This is from reader Garand Fellow in response to my question about how long the Walker administration honeymoon will last. He/she goes much further. I don’t necessarily agree with him/her about everything—particularly about the gasline—but it’s a well thought-out column and worth taking the time to read in full:
I hope the honeymoon will be long but the odds are against it. First, there is something in the water on the 3rd Floor that causes arrogance toward the legislature. Also, the new COS and the legislative leaders have a rocky past. Finally, with lots of new, inexperienced people there are chances of screw-ups and misstatements that will destroy the honeymoon before needed fiscal decisions are made. The press will give the new governor lots of rope but if he lets them continue to think they are important (now that the election is over and the press is unimportant) they will use the rope to hang him when he finally has to test his leadership skills.
Governor Walker has to lead Alaskans as we begin to decide how much government we can afford, and it will be much less government than what we have now which is how much government we want. The question isn’t who we can tax so that we can keep this huge government going, the question is how much bureaucracy can this economy really afford. And there is absolutely no sane person who can look at the world energy and financial environments and expect a pipeline to bring North Slope natural gas to Southcentral tidewater. The only question is whether the economic dislocations will be efficient and reliable, or whether remaining state cash reserves will be spent tilting at windmills and propping up state and municipal government until there is no alternative to jumping off the cliff.
I would propose to Governor-elect Walker that if we are going to be unintelligent about this, and if we want the economic dislocations to be as severe and deep as possible, we can continue to prop up this bloated state and municipal government structure (it’s really one structure). But if we are to continue to maintain government at unsustainable levels until all the cash is gone then it makes sense to first take the controversial cash off the table; let’s use the PCE and the earnings reserve of the Permanent Fund before we use the general budget reserves. That gives us a better chance of having some cash left later when hopefully we do become intelligent and good financial managers. No one should expect decisions like this to be made of course.
If we want the economic dislocations to be as easy on Alaskans as possible the state should right now invoice municipalities for their share of the PERS and TRS unfunded liabilities. Reimbursement of municipal school debt service should end. Capital projects now funded and under construction should be examined for possible abandonment. The senior welfare program that replaced and now exceeds in cost the earlier longevity bonus should be ended. Medicaid and the BSA need to be reduced in nominal dollars. Other subsidies like PCE should be ratcheted down. Unless or until the courts say no all subsidies like PCE need to be placed on a path to curtailment.
I predict that many people will now look for more ways to involve the courts at this early stage (instead of at the end when it cannot and will not be resolved without the courts). That is, what Fairbanks and Ketchikan did to involve the courts in the school funding discussion will lead the way to seeking court rulings that resolve some of the many other government funding anomalies hidden or allowed up to now by petroleum revenues. We have all been near-do-wells spending other people’s money (we thought) so we could be spendthrifts, and in fact we were spendthrifts of course.
If Governor-elect Walker is no more of a leader than his predecessors, and if he postpones this fiscal comeuppance while first spending all the reserves then we may all one day wish we had left Alaska right about now and watched this from afar. One litmus test is if the legislative leadership and the governor are calling each other names by the 4th week of the session then intelligent Alaskans will be selling and shorting. If the state of the state speech doesn’t list state general fund programs that will be eliminated this year then we are in big trouble. If instead that speech tells us a gas line will save us all then there won’t be a UHaul truck available to rent by Labor Day.
There will be a honeymoon of some duration. Governor Walker should use this period to make big decisions that will reconcile expenditures with expected revenues from known, proven sources. That means eliminating programs rather than hiding behind the fiction of so-called across-the-board cuts. That means hoarding cash by not even waiting until July 1 to spend less. That means he will have to be a leader, and the easiest time for him to do that is very soon. Unity will need to mean making both Republicans and Democrats squeal if Governor Walker is going to solve this problem.