Spending and what alaska can provide to the nation as an example. Elected as governor in 2018 keys had a varied career since his arrival there in 1983 from working in a logging camp in Southeast Alaska to pursuing his dream and an Education Career as a teacher. He has a unique insight into alaskas communities due to his two decades of service to. He also served for five years and knows alaska literally from coast to coast and that provides only a not only a unique perspective but also what we can learn from alaskas example. As all of us at the Heritage Foundation no americas Founding Fathers envisioned a Strong Division of power between federathefederal and state levef government what we call federalism. The constitution created a limited federal government and with mucleft much of the power e states and to the people of the United States. But of course what exists today is that we have created a highly centralized federal government and the states are relinquishing much of their power into the federal government and to also the federal funding. This is allowing them to become more involved in issues that would be left to states and local communities and this highly centralized government is a poor fit for a country as large and as diverse a south america. Federalism should allow for 50 different models of governance suited to the particular needs of the nations individual states. Within the confines of the constitution, the state should be free to enact policies that best serve the needs of their citizens and with this respect federalism fosters Competition Among the states and competition between states encourages innovation and helps create a more efficient government. As a general principle, the government closest to a problem should be the one addressing it in our humble opinion and for that reason we believe the congress should lead to the program that doesnt carry out a constitutional function of the federal government. The governor will speak with us this morning about the successes that alaska has had in promoting federalism through budget discipline as well as with the federal government may learn from alaskas experience. And after the governors remarks, paul winfree who is our director of the institute for Economic Policy studies will lead. Now please join me in welcoming governor mike. [applause] thank you for the kind words and it is an honor to be here today. Im going to talk a little but about alaska and ask you to raise your hand if youve ever been to alaska but i wont do that. If you havent, you need to come up. Its a beautiful state. I can tell you how nice it is to spend time with likeminded friend here in the nations capital. Anytime i consider the difficulties of balancing the budget immi and that it could be a lot worse. I could be tasked with balancing the federal budget. That is the mother of all challenges. Thank you all for the work you do try to accomplish the important goal, fiscal policy in our federal issues. For those of you i havent met yet, i was elected as the 12 governor and was the first governor to be sworn in. We of course ar of course were e secondbiggest statare thesecone nation just for reference, a wagering union in 1959 and 600,000 square miles of land mass alaska isnt just the largest state with one of the largest subcontinent of the western hemisphere to put it in perspective. Over half call the unorganized borough and i joke around with texas because alaska is two and a half times the size of texas, four time zones where the furthest western state, furthest northern and eastern. We are so far west we are closer to australia and california. A lot of people have a hard time getting their arms around that. Subwoofer have fiscal the unorganized Bureau Meeting residents lived outside of the form of government. Itit didnt alaska term for counties. We have the rose and the rest of the country is counties. It createit creates a delicate n for policymakers. We constantly strive to balance the big City Residents with those that without in some kindd of the middle of nowhere. Then we have hundreds of smaller communities of the census designated areas and alaska natives and modernday. In fact only one member of our congressional delegation was actually born in alaska. Of course i didnt come here today to recite alaska facts although i could do that for some time. I love this great state. I came here to talk about fiscal policy, something ive been told interests all of you. In the midst of a financial meltdown in alaska after years of inaction the end of the deficit climbed to 1. 6 billion to put this in perspective we are talking state spending, its approximately 4. 4 to 4. 6 million for this is a significant budget deficit. And keep in mind we are expected to bring in about 2. 