Let's roll. Hello and welcome to the Must Read Alaska Show. Here you get relevant and timely content you won't find anywhere else. You can learn more by going to mustreadalaska.com. And this show can be found on YouTube, Facebook, X, and your favorite podcast site. Let's talk truth about politics, the economy, and all things Alaska. Now the host of the show, former state legislator, combat veteran, small business owner, and all-around great guy.
ben carpenter well welcome to the must be alaska show friends i'm ben carpenter your host and guide as we brave a journey of discovery together toward truth and independent thinking. Must Read Alaska exists because discovering the truth is hard. It calls upon us to be relentless in defense of common sense.
our faith in God and the exceptional values and inherent rights enshrined in our Constitution. Freedom is not free. It's not for the timid. It's not for the weak, a heart, or mind. It calls upon every one of us to be alert to daily encroachments on our liberties.
and on the grand deceptions of those seeking power and control over others. Every generation must pledge their lives, their fortunes, and their sacred honor, and we must never take our freedom for granted. We are not anti-government. We are pro-government. of the people, by the people, and for the people. And today we have the good fortune of having two individuals join us.
One is a member of the Alaska Senate, Mike Schauer, and the other is a member of the Alaska House of Representatives, Kevin McCabe. Good day to you gentlemen. Thank you for joining us on the show. Happy to be here, man. Pleased to be here. Well, I know you guys had a busy day. It wasn't as long as some, but you had a busy day with a resolution and a joint session. So we'll keep this meeting moving right along.
I reviewed a meeting here the other day that both of you were attending. Representative Cabe, you were sitting on the committee, the House State Affairs Committee. And Senator Schauer, you joined as a guest to the committee and had a good discussion about fiscal policy. And I have done some legwork and pulled some some.
clips from that committee and i thought in some cases we'll take a second bite of the apple but i wanted to play a couple of these clips and then and then have a discussion um the first one here just to to tee this up is um is one of the members asking what a long-term fiscal plan is, which is probably a good place to start. He talks about fiscal plan. What does that mean?
So other states don't have our degree of revenue volatility. We have by far the most degree of revenue volatility because of our reliance on petroleum revenue. So if you're in a state that relies on broad-based taxes, generally... you may keep reserves. There may be 5% of your budget would be a pretty typical amount, you know?
We've at times had reserves that are several times our budget and managed to blow through them in a few years because we have that volatility. So for Alaska, a fiscal plan would essentially be having... or a structurally balanced budget would be that at expected oil prices we would have a balanced budget with our statutory formulas being followed so we don't intend to follow the dividend statute then you know
we have a different dividend statute that we follow each year and that roughly balances the budget because we have that revenue volatility there may be individual years where we'll still run surpluses and deficits that's something other states generally don't have to deal with as much because The volatility of a broad-based tax versus oil revenue is just not comparable. And particularly the way we have our oil revenue is more volatile than most oil.
taxing jurisdictions because we rely on a net profits tax versus kind of, you know, I don't want to get into oil tax too much, but essentially we have a more volatile production tax than some other areas. So gentlemen, Why do you think the legislature and some Alaskans have such a hard time understanding what is meant by a long-term fiscal plan and why addressing that would be necessary?
with you uh first uh representative mccabe sure it's because they never see the money um you know the money comes out of um it's either the federal government the oil taxes um alaskans never see the money we don't pay any tax so um
It is volatile because it's oil, but Alaskans don't understand it. If we just paid everybody the royalties that we deserve and then collected income tax, we would be closer to the... to the issue and we would understand the reason states don't have this problem is because when the income tax gets too high, when the state starts spending too much, people get unelected.
And they call their representatives and their senators and they say, what are you doing? So, I mean, we've talked about that a lot, about how having... I'm not advocating for a tax, but what I am advocating for is Alaskans to have a deeper understanding of where the money comes from. I've heard lots of feedback through the years. I don't want to have to...
pay a dividend in order to have a tax or have a tax in order to pay a dividend is the right way to say it. Senator Schauer, is that missing the point if that's the position that you're at? well ben as you know we have essentially completely divorced the purpose and original intent of the permanent fund structure itself and until the year 2017 it was always what i would call pass-through funds the permanent fund earned its revenue we had a statutory formula we followed before walker
took us away from that with his veto in 2016 and the once the formulas apply there's a certain amount of money and some of it would go to savings usually and then the rest would go into that statutory dividend
On 2017, we changed it. Now it's a designated fund. So it just goes and we get to do that. Then we had the lawsuit, as you know. And now what happens is every year the courts have basically said, oh, well, you're the appropriating authority. You can just pick whatever amount you want. You don't have to follow that statute. So one of the things that we have now found ourselves in, because we have blown through the better part of $30 billion.
that were in our various savings accounts cbr sbr and era although 8 billion of that went to inflation proofing there's still the better part of 20 billion dollars that we have spent in the last about 12 years of savings gone
And while we've done that, we've grown government. And I think, Ben, what really bothers some people is that what we have done is that was the low-hanging fruit. And it was easy to go after that money, like Kevin said. Nobody saw it. It didn't affect anybody's wallet other than a reduced dividend.
