When Republican Mike Dunleavy was elected governor in November, he became the sixth person to win the job in as many elections. That alone doesn’t necessarily translate into poor management. Virginia, which has the nation’s only single-term limit for governors, is one of the best-run states. But the failure in Alaska to reelect a governor since the 1990s has made it harder to address its ongoing budget problems, driven by a dependence on oil for the lion’s share of its revenues. “Of course it’s been disruptive,” says Gerald McBeath, a retired University of Alaska political scientist, “primarily because of the inability to reach agreement and consistency on a long-term fiscal plan.”
Dunleavy succeeds Bill Walker, an independent who was among the least popular governors in the country. A couple of weeks before the election, Walker suspended his campaign because it was clear he couldn’t win. Walker was the first Alaska governor to cut the state’s Permanent Fund dividend, the checks written to residents out of the state’s oil income. He also expanded Medicaid, taking on additional costs at a time when revenues had been hurt badly by a steep decline in oil prices. His attempts to tax income, fuel and liquor went nowhere in the legislature. By 2017, Alaska’s credit rating was lower than that of any other state except Illinois and New Jersey, although it bounced back a bit last year.
Alaska doesn’t tax sales or income at all, and also lacks a meaningful property tax at the state level. When oil prices dip, it causes panic at the Capitol in Juneau. “When they’ve tried to cut things, governors have been punished for doing that,” says Democratic state Sen. Bill Wielechowski. “And when they haven’t cut, they’ve been punished for that.”
He’s right. Walker’s difficulties were extreme, but his predecessors had failed to smooth out the state budget to account for the state’s boom and bust economy. Frank Murkowski, who was elected in 2002, ran into trouble by cutting services for seniors and other programs that were popular with the public. Sarah Palin, who unseated Murkowski in a GOP primary, presided over a boom time and could have won reelection, but she resigned in the middle of her term. Her successor, Sean Parnell, rode the wave of prosperity and won a full term on his own, but a series of scandals led to his narrow defeat by Walker in 2014.
Dunleavy promises to protect the Permanent Fund while addressing deficits with reductions in spending. That might prove to be the right medicine, but it doesn’t mean the politics will be easy. The state’s projected shortfall is north of $2 billion and, after a long period of coalition government, it’s not clear that Republicans in the legislature have working majorities in place to pass a budget.
Republicans dominate the state, but the difficulties they’ve long faced in addressing the budget’s enduring imbalances have kept Alaska governors from lasting very long on the job. “In a lot of these elections, people have made promises they just can’t keep,” Wielechowski says. “Then the electorate holds them accountable.”
