Discover more from The Alaska Memo by Matt Buxton
The brewing battle between the haves and have nots
The PFD, the budget, unemployment benefits and revenue are all boil down to a few simple questions about who gets what.
Happy Friday, Alaska!
In this edition: Let’s take a look at what’s going on with session, the surprising emergence of some nuance when it comes to the Alaska Permanent Fund, the battle between the haves and the have nots that’s encapsulated in the let’s-blame-unemployment-for-people-not-wanting-to-work-minimum-wage-jobs debate, the view from Anchorage elections, some weekend reading and a somewhat timely video about someone who dared to soar.
The Legislature’s to-do list as of Day 109
Disaster declaration bill – passed
Operating budget – in the ether, but scheduled for the Monday floor
Capital budget – waiting for the operating budget
The dividend – ???
The joint session for confirmations – Scheduled for Tuesday!
The state of things
All of that aside, the Legislature is, remarkably, taking some steps forward on the Alaska Permanent Fund this week. The House has advanced two proposals that would put the percent of market value draw into the Alaska Constitution, and they’ve put forward a proposal to pay a dividend (a $500 one) and another to remove the dividend formula from state law. The Senate is eyeing another big transfer of Alaska Permanent Fund earnings reserve dollars to the corpus of the account to get it away from, as Sen. Lyman Hoffman put it during today’s Senate Finance Committee meeting, “the greedy fingers of legislators.”
Perhaps one of the most remarkable concessions from this week’s discussion on Gov. Mike Dunleavy’s proposal to put the draw into the constitution is that he, the great promiser of the mega PFD (see also this website’s homepage), is not particularly keen on constitutionalizing the current PFD formula. I mean, it makes sense as the historical formula would put something north of 70% of the draw to dividends and would hamper the state’s ability to balance any kind of budget, but it’s still a remarkable shift that concedes what most everyone could’ve told you back in 2018: That mega PFD just ain’t ever gonna happen.
But what’s perhaps even more interesting is the emerging Democratic support for the dividend with several members in both the House and Senate voicing support for something like a 50-50 split between dividends and government services. I think underlining it all is the growing recognition of what Brad Kiethley would like everyone to remember: That cuts to the dividends are the least-equitable way to balance the budget, placing the greatest burden for funding government on people with the least. Sen. Hoffman, D-Bethel, made a point of it during today’s Senate Finance Committee hearing, noting that this whole narrative that the PFD is the driver for the potential overdraw of the Alaska Permanent Fund is really a matter of framing and timing. Just because they’re leaving the dividend for the end, he argues, doesn’t mean that it’s any more or less responsible for overspending.
In the bigger picture, I think this is starting to mark the end of the uneasy alliance between Democrats and moderate anti-tax Republicans that has got us to this point. While both of those sides can largely agree that axing state services to pay for a dividend isn’t great, they certainly don’t see eye to eye on the next step now that state savings and, therefore, the easy decisions ares running out.
Democrats, for the most part, want to see some new revenue come online to balance the budget while maintaining a dividend, the size of which depends on the district they represent (but the upper limits seem to be the 50-50 level). The Democratic pitch on new revenues has typically landed somewhere between hiking oil taxes and implementing a progressive income tax. Meanwhile, we’ve heard several times from Anchorage Republicans that they’re not willing to support an income tax to pay out dividends, a reflection of the interests of their generally wealthier communities. They’re also keen to point out, as the Senate version of the operating budget shows, that the budget would pretty much balance without the need for new revenue if we just eliminated the dividend altogether.
These positions were always going to run into each other but the state’s savings and now the influx of federal relief dollars have helped extend the runway.
Whether or not any of this results in them finding real and durable solutions is probably a long shot because of the whole influx of federal relief money can, with some creative budgeting, free up enough state money for a modest dividend that can be grown with a majority vote to overdraw the Alaska Permanent Fund.
And, as they say, there’s an election coming up.
Capital vs. Labor
As if to reinforce the political lines between the haves and have nots, Republicans are rushing to cut and cutback unemployment benefits in response to a handful of businesses complaining that they can’t fill a bunch of minimum wage and near-minimum wage jobs all at once. Never mind that economists have warned that things are far more complicated—that things like a shortage of child care and uncertainty about safety on the job are keeping people from rushing back to the work while everyone’s trying to hire at the same time so there’s unprecedented demand for relatively undesirable jobs at relatively undesirable wages.
