FY26 management plan plus enrolled uh supplementals. So the PFD is the same. So it it's it those are the numbers the the UGF numbers X the PFD are are the are are relative uh relatively the same because the PFD is a constant through that. So look at this. The enacted FY26 budget, this is this is in an era where the only reason that Alaska looks good is because of the Iran War. The only reason Alaska fiscals look good is because of the Iran War. And that's going to go away at some point. Uh when you look at uh when you look at this budget, the enacted FY26 budget was $5.99 billion, $5. Well, roughly $6 billion. $6, $40 million of that, $650 million of that, $650, $680, $680 million of that was for the PFD. So you can subtract that to get the UB UGF number. But the enacted budget was $6 billion. The FY26 management plan, and this is this is essentially the enacted, the enacted budget, the management plan is the enacted budget plus uh uh uh the things that you expected to grow. So it's sort of it's sort of the FY26 budget, the enacted FY26 budget sort of matured. The act the enacted FY26 budget or the FY26 management plan plus the governor supplementals is $450 million. Higher. It's 6.4 billion compared to the 6 billion that was enacted in FY26. 450. That's the governor. That's just the governor. That's the governor's supplementals. Now, some of those supplementals were necessary, like fire, like the fire stuff, but but that what the governor, the governor is layering on $450 million on top, $460 million on top of the enacted FY26 budget. Then the final column is the FY26 management plan plus enrolled supplementals. So that's the final number after it came out of conference committee and passed the budget came out of conference committee, supplemental budget came out of conference committee and passed both bodies. It's it layers on the additional spending the the legislature added for supplementals on top of what the governor had already added in his supplemental. And that's $6.5 billion. We started out at six when we enact when they enacted the budget last year. We're ending up at $6.5, more than $500 million, almost a half of more than a half a billion dollars more in the in the final FY26 budget. You want to notice something else, two other things that are cool that are interesting about this. Look at the total appropriations number for the FY26 management plan plus enrolled supplemental, 6.5267. Look at total projected UGF revenue in the in the box above it, total projected UGF revenue uh in uh for the spring 26 revenue forecast, 6.5, 6.5267. They're spending it all. Right. And they're not and they're not even trying to hide it. I mean and that's at so you see those two asterisks in the in the bottom behind enrolled supplementals. Those two asterisks mean appropriations, so they've appropriated more in the event the FY26 revenues end up being more. They've appropriate appropriations could increase by an additional $228 million. So that half a billion dollars extra over over what was appropriated last year could increase to three-quarters of a billion dollars uh if the revenues, uh if the revenues are there. They spent it with an if in there. If there's more money, here's what we'll spend it on. They've already spent it. It's Parkinson's principle for government. It will expand to fill up every dollar, it will expand, the spending will expand to fill up every dollar available. And then some. I mean, that that's where we're at. Yep. All right, so let's let's go to the let's go to the tall, the the tall one here for a second.
FY27 Growth And PFD Shortfall
So this is the the FY27 uh budget. I gotta get my gotta go my bifocals here. Oh, there we go. Thank you. The FY the FY27 uh budget. You can see the FY26 budget at so the the look at the appropriations line. It says 6.397, but that doesn't count the transfers, the pre-transfer surplus that is then spent at the end. So it's the same 6.5267 uh uh spending in FY26 that we just that we just left. Look at the FY27 enrolled. This is the enrolled. This is this is before government government's uh before the governor's vetoes, if there are any, but it's also before next year's supplementals. So this is just this is sort of the beginning point for FY for FY27. It's up another, you can look, you can see this on the line over to the right, looking at appropriation. It's up another 4%. Uh the FY27 is up another 4% on top of the FY26 spend it all uh budget. 4%. And that even includes that 4% is after factoring in a reduction in the permanent fund. You know how everybody tells you, oh, we're getting the same permit fund this year as next year. We aren't. Yeah. No. Because again, and again, this is assuming that the Iranian bubble continues into next year. It's $264 million more than it was this year with all that money. Which and this year is $500 million more than it was the previous year. I mean, government the government spending isn't growing sort of at a steady pace. Inflation over these last few years has been 2.5%. Government government isn't growing at a steady pace to keep him to keep going in inflation. It's growing by leaps and bounds um uh between FY26, uh, but from FY26 to FY27. Uh, well, from from where FY26 began at the end of FY25, uh, from F from from there to where FY26 is ending to where they're