And we've been paying for ever bigger government. So the fact that we are not tied from the permanent finance earnings to the PFD, the fact that we are not tied for how much we spend for state government to actually somebody seeing it come out of their wallet because of this big divorce of how this works.
Jay Hammond had his militant ring. I know Kevin talked about that in the committee hearing the other night. But because of that, there's really no way for us to... stop that spend if you will until we get to where we are today which i know you're going to talk about which is we've now spent our savings down we are now
in real deficit spending although we have been for years because we were kicking the can down the road by taking from savings but now we're at that point where we're going well what's left we don't really have the money to continue to spend in deficit so we put ourselves into heck of a square corner here Yeah, let's listen to Director Painter of the Legislative Finance Division describe what the...
structural deficit actually is budget kind of illustrates the structural budget deficit because he has a statutory permanent fund dividend which the state has not actually paid out in nearly a decade but putting in the budget here allows you to see what the deficit looks like when you pay one so with the governor's budget and the statutory dividend, the deficit is about 1.65 billion. So, you know, that's, there's about $3 billion in the constitutional budget reserve. So if you.
drew it from there, which is his proposal, you'd be drawing more than half of the CBR to fill the FY26 deficit. You know, I mentioned on the last slide that essentially we've run relatively balanced budgets the last since the PMV era. That's essentially been the legislature figuring it out year to year through. you know changing the pfd formula changing the um capital budget amount to kind of match our available revenue without having a particular fiscal plan that's just sort of an ad hoc um
You know, as I've called it, the muddle through fiscal plan. That's sort of what we've had since FY19, where we've roughly balanced the budget, but we haven't had any sort of plan. So we still have the structural deficit if you paid the full statutory pay. So that's an interesting, I mean, this is a current fiscal year where Director Painter is pointing out that we've got a deficit and then next year is still a deficit. And what has happened over the last decade is...
more and more of the permanent fund dividend has gotten consumed to pay for state government. And now there's a proposition in the legislature to... protect, I'm using air quotes here, protect the permanent fund by allowing the legislature to spend from the fund and roll the ERA, the earnings reserve account into the corpus of the fund. How is this not
just opening up the permanent fund as a piggy bank, just like the CBR, just like the SBR have been for us over the last decade or so. Senator Schauer. All right, I'll start on that one. So, you know, I went to the trustee meeting we had a few weeks ago, had some interesting conversations. This comes off of trustee paper 10 for those that may want to go look at the permanent fund corporation and read about it. And others have had this proposal for some time.
Like you, Ben, I have a concern that once we do this, we put it under the POMV, the percent of market value draw with this one silo, if you will. Everything's into that one fund. And they limit it with the statutory draw rate. I think the current number is about 5%, you know, plus or minus. us different proposals. If you constitutionalized it and said it could only be X amount and you couldn't tap into it without a constitutional vote, a three quarters requirement, or even a vote of the people.
i guess you could say you would have some protection but the concern i have is once you do that like you said and the rate of spending growth that we have what happens when they decide well we've now taken all of the money that was left available for a dividend because we've now taken most of it there's not that much left
Once we hit that point in a couple of years, which we're rapidly heading towards, what happens then? How are they going to pay the bills? Because we have obligations. And if that is the only thing left and there's no taxes that we have raised to pay those bills, Your only choice is to crack into that fund. There literally is no other money. So what will happen? And that is a very important question you're asking. What will future legislators do to balance the budget? I simply don't know.
represent mccabe perspective yeah that's the pain point right i mean that's why governor hammond I mean, the dividend is great. It was established to benefit us so that we all get a share of our wealth. But at the end of the day, Governor Hammond knew best. He knew exactly what he was doing when he said. You know, taking the dividend will activate the militant ring of Alaskans and they will put a stop to legislative spending because the next place we're going may not be when I'm there.
But within the next years, two years, three years, you're going to see a move to crack open the corpus. Right now, there's about $80 billion into it and in it. And frankly, that's all we will have to pay with. And I think it would be a shame to drain that. We proved that we could drain 17 billion of that in about five years. So, you know, extrapolating that would mean, you know, in less than a decade.
Or two, we would be broke unless we figured out a way to get more revenue or some sort of resource development. Natural gas, maybe. I'd like to... turn over to the State Affairs Committee here and just a quick clip here of actually Senator Schauer talking specifically about the savings that we've spent.
run our savings down we all know it and the cbr sbr total the highest number when they were combined was 2013 about 16 17 billion ballpark numbers the era had in 2018 was a high year a little over 13 billion added up it was almost 30 billion dollars right and we did do two four billion dollar ahead payments for inflation proofing but even if you take that out of the equation the cbr and the era down are just to a few billion dollars each
So what that means is we've been kicking the can down the road on this game and playing it for over a decade and spending more than we're taking in. It's something we've been talking about for some time. And I don't see how anybody can not acknowledge the fact we're spending more than we take in. So how can the conversation just be about raising revenue?
