Category Archives: Immediate Reactions

Early last week I wrote a column, after the Senate surfaced its proposed FY 2015 Capital Budget, entitled “#AKbudget| The FY 2015 end game (and its not looking good) ….”  The column was not intended to start off a series but after some in Juneau attempted to defend the indefensibly high budget that the legislature is preparing to pass again this year as “fiscally conservative,” I responded with a second piece later in the week (“#AKbudget| A postscript to ‘The FY 2015 end game …“). Continue reading →

I have been told that some in Juneau think the column I wrote earlier this week on the current budget end game (“#AKbudget| The FY 2015 end game (and its not looking good) …“) is unfair because it does not properly recognize the cuts which have been made in spending over the last two years since the current so-called “fiscally conservative” Senate Majority took office (and, according to claims made at the time, finally positioned the Senate to work with an equally minded House and Governor to produce “fiscally conservative” results). Continue reading →

As this year’s regular legislative session enters its last few days, the outlines of the final FY 2015 budget are becoming clearer, and its not good for those concerned about Alaska’s future.

To bring readers current, the Governor started the bidding in December with an initial proposed budget advertised as $5.6 billion (in unrestricted general fund spending). That number, however, did not include a contribution toward the state’s retirement obligation (PERS/TRS), which exceeded $.6 billion in FY 2014 and previously was scheduled to be significantly higher for FY 2015, and also didn’t include money to cover so-called “legislative priorities,” the euphemistic phrase used to refer to legislative earmarks inserted annually by legislators in the capital budget for hometown projects.

Subsequently, last month in successive weeks the House, and then the Senate, announced their versions of the Operating Budget. The House included $5.075 billion in spending in its version, and the Senate $5.25 billion in its. Both versions, however, failed to address the PERS/TRS issue and, until today, both also lacked a corresponding capital budget. Continue reading →

I am addressing the MatSu Business Alliance today as part of their regular lunch forum.  The general topic for today’s forum is the “Amusement Park of Economics.”   As described in the invitation to today’s program, my role is to discuss “the economic wheel of the state budget” and, given my recent focus on the area as part of the Alaska House Sustainable Education Task Force, “provide individual conversation around education funding.”

As I have thought through it, I have divided the topic into three pieces:  where we are (on the state budget), where we are headed and what that means for Alaskans and the state’s economy.  My conclusions two months in to the current legislative session:

• The state budget is in for some rough – potentially very rough – economic seas ahead.  If oil goes to $90 (as some have projected), the situation will become seriously difficult.

• While the proposed spending levels currently being proposed for the FY2015 budget are lower than the last three years (and compared to three years ago, significantly lower) , they nevertheless remain at alarmingly high levels which are not sustainable and continue to spend the next generation’s money.  At these levels, the state is continuing down the path that the University of Alaska’s Institute of Social and Economic Research (ISER) previously has identified is leading to a “fiscal crisis [and] economic crash,” which in turn will lead to the need for the  “ … institution of a broad-based tax, and use of a portion of the earnings of the Permanent Fund.”

• If Alaskans want a different course, they need to tell Juneau that they will accept serious cuts.  Right now, that isn’t the message Juneau is hearing.

The slide deck reflecting the analysis and conclusions is available here.  I am looking forward to the opportunity — and more importantly, the questions following.

Last month I outlined some concerns about the proposed Alaska LNG project and suggested that the legislature look more deeply to the experiences of other, successful projects elsewhere in the world to evaluate whether Alaska was applying global best practices.  (See The Legislature should rethink the Governor’s LNG proposal, Feb. 18, 2014)

As I have listened to the testimony and presentations about the Alaska LNG project in the intervening period my concerns have only deepened, and, disappointingly, the legislature still has not appeared to turn to the lessons learned from other, successful projects to determine whether Alaska could be doing better with this one.   As Alaska discovered with AGIA and ACES, sometimes — oftentimes — its not productive to create new approaches when others already have proven successful.  I am concerned that Alaska is going down the same road again.

As I outline in the attached (a copy also can be downloaded here),  I believe this project is going wrong in three critical areas.

• Fails to achieve the “alignment” which the earlier Alaska North Slope Royalty Study found critical to successful efforts,
• Unlike successful, similarly situated projects elsewhere in the world, does not provide Alaska with an active role in the critical upstream segment of the project, and 
• Something I know a little bit about, potentially creates significant fiscal policy issues for the state and, by transferring a profitable segment of the project to a Canadian entity, does not maximize return to Alaskans.

Sometimes these things are better captured in a slide deck than by an extended essay.  I developed this slide deck in the format I would use if asked to testify or speak further on the issue.

Last year (2012), on the afternoon of July 27, I had a meeting at my request with UAA Chancellor Tom Case, primarily to discuss the recent hiring of then-UAA Women’s Basketball Coach Nate Altenhofen.

The University had announced the hiring of Altenhofen in late May, as the successor to highly successful Coach Tim Moser.

During the intervening two months I had come to develop deep concerns about Altenhofen based on his prior record and discussions with others Outside involved in women’s basketball.  As politely stated as I can, Altenhofen had developed a reputation of becoming involved with his players and staff in inappropriate ways, not something you want especially in a women’s basketball coach.  He had left his prior position as an assistant at Indiana University amidst rumors after only a year there, and had been out of college basketball entirely (i.e., no one would take a chance on him) in the year preceding his hiring by UAA. Continue reading →

Two seemingly unrelated events came together this past week to bring the emerging condition of Alaska social policy into stark relief.

The first event occurred Monday, with the release by the federal Energy Information Agency (EIA) of its most recent Short Term Energy Outlook (STEO).  Published monthly, the STEO is a look at the year ahead based on the then-best information.    In my experience, Continue reading →

At one point in college I took a writing class. (I know what the readers of this blog are thinking at this point, “he should have taken more!!” But that’s not the point of this piece.)

The professor had a particular point of view that he hammered in class after class. Writing, particularly fiction but also sometimes non-fiction writing, he argued, is really about conveying “subtext.” The story on the surface is never the real story; the real story is always in the “subtext.” Continue reading →

Yesterday afternoon I understand an Alaska Republican Party official used a meeting I regularly attend — but did not yesterday — to go negative about me.

Not that he was very creative in doing so.  Claiming to have done “opposition research,” he appears simply to have duplicated the same script that already had been offered about a month ago to Amanda Coyne, probably the best of Alaska’s political columnists.

Here was her response: Continue reading →

Click on graph to enlarge.

Let me be absolutely crystal clear about one thing.  The budgets which Sean Parnell has proposed, the legislature has passed and Sean Parnell has signed over the last three years, combined with what he has said on the record about the budgets he intends to propose over the next five years are leading inevitably to one thing:  statewide income or sales taxes, if not both, and use for government spending of a portion of the earnings of the Permanent Fund.  Period, end of sentence.

As far back as 2011, the University of Alaska-Anchorage’s Institute of Social and Economic Research (ISER) had this to say about Alaska’s fiscal future:
Continue reading →