now starting, starting. These are starting numbers to where FY27 uh is starting. And you know, you look so you look at FY27, you see that thing that says surplus down there at the bottom, the FY27 enrolled, you see a number down there, $40 million for surplus. All surplus is is excess PFD takes. I mean, they're they're they're cutting the PFD by $1.95 billion to get enough revenue to spend uh to spend this this this money. The $40 million is just, oh well, we took a little bit too much PFD, but we're not gonna give it back to you. I mean, we're not gonna include it in the PFD. We're just gonna we're just we're just gonna hold it in in an account we call surplus because boy, doesn't that make us look good? We didn't spend it all yet. Yeah, an 11% decrease to your permanent fund. Uh, and it's just gonna sit in the surplus fund. The capital budget number is interesting. Fiscal year 26 to 27, a 58% increase in the capital budget, which is still, by the way, I'm still waiting for the lawsuit. Somebody's gonna file a lawsuit because it's supposed to be one-third of the operating budget, is you know, the there's the capital budget supposed to match by what 30% of the uh operating budget, and that hasn't happened for years. Uh, so again, they've been, you know, ignoring maintenance, ignoring any kind of expenditures to build out infrastructure or do anything else. It's all about operating the state at this point. But yeah, I mean, here we are. Uh we're we're we're at uh you know billions of dollars. And again, these don't include the transfers into the that was it, it was eight billion dollars this year, folks. It was two billion dollars more than the previous year, and the hugest chunk of that 1.6 billion or whatever, went directly into the into the corpus of the fund. They didn't they didn't spend it, they didn't pay it out on dividends, they didn't do anything else. They're bolstering up the corpus of the fund again, um, and ignoring your PFD take on it. Brad, this is give me the give me the the long and the short of these two charts. What are your thoughts on? Well, the long and the short of it is Michael, the the the legislature, and and I guess maybe you know the the fact the Iran war produced more revenues and so we got to spend it all. Uh, but the legislature just went went out of control um uh in this session. They went out of control in terms of the spending they they layered on for the FY26 supplemental. Well, the governor, the governor and the legislature went out of control for the lay for the spending they layered on in the FY26 budget, the supplementals compared to where they started. And they're they're out of control in terms of the FY27 starting point. You got to keep in mind that that these budgets come in two pieces. One is the enacted at the end of the legislative, yeah, the enacted at the end of the legislative session, um, and then the or at the end of the governor's review of the legislative session, and then the supplemental. And the supplemental can be just as bulging as as as the budget itself in terms of in terms of increased spending. But this is this is what happened. I mean, we went from so where did we start? I don't have the other chart handy. Tell tell me where the starting point is on the other chart. The FY, yeah, thank you. The so the starting point, the enacted FY26 budget was $5.9 billion, right? Keep that in mind. Five, well, six billion dollars. All right, flip to the other chart real quick. Six billion dollars as the enacted, and now we're at six point six billion dollars um in appropriations uh in the uh in the FY27 in enrolled at the starting point of the of the FY27. So we're up you know six hundred million dollars, a 10% uh between the starting point of FY26 and the starting point now of FY of FY27. We got all that, and yet we don't have opponents for for Bert Steadman, the chair of Senate Finance, who's passed all this stuff. Luki Tolman, Bill Willakowski, Sarah Hannan, Chuck Kopp, the majority leader of the of the House Majority Bipartisan Coalition, and and Genevieve Mina. We we don't have opponents for those, notwithstanding the fact that we've increased the budget by by $600 million by 10% between the starting point for FY20, FY26 and now the starting point for FY27. It's just, I mean, we never get this under control. If if that's if that's the kind of practice that this legislature is going to undertake, we never get this under control. We're uh in the break with Brad Keithly, uh Alaskans for sustainable budgets. Let
The Fiscal Plan Candidates Avoid