If it's so very clearly that the government continues to grow, why is it that the legislature refuses to have a conversation about trimming the... Trimming the spend down so that we don't have to raise taxes. Who runs the state, Ben? Is it the private sector? Is it the citizens? Or is it the big unions?
Per capita, we have the most government workers in the nation as a state. The public sector unions and unions in general in this state are very powerful. They have a lot of money, a lot of lobbying influence. words tell me that if you don't spend government money tax money you don't have a constituency that's going to come out regularly vote for you and support you we've seen this time and time again
And you may remember a couple of years ago, I gave you a chart of the Senate and you were looking for one in the House. And it showed who was actually in the private sector. And at the time, there was only two of us. Out of 20 in the Senate, they were actually tied by working a private sector job. Everybody else was wealthy or retired or did some kind of government thing in the off years. In other words, how much of this legislature is tied to the private sector?
How much do we seem to care about it? We never talk about the private sector. It's always about the public sector here. Every concern is about the public sector, about we've got to take care of the public sector, got to take care of the government.
We're not really sure about what's happening in the private sector, but you've made the point yourself. If we don't grow the economy where the money comes from, it's going to be really hard to have a public sector because we're going to run ourselves out of money. My point to you to answer your question is that it is hard here because there are too many people tied to the public sector and the government and not nearly enough people tied to or dependent upon the private sector.
Therefore, that's what your focus in the legislature has been is all about the government. That's what I see. Representative McCabe, I'm going to play another clip here that I think does perfectly with this this this topic here. And this is of you in the committee. Look at that first. The conservative Republicans and all of us, we need...
We should ask ourselves, and frankly, this came from another member of the working group that's listening to us. We should begin asking ourselves, is a state government funded by the permanent fund earnings, federal funds, and oil revenue? going to protect our individual liberties for citizens who have no financial responsibility for paying for the programs that they demand of their government.
So this is something we discussed a lot, right? I mean, what I just read to you is socialism, 100% socialism, right? Government's responsible for everything. Citizens don't pay for anything. If you look at the cities and the people that don't have a fiscal policy working group, What they do have is a group of taxpayers who are going to unelect their officials pretty darn quickly if the taxes are not spent wisely, right? And we don't have that right now. We fund our entire government from oil.
from the permanent fund, from the federal government. We don't see any of it. So it's really easy to demand, sorry, but I'll rip the bandaid off, to demand a $1,800 PFD. I'm sorry, BSA or PFD. You can use either one. Yeah, they're interchangeable. They both come from UGF. Well, they didn't used to, but point being is where's the money going to come from? Yeah. Where's the money going to come from? Is there, as we represent McCabe, as we fight over the immediate budget every year, are we at risk?
losing or losing sight of the bigger picture here? Like we fight over the dollars, but are we even thinking, stopping to think about what happens with our individual liberties and our freedom down the road? When the eventuality of a government funded by the permanent fund doesn't need us and it just grows to the size of the permanent fund. Are we losing sight of the risk that that is to personal liberty?
Right, 100%. I believe so. I mean, the smaller the government, the more the liberty, right? That's been proven. Dunleavy signed a bill of mine, and he said with this signature, Alaskans get a little bit more liberty. That's what we should be fighting for. Less government is more liberty. I understand that we need roads plowed and we need law enforcement and we need fire stations and all that stuff for the common good. Totally, totally understand that.
But if you consider, I mean, just look at the school districts, how many school administrators and assistant administrators and secretaries and staffers do we need? Or do we just need one administrator, one secretary, maybe a couple of? finance people and teachers you know so the more we build out this big huge government absolutely the less liberty we have look at i mean We're dealing with it now with what we call the Metropolitan Planning Organizations and the DOT. So we have built these big.
mpos that they're called and they use federal funds and they plan different projects and if you get the wrong people in there all of a sudden they're just planning trails and Cities where everything is and what has happened. I mean, you have somebody in there that's doing what we don't really want. We don't want our individual liberties. We don't want to be crammed into cities. We want to do...
and be sort of what we are. And the more government we put in, the more chances that they're going to impact our liberties. And all it takes is money and we have plenty of it. We're just got to get into that. Permanent fund. Hey, Ben, may I add a point here? Yeah, Mike, jump in. You were unfairly targeted during your campaign a couple of years, you know, not too long ago, it wasn't years ago, but not too long ago about supporting taxes.
And because you had passed something out of the Ways and Means Committee when you were running it. And I think it's really important that we acknowledge that you, Kevin, myself, others that were part of the Fiscal Policy Working Group and those that are.
Even those that aren't, you know, on the other side of the aisle, there are some that agree with us on this because we had a group of folks that eventually stepped to the middle as we talked about. But I think it's very important to acknowledge and to get to the people that are listening that not one of us, not you, not Kevin, myself and other.
Republicans at least, and there were certainly Democrats that want taxes, ever agreed to taxes. Because we've talked about this over and over again. And like I said, that's why I think it's important to point out, like you were unfairly targeted during your campaign to make political points. None of us agree to taxes unless it was part of an overall comprehensive fiscal policy that also had caps to spending.
so that in the future we would not be able to exceed our available income right available tax revenue to us and had things like the sunset commission or doge commission something that was going to over time have the authority and teeth to bring down the cost of government that was the plan And I keep hearing this. You ask the question. I keep hearing this discussion about taxes and what we're going to do. Well, a whole lot of us don't want taxes.
