Walker's budget cuts are mostly smoke and mirrors

You have to love a silky smooth scam, an artful flimflam where the sucker buys in lock, stock and barrel and does not even know he has been had. It requires chutzpah, hubris and the ability to solemnly furrow a brow and keep a straight face.

Gov. Bill Walker, it turns out, is a master of the scam, pulling one off the other day about slashing the state budget by $1.29 billion — and the suckers bought it. In reality, the "cuts" to actual government agencies amount to a tiny percentage of that $1.29 billion.

Worse, the vast majority of what cuts there are came out of your pocket and the oil industry's hide in a dazzling display of smoke and mirrors.

The idea, Walker said, was to cut the $4.2 billion operating budget for 2017 because the state is facing a multibillion-dollar budget gap caused by circle-the-drain oil prices and falling production. Alaska has lost 80 percent of its income in the last year or so, he says, and the stinkin' Legislature failed to pass his fiscal plan, which included a restructuring of the Permanent Fund to help pay for government operations.

[Walker's courage shines a bright light on legislators' cowardice]

He said Republicans during the special session lamented, golly, they could have voted for his fiscal package if only there were more budget cuts first. Democrats, he said, assured him they would have voted for his package if he had hosed the evil oil industry on promised, and owed, oil-tax credits.

So, he went before the television cameras with Lt. Gov. Byron Mallott at his side, and charts and everything, to announce he had cut the budget and shortchanged the industry so – ta-da! – lawmakers of all stripes could happily get back to work on a fiscal plan. The sun came out. Birds sang. News stories described it as budget "slashing." It was a "day of reckoning," Walker said. It gave me chills.


We cannot afford huge dividend checks, he said. Nothing about tightening belts. Nothing about state employee mileage paid for by the state being returned to the treasury. Nothing about real layoffs. Business as usual, except for you and the industry.

Any honest assessment must conclude Walker preserved union jobs and maintained the size of government while fleecing Alaskans and breaking the state's word to the oil industry – all to make it appear he was doing, darn it, what he had to do because of the Legislature's inaction.

[Gov. Walker's budget vetoes don't show courage]

He pulled off a masterful sleight of hand. He slashed the Permanent Fund dividend to $1,000, or less than half of last year's check – to save it, he said – and shortchanged the industry without doing much else. He did not even give Alaskans a kiss.

About $666 million of his "cuts" came from the half of your dividend Walker is going to keep. Another $430 million of the $1.29 billion came from oil-tax credits owed, but not yet paid. Walker deferred payment of a due tax credit bill and called it a cut. Go figure. Try that at your house and tell me how it goes. In all, $1.09 billion of the $1.29 billion in "cuts" is from those two sources.

That means about 84 percent of Walker's "cuts" come from only you and the industry – not government agencies, which went almost unscathed in some cases. Total agency reductions were about $38 million – $38 million – of a more than $4 billion operating budget for 2017.

Out of the University of Alaska's more than $1.3 billion in unrestricted general funds, Walker trimmed $95 million, a little more than 7 percent. From Education's $1.28 billion in K-12 foundation funding and K-12 pupil transportation funding? About $12 million and it still set off howls. And you wondered where the election payoff for unions was likely to be.

He cut $4.7 million earmarked for school districts and $30 million for school debt reimbursement. He lopped off $18 million for Anchorage's U-Med road project, cut the Susitna-Watana hydroelectric project and the Knik Arm Bridge. He nibbled away here and there, but the lion's share of his touted $1.29 billion in "cuts" came out of your pocket or the oil industry's.

You lost half your dividend and the industry is left holding a bag of promises worth $440 million less. Government goes on. Who could have guessed?

Walker did what politicians do – tell only part of the truth when it comes to bad news. In these times, Alaska needs straight talk – and the whole story. What it got was a magic show.

Walker pretends he expects to be a one-term governor.

Many of us would be surprised if he were not.

Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications.

Paul Jenkins

Paul Jenkins is a former Associated Press reporter, managing editor of the Anchorage Times, an editor of the Voice of the Times and former editor of the Anchorage Daily Planet.