me just go back to that uh previous comment because we ran out of time. So you you didn't say you I didn't hear you say no governor candidates should talk about the budget because it's irrelevant. Um, and uh she said perhaps the budget is irrelevant. I thought it was an interesting statement. What were you trying to say there, Brad? Because I I didn't hear that, but again, maybe uh maybe I'm just thinking of it from a different perspective. Maybe when it was talking, maybe when I was talking about Bernadette, and maybe it was, maybe it was that I don't put a lot of stock in what Bernadette's saying because she's saying she's just gonna cut the budget. But that's that's the way she's gonna deal with with the the fiscal situation the state's in. And and maybe I was saying that talking about cutting, maybe I said, maybe I said uh talking about just cutting the budget alone is sort of irrelevant because that's not gonna be that's not the solution. I that's that that's the closest that my brain comes to what to what Donna heard. Obviously, gubernatorial candidates should be talking about the budget because it's the one thing the governor really has control over in the beginning, right? I mean, that's that's kind of the point. Yeah, absolutely. I mean, absolutely. They should be talking about it's not it's not just the budget. They should be talking about a fiscal plan, right? They're gonna be they should be talking about not only about how we stop a 10% growth, year-on-year growth. I mean, that's what the FY, the beginning point from FY25 to FY26 is 10% year-on-year growth. Not only should they be talking about how we're gonna stop the growth, but recognizing we're not gonna stop all the growth, and we sure as heck aren't gonna go backwards. I mean, that that's that's the big lesson from 2019. Recognizing that we're not gonna stop any stop any growth and we're not gonna go backwards, how the heck are you gonna pay for it? How the heck are you gonna pay for that that level of spending? That's I mean, that's the fiscal plan. A, what are you gonna spend and how are you gonna stop spending so much? And B, um, uh, how are you gonna pay for whatever you're you're spending on? Because right now, I mean, we did this last week, but right now the FY26 budget is is paid for, uh, about a third of it, more than a third of it, is paid for with $1.6 billion, $1.6 plus some billion dollars in PFD cuts. The FY27 budget is paid for more than a third of it is paid for with uh $1.95 billion in PFD cuts. That's been the plan to take it out of the pockets of middle and lower income Alaska families. So yeah, with what I and I don't really care if governor candidates talk about anything else other than those two pieces. One, how are you gonna how are you gonna slow this spending down? And two, how are you gonna pay for whatever spending there is without taking it out of the pockets of middle and lower income Alaska families? Exclusively out of the pockets of middle and lower income Alaska families. And God forbid the bubble should pop between now and then, the Iranium bubble should pop between now and then, because I mean, you know, yeah, it's not likely, but I'm just saying, what if it does? Because we're betting on the if come at this point, right? I mean, who knows? It will pop. It will pop one of two ways. It will either pop because the war is settled and uh and supply starts, uh, we we start having supply again, or it will pop because prices will rise so high and we'll have demand destruction, what economists call demand destruction. Prices are too high, can't, can't, can't afford, can't economically run your factories, can't economically do this or that, and and oil demand comes down and prices come down because you don't because you don't have the demand you had uh that was that was that was elevating the price. Prices will come down. And we don't and we don't have any candidate who's who's talking about that. It's all predicated on, oh, you know, we built we had the revenues to build this up this year because we cut PFDs so deeply, but we had the revenues to build up spending this year. That's the starting point for next year. You know, we've we've now gotten all these constituencies invested in these spending levels. That's their expectation for next year. So, you know, we gotta keep up with inflation next year. That'll be the that'll be the battle cry of somebody. So yeah. So when the bubble does pop, it's all the PFD at that point. They'd have to take every bit of it to fill the hole. And that's what we do. I mean, we that's what that's what Alaska does. It goes from price spike to price spike, builds up spending on at a price spike, suffers in the in the meantime, but now we've now we've learned we just take it out of the pockets of middle and lower income Alaska families, suffer in the meantime, then there's another price spike, then we jack up spending again. I mean that that that that column in the in the FY26 uh uh the evolution of the FY26 budget, that column that shows revenues of one number and spending of the exact same number plus some, because if we have more revenues, we want to spend them. Now the other one, the skinny one, the the the yeah, that that this chart just speaks volumes. I mean, this chart were in the total UGF revenue, spring revenue forecast 6526.7, and then total appropriations 65267. The exact same number. They didn't even try to hide right what they were doing, and then the double asterisk that said, and if we get more revenues, spending could be even more. We could take it up a jack it up another two 225 million uh on top of the 6.526. So it's just I mean, that speaks volumes of what's going on. Brad Keithley, Alaska's horse sustainable. I mean, but what happens once they've taken all the PFD? Then what's gonna happen? That's the next step, right? My crystal ball says that we spend more than we have. That's a pretty good crystal ball. I mean, I just gotta say, that's uh uh but I could do that without the crystal ball. Uh Brad Keithly, Alaskans for Sustainable Budgets, the weekly top three.