We may agree to taxes eventually to help balance the budget, but it has to be part of a package that has these other things. Why would Kevin or myself or you or anybody with any common sense? Ever vote for more taxes right now because all we're going to do, you might as well throw it out the window. They're just going to spend every penny we get until we figure out a better plan.
And that's what we don't have. And that's where I think you see the frustration. But I wanted that to be real clear based on your question, because even you kind of suffered, like I said, from it being misrepresented unfairly, your position. If listeners are... listening to this conversation and want to know where the kind of the impetus for this conversation came from, they can go to the House State Affairs Committee for yesterday, which was the 18th, March 18th.
and watch that on the akleg.gov website. You can find a link to the recording of the committee meeting. But I think it's instructive because we... We discussed, the committee discussed, and both of you are fiscal policy working group members and another member called in and were discussing the fiscal policy working group that met in 2021. And the whole point of...
the reason the impetus and the creation of the fiscal policy working group was a compromise to avert a government shutdown. And I know that in the committee meeting, one of the representatives asked, well, You know, something about the pain. Do we just need to go through pain in order or what kind of pain needs to be gone through in order to to make change happen? Right. To implement these recommendations from the fiscal policy working group.
I'm thinking to myself, well, in 21, we had a lot of pain. We were facing a government shutdown. The best that we could do in a compromise was have a working group to talk about it. And now, years later, we've not done anything. The legislature has not done anything to implement any of the recommendations from the Fiscal Policy Working Group or any other recommendations. They're just continuing down business as usual.
In the committee, one of the representatives asked a very legitimate question, and I'm going to play that now here for us. As a comprehensive solution must be negotiated and agreed to as whole, not be taken up one part at a time. In my mind, that's going to take a lot of trust because of the single subject rule. It's not like all of these things can be in one bill. So we have to have.
have the leadership and the trust to put the package together and put it through both bodies. What am I missing? Is that like, what would it take to do that? Am I reading that right? Hey, KT, I'd love to hear from you too. So that's the million dollar question, right? What is it going to take to get the legislature to move on? fixing the structural problem that causes the perpetual fight that we have financially. What is it going to take? What do you think, Representative Cabe?
Well, remember the pain it took to get to the fiscal policy working group. I mean, that was the year of four special sessions, right? And we went so long before we got to the budget that it was going to shut the government down. And they wanted a two-thirds vote or whatever from the minority, and we wouldn't give it to them.
I remember Speaker Stutes held the budget up for three days and all the lobbyists got to work lobbying everybody. We had a pretty good chance of shutting down the government. um that was the pain it took to get the fiscal policy working group in place and since then the pain has lessened because we have had savings to dip into still and we found other ways to
continue to run the government, such as taking everybody's PFD. And so we don't have the pain like we had back then. So I think it's going to take pain actually to get to where we need to go. The pieces are all in place. The spending cap is there. Kauffman's got a bill. Your HGR-7, we can resurrect that in a heartbeat for a constitutionalized PFD.
All of those were all in play together. And we agreed as a group that they all had to march forward somehow together. We couldn't just cherry pick one. I think Representative Hemshoot was alluding to a bigger problem. And obviously, neither of you individuals are in her caucus because she's in the House Majority Caucus. So I don't know what's going on behind closed doors with their team.
But she's asking about leadership. And as I'm looking at same leaders and maybe some new faces, but in the house. The individuals that are in the leadership positions in the House have been in leadership positions before in the House in the past. In the Senate, you've got basically the same leaders that you've always had. So I guess the question is, you know.
Can we expect anything different if we're going to keep electing the same leaders? Or are we just going to run into a fiscal cliff if the same people are in charge? There's another clip that I want to play real quick, and then I'll get your take on this, Senator Schauer. And this is from the Senate. Here's Senator Hoffman from a Senate press conference that happened earlier this month.
And I say that a constitutional requirement to balance the budget. Today, we can't even balance a 680 budget given this scenario. We could potentially reduce many items. One of them may be the PFD. That still does not address the fact that we have a deficit this year of, I believe it's $140 million. So we aren't even paying our bills.
for this current fiscal year, and we have to come up with an additional $140 million. I would say to the other body, Before we start spending money that we don't have, we should be looking at raising money to pay for programs that we passed last year. look at those that we can pass in the future. This is our requirement. This is not a choice. This is constitutionally required. So, I mean, obviously...
Senator Hoffman's of the perspective that there's only one path forward. It's to raise revenue. Whatever we're doing in government, we must be spending the appropriate amount on it. And there's no questioning of that. Senator Schauer, if the only path forward for the leaders in the senator are raising revenue, why haven't we raised revenue already? Well, it cut out there for a second, Ben, but I guess...
