By SAM ALLEN
Ketchikan Daily News
Staff Writer
More than 125 people paid to hear Gov. Mike Dunleavy speak Monday in Ketchikan, an extension of his “roadshow” efforts to attract support for his proposed budget and three constitutional amendments.
Dunleavy began the noon luncheon event organized by the Greater Ketchikan Chamber of Commerce at the Sunny Point Conference center with a presentation about his proposals. It was followed by a question and answer period with the audience.
Before speaking for 34 minutes and opening up the room to questions, Dunleavy said, “What I’m doing is not — I know people don’t believe this — but it’s not the machinations of a mad man. I’m not trying to destroy the state of Alaska.”
During the Q&A, most of the discourse was civil, but there was tension in the air that Dunleavy deflected with humor. People in the crowd mumbled things under their breath, called out people making long-winded statements and shouted, whistled and hollered/cheered at separate moments.
“I am 100 percent convinced that there are solutions to every problem,” Dunleavy said at the start of the presentation, “The problem is not the mechanics of solving something when you’re dealing with politics, it’s the politics of solving stuff when you’re dealing with politics.”
Dunleavy’s presentation included several slides outlining the need to have revenues match expenditures. Dunleavy has proposed about $1.6 billion in cuts and transfers for the fiscal year 2020 state budget.
Also included in the slide show were proposed constitutional amendments he sees essential to creating a stable budget plan. The amendments are:
1) The formula used to calculate the dividend would be placed in the constitution. The PFD amount could not be altered by the Legislature or a governor’s veto.
2) Any new tax or increase in tax rates passed by the Legislature would require a vote of the people. Any voter initiative to raise taxes or increase a tax rate would need to be approved by the Legislature.
3) A spending cap calculated on a three-year average of state spending. Increases would be factored in for rises in inflation and population. The Constitutional Budget Reserve would be eliminated and replaced with a savings plan. Under this plan, unused funds would be transferred to the General Fund or the permanent fund.
During the Q&A Rep. Dan Ortiz, I-Ketchikan, sitting in the audience, expressed his concern over the proposed budget.
“I think when you talk about (how) your plan doesn’t call for any added revenue or any added taxes, I think that’s disingenuous as well because what your budget calls for is cost shifting down to the local level,” Ortiz said.
Ortiz brought up the proposed shift of raw fish tax revenue from Ketchikan to the state, which would cost Ketchikan approximately $800,000; and the changes to school bond payments, which would cost the Ketchikan Gateway Borough $2.7 million, or 14.7 percent of Ketchikan’s overall tax revenue, according to the Alaska Municipal League.
Ortiz was on the losing side of a 6-5 vote last week by the House Finance Committee, which approved a cut of almost $100 million in school bond reimbursement. This includes an additional $39 million in similar reimbursement for rural schools.
Dunleavy responded to Ortiz by saying, “No, we’re not proposing taxes at the state level, but will the local municipalities have to ponder additional taxes? Yes, they will.”
Dunleavy called to Ortiz 10 minutes later for the final exchange of the afternoon.
“This is not a political gotcha. Is he still here?” Dunleavy asked.
He was. Then Dunleavy asked whether Ortiz supported any of his proposed constitutional amendments.
“Yes, I’m in support of giving people a voice in what happens with both revenue and budgeting,” Ortiz replied.
“Are you going to propose a tax for the people of Alaska?” Dunleavy asked.
Ortiz responded, “I don’t see the House majority proposing a tax this particular year based on the indication that you would veto that.”
The crowd responded with chuckles, some applause and even a holler.
Dunleavy then said he was asking if he personally would propose a tax, to which Ortiz said no.
However, Ortiz did say that throughout the House Finance field hearings around Alaska in March, the idea that added revenue as a part of the budget solution moving forward was expressed, including an income tax.
“Thanks on the constitutional amendments,” said Dunleavy to chuckles.
Dunleavy wrapped by saying, “Yes, I’ll be back and no, I don’t get my feelings hurt that easily because I’m trying to listen to folks to come up with solutions; it’s a diverse state. You guys have some great ideas, you’re pretty passionate about things.”