AKLNG Property Tax Break Debate
Um, the cherry picking of the Louisiana and Texas fiscal structures. You're speaking specifically about an opinion piece from Rebecca Schwanke, uh, the representative uh from uh uh uh Glenn Allen uh who uh put out a piece in in uh the Alaska story talking about how LNG projects do need property tax breaks. But uh you have some thoughts on that, Brad. Yeah, so I'm gonna pick on on this article and pick on Rebecca, but it it's really sort of unfair to do that because she's just she's just picked up the party line that's being spread by Aoga and uh and the Alliance and others. And so it's not it's not really Rebecca, it's just this whole party line that's going on out there about the LNG project. So yeah, as part of the defense of the governor's proposed uh huge reduction in property taxes for the LNG line as part of the defense for that. Uh not the consultants had brought out uh comparisons between what's going on in Alaska, what's proposed in Alaska about the about property taxes, the governor's the existing Alaska tax structure and the governor's proposed tax structure, uh, and compared that to other states in the United States, particularly Louisiana and Texas, because those are the two big states in which LNG projects are being built. And and the comparison is that, oh, look at Louisiana and Texas. Uh Louisiana and Texas uh uh give uh uh property tax rebates or property tax uh uh uh not rate rebates, but property tax reductions in order to encourage the uh in order to encourage the construction those in those states. And so to be competitive, sort of goes the party line. To be competitive, Alaska needs to do the same thing. My problem is this they're not looking at the entire fiscal structure of Louisiana and Texas when they make that when they make that comparison. Louisiana has both income taxes, not immaterial income taxes and not immaterial sales taxes. Um both of those uh in their fiscal structure. Texas has even greater sales taxes. They don't have an income tax, but they have higher sales taxes than Louisiana does. So when you're constructing, when you're constructing a project, yes, you're giving property tax, you're giving, you're giving concessions on the property tax for those projects. But at least in Louisiana, the workers on those projects are still paying income taxes. And and and at least part of the project, as well as all of the purchases being made around the project, are subject to sales taxes and are generating sales tax revenue. So, so the the reductions are being given in the context of we'll give you a reduction over here because we know we're gonna continue to get significant revenue over here. Right. And and so they have a tie between the government and the private economy. That's why they're doing it. Right. And so, and so you there it's it's can it the context is you know, when I have when I'm gonna get a bunch of money out of a project because I'm gonna get a bunch of sales taxes, I'm gonna get a bunch of income taxes out of a project. I can give you a little bit, I can give you some concessions over here on your project because I'm gonna get a bunch of money out of the additional sales taxes and out of the additional uh income taxes that are gonna be generated. I'm buying basically the calculation. I've been there in Louisiana, I've been there and how you how we do those calculations. Um basically the calculation is I'm buying increased revenue. I'm buying increased revenue by reducing taxes in one place. It's gonna generate taxes in another place that I get that I get increased uh revenue out of. So the so the net calculation is I'm gaining money out of the out of the deal. That's not that's that's not even close to what's going on in Alaska. In Alaska, we don't have sales taxes, we don't have we don't have income taxes. And unlike Louisiana and Texas, who calculate their production taxes based on gross value, gross blood value, we don't even do that. We have we have we have uh uh uh reductions on uh on on production taxes as well. So there is no there is no net calculation that you can do in Alaska that says, I'm gonna get a bunch of money over here, so I can afford to give property tax abatements over there in or property tax concessions over there in order to generate the additional revenue I'm gonna get over here. There is no calculation like that uh in Alaska. We're just giving money, we're just the the the net in Alaska is negative as opposed to what's going on in Louisiana and Texas. And all these articles and all these talking points, and I, you know, I apologize, Rebecca, to pick on you, but you're the one who got out in front on it. All of these, all of these arguments that people are making about, oh, well, we got to do it to be competitive, they're missing the point. They're missing the point of why those states of how those states are looking at those projects in terms of their overall fiscal approach and in terms of their overall uh uh revenue approach. So I think it's I mean, it's there's there are reasons to do the LNG project, there are reasons not to do the LNG project. In particular, there are reasons to be concerned about the LNG project, particularly if we're only doing phase one. But but there's reasons to be concerned about the LNG project. But one of the reasons to give the the abatements uh that that the governor's proposed or any property tax abatements is not because look how Louisiana and Texas does it. It is, it is to think, it is, it is, it is to it is to do it for other reasons. If you want to look in Louisiana and Texas, the answer ought to be okay, well, we ought to have a property, or we ought to have sales taxes, we ought to have income taxes. So we can generate those revenues in the same way that Louisiana and Texas are that offset the reductions that we're giving on the property tax side. One one final factor that the people ought to keep in mind. We had a