Rep. Chris Tuck, D-Anchorage, gave what was frankly one of his more impressive speeches on Thursday (and, hey, a good place to try out some talking points because, after all, there’s an election coming up) that highlighted the value of the labor in response to the rush to cut unemployment and demonize workers. I wrote about it here, but the key takeaway is that this rush to cut unemployment favors businesses that have long gotten away with paying people undesirable wages for undesirable jobs.
“When we look at those people who are unemployed and look at others that are trying to hire, I guess the real question is: Are they paying a living wage? Nobody wants to be on unemployment,” he said. “You look at minimum wage, there’s no opportunity in that. You’re basically making people a slave to their workplace when all they’re trying to do is to work to exist.”
This whole debate has dominated much of the conversations I’ve had over the past week and touched a nerve on social media. I think the pandemic changed a lot and drove people to reconsider their lives and make some investments in their future—there are a lot of young people I know that are having babies, getting married and buying homes in large part because everything forced us to stop and think about the long-term. As Tuck pointed out, there’s not a heckuva lot of room for long-term thinking when you’re stuck in a minimum-wage job.
I can’t help but think that that’s part of what’s going on for people who had previously been scraping by at the demanding low-wage jobs in the service industry. Once things were severed with shutdowns, why rush back to near-minimum wage jobs at businesses that have happily been hosting maskless fundraisers for far-right mayoral candidates when other employers can offer more? (By the way, that’d be La Mex, which hosted an absolutely packed Bronson fundraiser and was one of the companies complaining about employees being “poached” in this ADN article about the labor shortage.)
The pandemic laid much our country’s inequities bare, so excuse us if we’re not rushing back to “normal” because “normal” was never that great in the first place.
The view from Anchorage
The mayoral run off election will come to a head next Tuesday, finally settling whether progressive candidate Forrest Dunbar or Dave “If there was even a pandemic” Bronson will take office. It’s a race that, as I’ve written before, is as boring as it is consequential. Dunbar and Bronson are so far apart in policy, character and politics that I can’t imagine that many people are really on the fence. I could spend all afternoon writing a dissertation about the differing positions, but I really think that Bronson’s comments dismissing the pandemic as either non-existent or over last year really encapsulates everything. And if you’re going to read anything, I think this letter to the editor from Megan Clancy, the Medical Director of Infection Control at Providence Hospital, says it all. Here’s an excerpt:
“If you’ve never been in a dead-silent intensive care unit, listening to the chaplain recite the Lord’s Prayer outside a room with the one family member allowed in pressed up to the glass door wailing, it is an experience that will haunt me forever. Perhaps if Mr. Bronson could have walked the floors and ICUs with us, counting the rooms and life-saving equipment taken by this pandemic, praying there wasn’t a flurry of car crashes or heart attacks that we did not have beds for, he would have a better understanding of just how devastating this pandemic was and continues to be.”
Like with most of the reporting on the Anchorage mayoral race, Bronson gets top billing and most of the air in a story that he refused to be interviewed for. Still, it’s a good look at the positions each candidate would take when it comes to the city’s homelessness. From the Anchorage Daily News: Anchorage is at a turning point on homelessness. The mayoral runoff candidates differ on what to do next.
Alaska’s hills may be a great source of rare-earth minerals, the sort of stuff needed for phones and technology and stuff, but processing that ore is so nasty that there’s a reason why other countries have capitalized on it. So it’s really interesting news that there’s not only a way to extract the minerals without creating the horribly toxic byproducts but it came from an Alaska Native student. From Alaska Public Media: Yup’ik college student, founder of Alaska biotech company, wins international entrepreneur award
A very big congratulations to former News-Miner editor Rod Boyce, who helped me find my footing and voice in Alaska more than anyone else, for receiving the Alaska Press Club’s First Amendment award. From the News-Miner: Former News-Miner editor honored with First Amendment award
If you’re looking for some real solutions to the labor shortage instead of just an opportunity to blame social safety nets, here’s an interesting read from what’s going on in Pittsburgh: Amid labor shortage, these Pittsburgh companies are filling open roles. Here's how.
And now for something completely different
This week’s excellent story on the history of Alaska’s hot air balloon scene before “cocaine and insurance costs ruined everything,” reminded me of this excellent, excellent recap of this frankly insane story: “It's 1982, and Larry Walters of North Hollywood is sitting in a lawn chair. He has a BB gun, a radio, and some sandwiches. He is floating 15,000 feet above Los Angeles. He is in trouble.”
Have a good weekend, y’all! Say hi to some friends!