Editorial

For years, critics of state finances have said government should run more like a business. OK, let's see how that works.

When companies are short of revenue, they first look at how to boost sales. Makes good financial sense to go out and attract more business, draw in new customers, maybe even raise prices while staying competitive.

And companies look at their expenses. Are there better ways to run the operation that would save money.

The absolutely last thing a well-run company would do is pay out more of its dwindling cash to shareholders. Higher dividends are paid from profits, not dreams. Higher dividends can force cash-short companies to borrow money. Higher dividends put short-term financial pleasure over long-term financial stability.

But that is exactly what Gov. Mike Dunleavy has proposed and continues to promote, despite the fact that the state is like a company with falling revenues and no growth.

The governor's entire plan for Alaska to balance its budget, pay for schools, troopers and other services is based first on handing out bigger Permanent Fund dividends to Alaskans who just might decide to say "thank you" by voting for the governor in his reelection bid. It was his plan when he won the job in 2018 and that's his story and he's sticking to it for 2022.

It's not vote-buying in the Chicago way of decades ago, but it's dishonest all the same. At least Chicago politicians tried to hide their tactics. Dunleavy promotes Big Fat Dividends as the mandatory first step in a long-term fiscal plan for Alaska's future, telling a reporter that the Legislature needs to take up his proposal to cram the dividend into the state constitution. Only after that, the governor said, would he "look at other things that need to be looked at."

Wouldn't a well-run company look at revenues before doubling the size of its annual dividend, as Dunleavy has proposed.

Shouldn't the governor first look to build the economy before he drains the treasury? He could look to new revenues, particularly from non-residents who take jobs in the state. The Alaska Labor Department's latest analysis (2019) showed that 15% of the wages paid went to non-resident workers.

The governor could look to boosting revenues from the more than 1.5 million visitors who came to Alaska pre-pandemic and, hopefully, will return.

He could agree to support the first increase in the state motor fuel tax in half a century.

The governor could do a lot better than just campaigning on bigger dividends and figuring out later how to pay the bills. No smart company would do it that way.