Texas And Louisiana Are Not Alaska
we had an income tax when TAPS was built. People talk about, oh, the great things that you know, the construction of TAPS and all of the all the economic activity that generated, the state got a share of that because we still had an. Income tax at that point. We didn't drop the income tax until after TAPS was completed and the oil was flowing. So we've been down this road before. And one of the reasons that TAPS was such a good thing, a lot of reasons why TAPS was such a good thing, but one of the reasons TAPS was good was a good thing was we had an income tax that was generating enough revenue to offset the the costs that were going on at the time TAPS was being built. We don't have that now. So there's nothing, there's nothing sitting in there to offset, I mean, unlike the way Rebecca's talked about, there's nothing sitting in there to offset the concessions that are being given on the property tax side, unlike Louisiana and Texas. Well, it's uh, I mean, you're right. And again, we've talked about it. It has all everything to do with a connectivity, and that's why government's running amuck in the state of Alaska is because there is no connectivity uh to the rest of the state. And uh this is just yet another example of it. It's not just all it, you know, you have to look at all the pieces. You can't just look at one piece and say, well, this worked there, so that has to work here. You have to look at all the pieces, and there's just nothing there. Now, it doesn't mean that we don't want a gas line, doesn't mean that there wouldn't be knock-on benefits to the gas line of it happening, but don't try and sell me on the idea that it's going to be just like it is in Texas and Louisiana, because again, it's apples and oranges. It is. And and and the benefit of the gas, I mean, all these people go around talking about Adam Crumbs, talks about all the jobs that are going to be created. Well, adding people to the state, bringing in outside workers, and remember 40% of the old oil workers are out from outside, adding people to the state actually costs Alaska in terms of increased government services that we have to provide for those increased people. Schools increase, all sorts of all sorts of increased spending for, but we get no revenue off of it. I mean, Louisiana, Louisiana, Louisiana at least has figured out that they need revenue to run the state, and that the revenue comes from oil. Louisiana has a lot of oil revenue. They have a lot of state-owned leases. Well it comes from oil, but also comes from people. People have to pay a share of the govern of the of the government spending. And if they have increased population, they get increased revenue to pay for the increased population. Alaska doesn't do that. And and we're just we're setting ourselves up again. We're just setting ourselves up for failure uh in the in the way we run these things. I mean, that's the thing, Brad. Again, all I could see is that Johnny Depp of the Pirates of the Caribbean, where they're running from one side of the ship to the other and they eventually roll it over because that's what you do when you you go from one crisis to the next, and as soon as you get all that money, you're like, man, there's so much money we don't know what to spend it on. And then a year later, 24 months later, you're you're in the doldrums and you're like, my god, we're all gonna die. And so we've got to do all these stopgap measures until the price spikes again, and then we got to spend all the way up to the thing. I mean, that's that's that's where we're at. That's what we've been doing. That's how we ended up with a budget that's gonna be half a billion dollars more. I mean, the overall budget. We I keep going back to this. We spent two billion dollars more this year than last year. Two billion now it wasn't accounted for on your charts because one of them is a transfer, but they spent two billion dollars more than they did last year, and not a single dollar of that went back to the PFD, which is where it should have gone. But instead, they put it in the corpus so they could have more money in the future out of the permanent fund by increasing the corpus. That's that's the whole point here. They want to make that self-licking ice cream cone of the corpus hit a hundred million, a hundred billion dollars, so they don't have to they don't have to beg anybody for money. Oh, but Michael, they will. I mean, so we know it will. We know it will. I mean, their plan is all high in the sky and utopia of oh, it'll be a hundred billion and we'll never have to worry. You're gonna spend every freaking dollar in then summer. They already have, they already have. That's the point. They already have, they've already spent it all, and now they're spending even more. So uh 5% on $100 billion is five is is five billion dollars, right? That's that's the annual number. Look at those, look at those spending numbers that for FY 2026 and FY27. They're a hell of a lot higher, even after you even after you take half the PFD, they're a hell of a lot higher than five billion dollars. They've already spent more than the than the than the you know the utopia of a hundred billion dollars um uh in the uh in the permanent fund and living off the earnings of that. So it's I mean it's the legislature is out of control. And and we and we're and we're giving Bert Steadman, Senate finance chair, and Chuck Kop, House finance uh House or House uh majority leader free rides because oh, they've done such a good job. Nobody could ever want to challenge them. And again, I'm gonna again I'm gonna throw the Republican Party under the bus. Where