When you really think about this, there's some ideological divides, of course, in the building, you know that. And there are those that are, you know, pro-tax and there are those that are anti-tax. And I think it's been pretty clear from what we've said before, we're not necessarily anti-tax. We are anti-tax. It's just going to be spent on whatever we want to spend it on with no limit, no ever consideration for where this may end or what this does to the private sector. Right.
I guess one of my questions as I look at this and I go, well, first of all, we've had that easy answer, right? We can go back and just take the dividend. And that's what we've been doing for some time. We've spent the savings. I pointed out almost $20 billion we have spent. to kick the can down there to get where we are. Well, guess what?
If we go down the tax road, what this state does every few years, we switch our tax plan up. We do something different. We whip the oil industry around. That's about a third of our money coming in. But we whip and we change the taxes here. We change it there. They never know. If you're a business owner that wants to invest. in the state of alaska whether it's oil and gas mining logging you name it whatever it is a business has to operate with some plan into the future to know stability
5, 10, 20, 25, 30 years of investment for returns, right? Especially for big projects like up on the slope. You're going to invest billions of dollars. You have to know what you're going to be facing over this.
number of years how many your returns what are your returns going to be how much are your taxes going to be a stable business environment is a good business environment that encourages investment If Alaska would enact a comprehensive fiscal policy that included not only the way to reduce government costs over time, but also show that we were going to cap it.
and it couldn't grow more than, say, for example, CPI, something that would tie it to a reasonable flight path, business would go, hey, into the future, we know Alaska is never going to spend more than this. We can invest this much. and we're going to be able to get this kind of return. We can go there. Instead, what happens? Listen to what was just said. Well, we've spent all this money, and we're going to create all these programs, and we just got to find a way to pay for it.
And guess who's going to be the one that's going to find the way after they've taken all of the dividend? Then they're going to go back to the private sector and go pay up, pay your fair share. Now, if I'm a business owner and I go, I want to invest in Alaska, what does what message does that send me? Is Alaska really open for business?
Or is Alaska a place you go and they're going to take from you everything they need to spend as much as they want? And you're never going to have stability. You're never going to be able to plan. And you're never going to know what kind of environment you deal with 5, 10, 15, 20 years down the road in Alaska. We present a...
Terrible business investment environment in this state. So why have we not raised taxes? Because we've had the low-hanging fruit to pick for a while. That's coming to an end here real soon. And then we're going to have a different discussion, which is kind of where we are today.
And keep in mind that raising revenue is a euphemism for taxes, right? And most likely, given who the speaker is, it's income taxes, because the income in Bush, Alaska is not near what the income... in anchorages so the anchorage taxes to the top 20 as some folks say will be expected to pay for those programs that are statewide but one thing that we
discovered on the Fiscal Policy Working Group, there's not enough people in Alaska to raise taxes enough to cover the structural deficit that we already have. There just is not enough people, not enough millionaires, not enough billionaires. we're left with, uh, are we going to tax the people and it's still not going to make a difference that no, not doing that. Sorry. And you're specifically talking about an income tax. Yes. Yeah.
So it's interesting that I'm trying to, you know, I'm no longer in the legislature. So I get to sit back and look and take pot shots. That's the easy thing to do. But, you know. I want to solve the problem just as much as anybody else does. And I'm looking at criticism that says, hey, we need to raise taxes. We need to raise revenue. And that's the path forward for solving the problem.
But the bills that are being put forward, like Senator Hoffman doesn't have a income tax bill being put forward. He doesn't have a sales tax bill. He doesn't have, what they do have is a tax bill for Hillcorp. which is going to generate a couple hundred million dollars. We've got a budget deficit that's $1.6 billion if we were following the statute. So this is not a solution.
This is just a Band-Aid or a political flag to wave and say, hey, we're doing the right thing. But it's not actually solving that structural deficit that we have. When our oil prices are low. So why is it that if the if the answer to both maintaining liberty. Is smaller government and a and a population. that is financially tied to its government, why is it that conservatives are not putting a path forward that says, look, we're willing to raise taxes if we're going to...
And then have the ifs. Why is it that we always coach things and say, hey, look, I'm a Republican. I'm a conservative. I'm not for taxes, but... We need to solve the problem in this other way. We need to cut. You see what I'm saying? Him shoots right. She's getting after this and she's saying, hey, where's the leadership on this? Where are we taking political risk? Now, Mike, I appreciate you pointing out that I got beat up for promoting taxes.
which is only one part of a fiscal plan that I was trying to champion. But if we're not willing to take some sort of political risk to speak truth and move it forward, then... then there isn't leadership, right? And I think that's the vacuum that we see right now, both from the House and the Senate and also from the governors, from the executive branch. There just seems to be a vacuum of leadership that is...
willing to take the political risk to solve this problem. And who pays? It's the people who lose the dividend and it's the people who lose the freedom a decade from now when we wake up and realize, whoa, heck. We don't have any taxes, but we're paying for a government through our permanent fund that puts regulations in place that we don't like and we don't pay for. And therefore, the government doesn't even really care about us.
Well, I will remind you of this, Ben, in 2021 on the Senate floor in May before we had the fiscal. Policy Working Group. I put a plan out with Alexi Painter. He helped me create it and had taxes in it. I had a sales tax. I had an oil for barrel credit tax change. I had the Sunset Commission in it for reductions.
