Editor's Note: This article was initially published inaccurately crediting Sarah Palin with signing the fiscal year 2006 budget. The first budget former Gov. Palin signed was for FY2008.
Maybe it was the spirit of Christmas Future that this week spurred former Alaska Gov. Sarah Palin to unload on potential "insolvent states." Because those like California failed to heed her warnings that President Obama's economic stimulus "was equivalent to a federal bribe with fat strings attached," she posted on Facebook, there is now talk of failing states and bailouts from Washington, D.C. -- something that hasn't happened since the Great Depression.
If only the other states had followed Alaska's lead, added Palin or her ghostwriter. There is really no way to know who exactly wrote what -- Palin or her staff -- on Palin's Facebook page, which the half-term, ex-governor uses to push her public policy agenda to millions. Alaska, it was posted on Facebook, knew how to manage a budget back when Palin was governor and "ran a surplus because we incentivized (sic) businesses, I didn't spend it on fun and glamorous pet projects for lawmakers -- though that would have made me quite popular with the earmark crowd. In fact, I vetoed more excessive spending than any governor in our state's history, and I used the state's surplus to bring our financial house in order ..."
Earmarks are government expenditures dictated by the legislative branch of government instead of the executive branch. Alaska's Legislature doesn't do earmarks, which left some legislators wondering about Palin's earmarks comment. More baffling, though, was the reference to "incentivized businesses." As governor, Palin did start in motion a reduction in the business license fee from $100 to $50, but the old $100 fee wasn't exactly hampering commerce. And besides, everyone in Alaska knows precisely where Palin's huge budgetary surplus came from.
It came from oil. The state has always imposed significant taxes and royalties on oil. Oil pays for about 85 percent of state government through taxes, royalties and fees. And the state's cut is tied to the price of crude, which was going for about $130 a barrel when Palin was governor. Given those prices, Alaska was looking at a tax windfall even before Palin and state Democrats upped the ante.
They went after big bucks the old-fashioned government way. They imposed hefty new taxes on the oil industry via a law known as "Alaska's Clear and Equitable Share," or ACES, as Palin liked to call it. ACES increased Alaska's take from the oil industry in fiscal year 2008 by more than $2.5 billion, according to a government analysis.
ACES was not a business incentive for the oil industry. It was, Palin once liked to boast, Alaskans taking their "fair share" of the black crude pumped up from deep beneath the state's North Slope. The oil industry saw it more like a mob shakedown, which is neither here nor there. But it is worth noting the "equitable share" (or in the view of state conservatives, the big, fat tax) appears almost certain to be reduced by the Legislature this year because it appears to discourage the oil companies from drilling new wells. One might say ACES "disincentivized" the state's biggest and most profitable business.
Palin was once proud of ACES for sticking it to Big Oil. Obviously, she has now decided that what the oil companies view as a Venezuelan approach to business taxation doesn't fit with her present image as a "common-sense conservative." A Hugo Chavez-style character would hardly qualify for that label, so Palin has created some gobbledygook about raising revenues in Alaska by "incentivizing businesses."
The only Alaska business Sarah Palin really might be thought to have incentivized is the news business. Palin's mushrooming celebrity in the wake of her failed bid for vice-president has created a great Alaska flood of "news" and television infotainment tens of miles wide and about an inch deep.
A key part of that news has revolved around her sometimes unique view of "facts," as evidenced yet again in her most recent Facebook note.
"It's one thing to veto spending and reduce the size of government when your state is broke," she posted. "I did it when my state was flush with revenue from a surplus -- though I had to fight politicians who wanted to spend like there was no tomorrow."
There is one big problem there. Palin didn't reduce the size of state government. The first budget Palin signed, in 2007, totaled $9.8 billion, a decrease from the $10 billion signed the year before. But that budget had been written by former Gov. Frank Murkowski, who left office in January with a $9.7 billion proposed budget on the table.
The first budget Palin actually authored, and later signed, totaled $14.7 billion.
On May 21, 2009, a little more than two months before resigning, then-Gov. Palin signed a fiscal year 2010 budget totaling $10.6 billion. It was the last budget she signed, and it did mark a reduction in state spending. It was less than the record $14.7 billion budget she'd approved for 2008, and it was still greater than the last budget signed by Murkowski, her predecessor.
By means of comparison, the budget for Democratic Gov. Tony Knowles, the state's last big-spending governor, totaled $8.3 billion for fiscal year 2003, over $2 billion less than Palin's last budget. The Republican who followed Knowles, Frank Murkowski, drastically cut state spending as oil prices dipped to $25 per barrel at mid-decade, but the budget had again crept back above $8 billion by the time Palin forced Murkowski out of office. By then, oil prices were climbing and the Legislature indeed wanted to start spending money.
Palin did fight to try to keep spending in check, and she used to adhere to the argument, as in her resignation speech,
that she slowed the rate of government growth. Palin deserves some credit for trying to hold the line on government growth when the state had a large surplus of cash.
But it's flat wrong, not to mention unfair to the governors of financially struggling states that lack access to a deep-pocket oil industry they can tax for billions, to proclaim a reduction in "the size of government ... when my state flush with revenue from a surplus."
That didn't happen.