were you guys? Where were you guys? You guys chastise, I mean, especially for somebody like Kopp and Steadman, who have gone outside of the party metric, and you guys have criticized the party has criticized them publicly, saying, Well, they're not really, they're caucusing with the they're doing, and yet you did nothing, not a single, not even a token candidate for crickets. It's it's astonishing, and that's and that's why this doesn't change. I mean, cop and steadman go back and say, Oh, I must have done really good stuff. I need to do more of that stuff because I did such cop who led the who led the the the the pension benefits. I mean, he's coming back stronger than ever. They didn't put anybody up against me. Uh so I must have done a great job. I need to do more and more and more and more of that job because because evidently I did such a great job, they didn't even want it that nobody even wanted to run against me. It's I mean, we're doing it to ourselves. It it you you writing the history of Alaska in 2050, I won't be doing it because I'll be gone. But writing the history of Alaska in 2050 and 2050 is gonna be easy. It was the best of times, and yet they spent it all and and they and they made it into the worst of times. I mean, that's that's basically gonna be gonna be the the the the look back history of us uh of us from uh from mid-century. So it's I mean we're doing it to ourselves. Jeremy says Brad is missing that local government supports many of the services he's talking about, the largest beneficiaries, the property taxes, the no slower borough of the state, and the keen eye in that order. Yes, yeah, I don't think that that I don't think that Brad was talking. What he's saying is you can't compare apples to oranges, Louisiana and Texas to Alaska because they have a completely different structure. That's what he was saying. I think you guys are actually in agreement here, Jeremy. That's what he's talking about. You can't compare those. Yeah, well, and also, Jeremy, you're your legislature, including you on the on the House Finance Committee, appropriated a hell of a lot of money to the localities to help support them. You appropriated more money for K-12 to help support the localities so they wouldn't so they wouldn't have to come up on their own. I mean, you guys, you guys are acting as if you're the resource of last resort for the for the localities and you're spending the money to support the localities. Where are you getting that money from? You're getting it from PFD cuts. You're getting it from middle and lower-income Alaska families almost exclusively. I mean, who pays, right? That should be the number one question. Who pays? The ultimate is Alaskans are paying through their PFD cuts and everything else. And once the PFD is gone, then the then the then the roosters coming home to roost. Then it's going to be blatantly, again, free rides die hard.
Spending Caps Taxes And Closing Thoughts
There's no such thing as a free lunch, there'll be some form of taxation, and then they'll spend all of that too, which has always been my gripe with between you and me, Brad, when we talk about taxes is I understand ideologically and intellectually what you're talking about. I don't favor new taxes unless we have an ironclad spending cap, because otherwise, they'll spend every new dollar of taxes and we still won't get a PFD. That's the challenge there. Yeah, somebody's reaction when I was showing them the Ledge Finance chart or showing them the exact duplicate between revenues and spending. Somebody said, Well, that proves that they'll just spend it all. And even they'll spend even more than that, the double asterisk about the whatever you put in there, they're going to spend it and then send. I mean, that's been the talk about M. Hoff. We've got so much money, we don't know what to do with it. And I agree a spending cap is a critical part of it, but a spending cap isn't the solution. We're already 1.95 billion in the in the in the red. If you put a spending cap on at current spending levels, we're going to continue to be. Actually, the the deficit grows because revenues from oil production go down. Continues to drop. Yeah. So it spending cap's part of it, but it's not the it's not the the only part of the solution. Final thoughts on the weekly top three, Brad. Less than a minute here. Just final thoughts before I let you go. No candidate is talking about these issues. And that's just that's just frustrating as hell. No candidate is talking about what went on between the beginning point of the FY25 budget and and where we or the FY26 budget and where we are now and where we're going in the FY27 budget. No candidate is talking about the offset revenues that we need to deal with the reductions that are being proposed to be given to the to the LNG line. And that is frustrating because no candidate is looking out for Alaska's fiscal future. They're all just living in the moment. Ooh, Iran. Well, that's the thing. I mean, you mentioned it earlier, living from spike to spike. You know, we up the spend anytime it spikes, and then we live in the crisis in between those in the troughs, you know, and that's where we're at right now. Brad Keithly, Alaskans for Sustainable Budgets, the weekly top three. Thanks, Brad. Appreciate it. Michael, as always, thanks for having me.
Wrap Up And How To Follow
Well, that's a wrap for another week's edition of the weekly top three from Alaskans for Sustainable Budgets. Thank you again for joining us. Remember that you can find past episodes on our YouTube, SoundCloud, Spotify, and Substack pages, and keep track of us during the week on Facebook and Twitter. This has been Brad Keithley, Managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week for the next edition of the Weekly Top Three.