And I had a 50-50 PFD and a spending cap. And I threw it out as an overall plan to go, hey, does this balance the budget? Yes, it did. And I said the tax work. I'm a Republican conservative from the MATSU. And here I am on the Senate floor in front of everybody in the sheets talking about taxes. Because did I take heat? I got reelected. I said it out loud because it's being the adult in the room. And then we had the fiscal policy working group shortly after that. And we all said the same thing.
We are saying that, but I think back to your question is leadership, same people. And you know what? Here's one of the results. What happens when you speak up? Well, what happened to me the last two years in the Senate? I was shoved into a three-person minority. If you speak up too loudly.
If you are too aggressive in your tone of calling out where we need to be that may make people look bad or they don't like what you're saying, or you get on the radio and they don't like what you're saying, because believe me, I get it all the time. Guess what happens to you? You get squashed.
Your voice gets taken away. Your people don't get represented because they put you in a minority, give you no committees. So was I afraid to speak out? Absolutely not. I did. But there is a consequence for that in the current structure we have.
I will tell you this is one last thing before Kevin jumps in, is that some people, in my opinion, do not want to solve the problem, Ben, because if we solve the problem, the power that they have in the legislature means they get to move the levers of power, the money. And if you take that away from them and they no longer have the ability to leverage it year after year to get what they want or to have things happen the way they want to happen, well, you've taken away their power.
If we have a comprehensive fiscal policy, that power is essentially taken out of the legislators hands and it's given back to the people by way of a government that has to live within its means. I think that scares the Dickens out of some people.
Because they would lose power. That's just my read on it after eight years here. So I managed to see what Kevin says. Yeah, so I think so as well. And I think a lot of what you're talking about, Ben, is our Alaskans are already... deeply into this sort of socialist model where everything that they have is taken care of so they don't want taxes can't hardly blame them haven't paid taxes and when did it go away like 1981 or something and
And so we haven't paid taxes in that long and we've been dependent on oil revenue. Well, now. We might not have to be, we might not be able to be dependent on oil revenues. So, you know, it's a problem of educating Alaskans and saying, and Republicans are bad at it. We're horrible at it. I've said it myself.
My base doesn't want me to talk about taxes. They don't want taxes. Well, why don't they want taxes? Who else is, how are they going to pay for the fire department, the police department? We've talked about it with the, with law enforcement in the Matsu. Remember that whole conversation.
Well, we can't have law enforcement in the Mat-Su. Everybody would be at 20 mils on their housing, on their property tax. So at some point, and it's going to be the pinch point, it's going to be just before we start into that.
corpus of the permanent fund maybe possibly republicans and conservatives will wake up and say oh wait a minute you mean the electricity doesn't come out of the plug in the wall it actually comes from a power plant oh well maybe we should put fuel in the power plant right and and so we we fail i think when we don't step up talk to our constituents take leadership roles um but
I mean, you're a classic example of what we are all not afraid of, but what will happen to us when we step too far out of line, right? Somebody will take advantage of it and beat you up over it and you'll get unelected. What we're all afraid of is the person that gets elected in your place will be worse. Yeah, I and I totally get that. I think that when I when I express my frustration and leadership.
it's natural to point that finger at the leaders that are in the, in the legislature and, and maybe just all legislators because they're the elected leaders of the state. Right. But they're the representatives that the actual boss is the people. So I opened up this discussion. I said, look, we can't take our freedom for granted. We have to continue. We, not me, not you, not just legislators. It's all of us.
have to continually pledge our lives, our fortunes, and our sacred honor to maintain that freedom. And that's really what's at stake in this battle that we're dealing with financially with the state. is setting up a system where our state government doesn't need us. It doesn't need us to pay taxes for and to pay for the largesse that some of us will demand of it.
And that leads to something similar. I mean, we've got it on display at the federal government. You've got 27% of the federal budget is being financed by debt. That means that legislators... are meeting the demand of people, of some people in the nation, by saying, you know what, I'm going to get unelected if I raise taxes. So we're going to go ahead and just pay for these services with debt. And then we don't have to go tax people.
Because it's debt. We'll pay for it later, right? I don't have to fight that battle right now. But then that just increases inflation and causes all sorts of problems down the road. And the next generation then has to pay for it. But that's the growth. The growth of the federal government has been fueled by that ability for free money, free debt money. And the state of Alaska.
facing the same thing. Now we're going to have what amounts to a bunch of free money coming from the permanent fund that will pay for government and government regulations and all of the good ideas that the good idea fairy pops up every legislative session.
and the people don't have to pay for it so why would we say no to it i just think that from a from a conservative point of view from a limited government point of view we have got to we have got to get with the program Not we as in legislators, we as in the people who have chosen to be political, but we as in all of Alaskans need to realize that if you're not engaged...
and you're not pledging your lives, your fortunes, and your sacred honor, you're not paying attention to what's happening, we are going to lose our freedom legitimately. It's a legitimate risk. Because we're setting up a system where the state government will be able to enact regulations and all sorts of state programs. And it won't be funded by the people. It'll be funded by this magic permanent fund. And good luck getting those programs ended when you don't have to pay for it.
