The Path Chosen: Spend Less, More Liberty

Future generations will thrive or suffer based on whether our elected leaders choose the path of individual liberty or choose to grow government. I have consistently chosen more liberty through less government as Alaska’s future.

From 2010 forward, I have set and enforced spending limits on legislative appropriations. In 2010 and 2011, when the “bipartisan senate majority” would not join me in adhering to a spending limit, I vetoed the largest amounts of state spending in Alaska history. With more fiscally conservative majorities in 2013 and 2014, I led and worked with legislators on record spending reductions, cutting $1 billion from state spending in 2013 and another $1.1 billion in 2014.

As Governor, I tackled the big revenue and expense issues in our budget, first. These were not easy to resolve, but they were the areas in which we could make the biggest impact – increasing revenue through oil tax reform, decreasing spending and public debt, and curtailing future obligations.

I fought to arrest declining oil production and declining revenue from oil to better secure our future through oil tax reform. No matter what oil prices are, if the number of barrels flowing through the pipeline keeps falling, a high tax rate will correspondingly draw less and less revenue to Alaska. Already, this tax reform is working; companies are producing more than 8,500 barrels of oil more per day and have announced billions of dollars of new investment.

My tax reform also protected the state treasury at lower oil prices. At today’s oil prices, Alaska would collect over $150 million more per year than under ACES. I also ended an ACES provision that gave tax credits for spending that did not lead to new production. Now, those tax credits are linked to new production. This action is expected to save the state several hundred million dollars per year going forward.

While shoring up the state’s revenue stream with more oilfield work, I addressed the biggest cost driver of the state’s operating budget:; the state’s unfunded obligation to retiree pensions. Working with the Legislature, we paid down the debt by $3 billion and reduced the state’s annual payment obligation on the debt by several hundred million dollars per year going forward. This is another financial move I led that means the state’s operating budget will be reduced by hundreds of millions of dollars each year.

In addition to these steps, I have refused, despite heavy pressure, to allow additional general obligation bonds, which increase annual debt payments and increases the operating budget. These were key first steps in bringing Alaska’s budget to a more sustainable point – what I call “living within our means.”

In addition to big, responsible financial moves with the people’s money, I’ve taken action during my administration to make smaller, but no less valuable, cuts. I’ve done this while making sure Alaska maintains a stellar Triple A credit rating, and we’ve nearly doubled state savings – excluding the Permanent Fund – during my administration.

For example, we’ve made smaller, but no less important, reductions:

*We took a tougher stance in labor negotiations to keep ongoing increases within a slim 1% range, and we’ve reduced built-in longevity increases;

*I’ve directed state agencies to absorb salary increases (cost of living adjustments), for savings of about $40 million per year; and

*The Department of Natural Resources moved to an electronic recording system for property transactions, reducing the cost of state offices.

Going forward, my budget plan focuses on our Constitutional priorities – especially public safety. I look forward to working again with a Republican-led Legislature to continue driving down spending.

I believe that private sector investment is better than government spending. My economic policies are geared toward economic growth and opportunities for Alaskans in the private sector. During my administration, Alaska has enjoyed 5,000 new business license applications, and unemployment is lower today than in recent years. More than 16,000 new jobs have been created by Alaskans under my policies, and construction activity is projected to be 18% more this year, even with a reduction in state capital budgets.

My opponent, Bill Walker, is pledging a one-time, 16% budget cut – without offering a plan, or even a clue, as to where this number came from. In one forum, Mr. Walker says education funding is “‘on the table”’ for cuts, but in front of other interest groups, he promises to increase education funding by hundreds of millions of dollars through a BSA increase and inflation-proofing. He also said Medicaid is “‘on the table”’ for cuts, but in other places, says he’ll increase Medicaid spending by adopting Obamacare’s Medicaid expansion. We need a governor who has experience reducing the budget – and one who walks his talk.

A governor cannot be double-minded and tell one group he will spend less, and then tell another group he will spend more.

My pledge to Alaskans is that we will continue reducing the state budget so individual Alaskans’ liberty and economic opportunity can grow. I will remain the same steady, consistent governor Alaskans can count on.