Why Palin exaggerates and misleads like this, when the truth might be quite good enough, is hard to know. She doesn't answer questions from the media. She basically only talks to Fox News, which pays her. She doesn't get asked any tough questions by the Fox crowd, and her only other means of direct communication with the public at-large is via Facebook, a one-way street down which Palin can roll her "truth" to the masses.
"It's not easy to tell people no and make them act fiscally responsible and cut spending when the money is rolling in and your state is only 50 years shy of being a territory and everyone is yelling at you to spend while the money is there to build," she (or her ghost-writing aide) posted in the latest Facebook note.
Indeed, it was so uneasy that she quite literally failed at cutting spending in Alaska. Worse, though, might have been her failure to recognize why some Alaskans were yelling at her to spend and to build.
It's simply not smart to save money when you've got a leaky roof and pockets full of cash. In that situation, the smart thing to do is to fix the roof, which is sort of the situation Alaska found itself in just before Palin resigned.
Alaska is the most infrastructure poor state in the nation. It was also one of just a few states predicted to go counter-cyclical when the recession hit hard. The 49th State had a surplus to spend, and America was suddenly full of contractors begging for work. Alaska roads, harbors, schools, state office buildings, hydropower projects, wind farms, and more could all have been had for 70 or 80 cents on the dollar or less.
The state might even have been able to finance an all-Alaska gas pipeline to Valdez to start exporting liquefied natural gas (LNG) instead of following Palin into a deal with TransCanada, and the ensuing war with BP and ConocoPhillips, which has resulted in a stalemate on the pipeline.
Most Americans probably remember the pipeline. It is the same pipeline of which newly nominated Republican Vice Presidential candidate Palin said from the national convention in 2008:
"I fought to bring about the largest private-sector infrastructure project in North American history. And when that deal was struck, we began a nearly $40 billion natural gas pipeline to help lead America to energy independence. That pipeline, when the last section is laid and its valves are open, will lead America one step farther away from dependence on dangerous foreign powers that do not have our interests at heart."
Palin gave an excellent speech, a stirring speech. But it's now more than two years on and the pipeline still hasn't begun. Not a shovel of dirt has been turned. And it's beginning to look like no dirt will ever get turned unless Congress comes up with some sort of cap-and-trade plan for greenhouse gases to encourage the development of clean energy (gas) over dirty energy (coal). Palin is, of course, opposed to cap and trade.
Sometimes it's pretty easy to get the impression that what Palin says and what Palin does, or what she believes she's done, are two distinctly different things. Consider this one, last line from her latest Facebook post:
"I returned much of the surplus back to the people (it was their money to start with!) through tax relief and energy rebates."
Yet another half truth from the half-term governor. Alaskans did get a $1,200 energy rebate in 2008, supposedly because oil and gas prices had skyrocketed at retail. There were no more rebates even though oil, gasoline, natural gas and electricity prices are now almost back to where they were two years ago and, in a few cases, higher. Alaskans did also get an opportunity to apply for rebates on expenditures to make their homes more energy efficient, but the rules for that program are complicated and only a comparative few have participated to date.
As for tax relief - to what tax relief does former Gov. Palin refer? Alaskans don't pay income tax, so there's no way to provide relief there. And the state didn't up revenue sharing with cities and boroughs to provide them the money to drive down the property taxes in Anchorage or get rid of sales taxes in the many small Alaska communities from Kotzebue east to the Kenai and north to Wasilla, Palin's stomping grounds. Palin did dump the tax on gasoline, but it was already so small that it was often lost in the week-to-week fluctuations in fuel prices.
And then there are all of Palin's claims, again in the Facebook note, about what she did as governor with federal stimulus money sent north by Obama, money the state honestly didn't need because it was in the luxurious position of funding its own stimulus from savings, instead of adding to the federal deficit.
Palin took nearly all of the money anyway, but now claims she did so against her wishes. Maybe that's what happened with the other governors she's now lambasting. Palin's relationship to the stimulus really is its own, convoluted tale, one that can be fact-checked against the record, and against the excellent reporting of Dermot Cole in the pages of the Fairbanks News Miner. Read Cole's analyses here.
Read them if the truth matters at all.
To some it won't. Palin has done a masterful job of taking the small and many everyday errors of the "lamestream media," as she calls almost any news organization that questions her, and using them as weapons with which to attack those who question her own bogus assertions. She has proven herself both right and righteous by never admitting to getting anything wrong. It is a classic propaganda technique.
"If you tell a lie big enough and keep repeating it, people will eventually come to believe it,'' Nazi propaganda chief Josef Goebbels once said, before warning "the lie can be maintained only for such time as the state can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the state to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the state."
Palin lacks the power of the state to repress dissent, but she uses the powers of her bully pulpit well to try to control it. She attacks her critics as unfair, biased and mean. And when things really get tough she pulls on the cloak of the victim to plead that that the "lies" being told about her and her family are outrageous, painful and un-American. It's easy for reporters to start to feel sorry for her. You get done writing something like this, and you're likely to feel like maybe you're just another in that gang of nasty journalists beating up on the poor, embattled woman from Wasilla.
But what's the alternative? Leave her alone to keep repeating her fictions until they become everyone's facts?
Contact Craig Medred at craig(at)alaskadispatch.com