100%, and you've seen it in the federal government. I mean, look at all the doge stuff that they've uncovered, and that's exactly what happened in the federal government. The federal government funded a bunch of stuff, and people are looking at that, and they're saying,
oh my god i never would have voted how did that get in i didn't vote for that i didn't vote for the person that put that in it's going to be the same if it's not already the same in alaska there are so many things that are funded that people don't even know about But they're going to know when their roads aren't plowed. They're already knowing. They're already understanding that in Anchorage when there's heavy snowfall and on the Glen and in Kenai when there's a heavy snowfall.
We need to put the money where it's going to do the most number of citizens the most good a need to have instead of a want to have. Oh, thanks. It's always funny when they tell us we don't pay taxes. I'm like, really? You don't pay property taxes in the state? You don't pay gasoline taxes? You don't pay sales taxes in some places? And they always talk about federal money like it's free. I'm like, you do not realize that's all of our federal tax?
money we are sending to the feds and then get back to us we may take more than we get in because of our size and infrastructure needs but the point is we're like oh well you don't pay taxes Well, would you I'd love to show you what my tax bill to the federal government was last year. It was way too big. Right. And so when people always say this, you don't pay your fair share, you don't pay taxes. That's not true. We do. However, what we're talking about here.
is the rapid growth of government with no impact to people like you said and i don't disagree with it i think ultimately that leads to government dependency it leads to the point where almost like the atlas shrugged where that's just happening out there we're all dependent upon it and we're just stuck with it there's nothing
you can do to change it very different from that i just want to be very clear because i hear that a lot from people when they say well you're not paying your fair share you know etc i'm like yeah we are we're still paying taxes alaska is just a different model because of its size but that doesn't mean as this moves on, that we don't find a way to close that loop. Whatever that may be, I don't know. I've said I could support a sales tax.
I'm very concerned about an income tax because of how that goes and what it does, progressive versus regressive on the two different types of taxes. But frankly... If we're going to have a solution, almost like the fiscal policy working group, and we discussed this in that group, everybody has to have some skin in the game.
And whether that be the sales tax or the other things, everybody needs some skin in the game. And I mean everybody. I'm talking the people. I'm talking the private sector. I'm talking the public sector. I'm talking the oil and gas and mining and other companies that would do business here and extract our resources.
should contribute to this because like you said then if everybody has some skin in the game everybody suffers a little bit when the price of government goes up and up and up that gets us invested in what happens in our government and if we just divorce ourselves from that
Like we talked about a while ago, divorcing ourselves from the permanent fund purpose and the dividend and the fact that it just went away as it did. Well, this is where we are. And now all of a sudden there is no tie to it anymore. So people just look and go, I don't care. Whatever they do, they do. And it doesn't affect me until it does.
And then, like you said, it's probably too late by that point. It's two separate problems, right? You've got the numbers problem, the money problem or the math problem that's relatively easy to solve. You've just which which choices do you want to pick to make the balance happen? But it's the political problem above it that.
is kind of stopping the conversation from happening at all. And those individuals who do step up and say, hey, look, we need to have this conversation. I'm putting myself in that category. I'm not in the legislature right now because enough people said, you know what? I don't really trust Ben. I want the other guy who's going to tickle my ears and tell me I'm going to get a whole bunch of stuff from him.
We're going to put him in office. And they don't even recognize the political problem. So why? Why would I step up? I want to encourage you guys. Be that leader and be that force for change. Step up and be vocal. But at the same time, you need to have backing from the rest of Alaskans. who are vocal about it to say hey no this guy's right you need to listen to him it can't just be the the you know hey uh fighter pilot it can't just be the heat-seeking missile
Pickle Mike Shower, send him after the problem, and then we can forget about it. He'll just take care of it for us. Well, you need some backup, right? You can't just be... can't be the heat-seeking missile to the problem. We need all of the concerned electorate support to address this political problem. So anyway, guys, I am so...
So thankful that you joined me this evening and having this conversation. It's about almost an hour into the conversation here. And I know it's late and you guys had a long day. I appreciate your opportunity. Do either of you have any closing words, thoughts that are just desperately trying to bubble out?
No, Ben, thanks for putting this together. Thanks for all the clips and stuff and the conversation. We need to do this more often. The one thing I would say is, you know, people having skin in the game, it also means you have a voice in the game. Right now, when somebody says, well, I pay my taxes, legislators just kind of laugh at them because you don't pay any state taxes. But when you do start having state taxes.
Now you have a voice. Now you can go to your legislature or legislator and demand, no, I don't want you to invest in that program, whatever DEI, ESG. You know, you can't vote for this and you have skin in the game and you have a voice. We need to get back to that style of government.
I have just two comments here, Ben. One of them is, and we saw this in the vote on the floor today in the debate over the governor's stand of the Department of Agriculture. Everybody seemed to agree with having it. Everybody thought it was a great idea.
And yet they're like, no, no, no, but we need to slow the process down and we need to study it some more and we need to have a working group and we've got these bills. Well, you and I both know what that means. They've been working on it for four years. The governor funded the working group, set it up years ago.
We're going to study and do nothing. It's no different than the physical policy working group that's been collecting dust for four years. We've done nothing. So the point is, the more we study, we just never end up solving the problem before it's too late.
And the last point I would make is we were talking about the people a minute ago and changing folks out. We've changed out most of the legislature since I've been here, probably 75% of it. Some of the older folks that have been around for a long time were kind of there until they decided to get out because those districts... just keep voting for them. But I will point out that in our system of government, the way it sets up, especially in Alaska,
which is very different from the federal government and sitting with Senator Sullivan tonight. We had a chance to sit with him for a while before he has a speech tomorrow. He asked me the question he asked, Mike, what's going on with this place?
He's like, you have more Republicans in the House and the Senate, and yet the Democrats are in charge. What in the world is that this would never happen in D.C.? They would be shunned immediately and persona non grata. And like, I don't know, Dan, maybe you can talk to the folks and encourage them to join the Republican. colleagues because it's always and you point this out it's always one or two or three people
That's all it takes to swing the balance of power because we're so close. So if one or two people decide, you know what, I'm going to go join with the Democrats because I'm going to get to be Senate president or speaker or whatever it is or finance coach or then they do it. How you solve that, I don't really know because.
There doesn't seem to be consequences for people that play that game every year. And year after year, Republicans and conservatives get disappointed because they send a majority down to the legislature and then watch the Democrats continue to control. That is frustrating beyond all measure.
But it is a vexing problem. I'm not really sure how we fix it. I just wanted to throw that out there because people always ask why. Even one of our U.S. senators asked me why in the office this afternoon to which I've been struggling. going, Dan, I have no idea. It is crazy when you talk to state legislators from other states and they can't understand. They're like, wait, a majority of Republicans were elected, but Republicans are not the majority?
Like that doesn't make, doesn't make sense. You know, I watched the floor session today and I made a note afterwards and I, you know, this, it defies logic because the thing broke down and it wasn't a. along party lines, right? The vote wasn't. But what it did show was the political elite. And I say that with respect to people who are pro-government, pro-big government.
solutions, right? And they just said in their vote and in their words, they said, we're in favor of agriculture in Alaska. We're even in favor of a department of agriculture, right? But we're in control. Right. Governor's not in control. Right. We're going to do it our way, which is to say we probably won't prioritize it and won't do it. It'll cost more.
I look forward. They said it was so important today. They were going to move a bill. I'm looking forward to how fast both majorities are going to zip a bill through this year so we have a department of bad because that's what I've heard on the floor. So I'm hoping I'm going to see that from them. We'll just sit back and watch. Yeah.
More so than anything, I just see that the arrogance of people who think that government is going to be the solution to all of the problems that we have, and therefore we're going to use our power. to make sure that that carries the day. And compromise be damned. And not only government, but the legislature today said very clearly, hey, we're in charge, just like you said.
It's total Dunleavy derangement syndrome. They don't want the governor to have a win. Mike said that out loud. Everybody else was sort of afraid to, except Calvin Troggie kind of said it. But they don't want... you know even though he's the executive we have a the strongest form of governor in the state in the united states i believe a strong governorship it's the way it's supposed to be he should be able to make these changes to his cabinet that he wants and here we are telling him no
So what are we going to do? We'll probably put in a bill. You know, it's going to be really interesting to see how much the fiscal note for the bill that they put in is compared to what we had with this EO.
It'll be fun to watch that. I was listening to the left of center legislators in their speeches, and they were most certainly more... interested in more spending for that department of ag than i would be comfortable with or and that i'm sure that you would be so i'm i i completely agree we'll probably have if the bill actually makes it through we'll have a reversal of conversation
amongst the members uh here in i don't know very clearly the fiscal note was a problem it could be 2.7 it could be nine million dollars to which you may have caught that I did a little math in public, Arthur, and I threw that out on the floor. I saw that, Mike. That was pretty sweet.
It was about three hours or less, two to three hours of one days of the state's operation we're talking about as they just sent a quarter of a billion dollar education bill across the hall and didn't even blink. Don't tell me money's the problem here, folks. The Alaskans are not that naive. Come on. We got to do better. Yeah. Yeah. Well, guys, we need to call it an evening. I know the three of us could keep talking.
Long into the night. So thank you for joining me on the Mustery Alaska show. Listen, if you're listening to the show and you like what you heard, you want to support. the effort to bring truth and conservative values to light, then go to mustreadalaska.com, click on the donate link, help us keep the lights on. It's much appreciated. And again,
If we're not consistently pledging our lives, our fortunes, and our sacred honor to maintain the freedom in our country, then we will lose it. It is just a matter of time before it is taken from us, and we will have ceded it. Ronald Reagan knew it. He said that it's only one generation away. So what are you doing this generation to keep that safety, to keep that freedom alive? So I'm Ben Carpenter for the Must Read Alaska Show. Thanks for joining us. Stay frosty out there.