1 billion in revenue this year come, the deft of this magnitude than unzipping. Theres alsthere is also an enty predictable crisis. From 2014 to 2016, the price plummeted from 110 to just 30 a barrel. From the peak of 4 million the state revenues collapsed to 750 million. Rather than states using revenue projections, the state Political Leadership chosstate politicalle their spending during this time. Exaggerated revenue estimates and clever budgeting gimmicks became commonplace allowing appropriations to hide the true extent of the crisis from the public. This policy of inaction and deception proved to be an unmitigated disaster. Fobut thisfor the first time wee forced to dip into the savings account called the Permanent Fund. Just to keep the lights on. Meanwhile gdp growth stalled and it became known as the worst state for business in america. I ran for governor because i, like most alaskans, believe in the states decline had to be reversed. Theres simply no reason for a state is rich in Natural Resources and pioneer experience to be the worst in anything. Anything. To this and i bega end i began t term by directing a staff to publish a transparent and honest assessment of financial assessments. No more disinformation, no more time to stall. With some of the states fixed spending politicians but decided to ignore these i utilized my cover. The largest Budget Reduction in the States History and a critical First Step Towards getting alaska back on track. My critics predicted doomsday and figured alaska was the end of alaska and would slide off into the Pacific Ocean but they couldnt have been more wrong. According to the economists, our recession is finally coming to an end, our gdp increased by 4. 1 last quarter, the second consecutive quarter of economic growth, thousands of new jobs have been created to cost practically every sector of the economy and privatesector wages grew by nearly 5 . When projecting 1. 1 billion increase in private investment on this here and they have so much going for it in addition to this. A lot of people down here call this lower 48 and believe our state is that place with a lot of oil. That is true but its only a sliver of the real story. I always told folks of alaska is america and so much more. Its a place you can open business, ceo of benefits and protections of the first world system of governance, and at the same time have access to untapped Natural Resources that simply dont exist outside of the third world. Im talking about the largest deposit on the planet, the resource currently monopolized by china, endowments of nearly every precious earth know there is an estimated half of the nations coal, the largest wild fisheries industry in the nation totaling 61 of all fish land in the u. S. , one seventh of the nations timbre although federal regulations have tragically crippled promoting industryleading much to fall down. It is a wasted resource right now. We are also located quite literally in the center of the industrialized world and this is often the fact people have a hard time getting their arms around us while the International Airport and and encourages positioned within nine hours of new york and tokyo and serves as a gateway to the asiapacific markets. In terms of cargo throughput, it is the second to the International Airpor airport ans second only to then this nationally and ranks as a fifth busiest on the planet and its growing rapidlitsgrowing rapidf transport. Now believe it or not, it is never closed for snow i despite filing is but a 6 million tons of each winter, alaska does a good job of dealing with snow. In fact aviation is one industry that we expect will be a big part of the economic future. One in every 60 as a pilot, many who fly the busiest seaplan seae based and they designate a portion for unmanned flight research. This area is currently being used by organizations like boeing and the university of alaska. Research has led to breakthroughs. Plans are also in the works of connect alaska to the lower 48 with 1500 my old railroad link opening the trade routes to asia in addition to benefiting alaska refineries. The doors are always open to innovators and dreamers and in fact you might have seen the reaching out last week regarding production of the teslas fire truck. They have grounds in alaska and we want to invite him to come to learn more about how we produce resources and minerals and how we do is probably better than any other place in the world. These are the types of forward thinking people that we are eager to collaborate with but despite my optimism for the future, the challenge is balancing the budget. This year we again staged a major shortfall of 1. 5 million. Some of it can be traced back to the price of oil which is expected to fall another 10 million over the next few years. And to some of it is due to the formula driven spending that increased by 89 alien including death, pension payments and totaling over 160 million which is driving the budget upward. In fact over half consists of the formulas and obligations that are in the statute. I announced my plan to keep alaska tiscali solid and this years budget consists of the overarching priority is to maintain fiscal discipline, honor the law, till alaska the truth and fulfill the commitments i made when i ran for governor. These are not just my priority is by the way, they are based on feedback i received from folks across alaska. These are a lasting priority is. Alaskan priority is. Of course im preaching to the choir and it comes to maintaining fiscal discipline. There is a real sense for my opponents of man have many peopo longer understand the dangers of the deficit spending. Much of this i attribute to the influence of washington, d. C. In this culture. Given the sources like twitter helped amplify the National Politics with the dead spending by both parties is commonplace. Borrowing bac back by the treass task printing machine seems a little. Unfortunately, i cant find the machine. Fortunately or unfortunately, we are having to balance our budget and alaska. The revenue front and the funds that had over 6 billion on reserve funds, savings account at 16 million at the end of 2013 will merely be depleted after this here as a result of the deficit spending. This years budget represents the first in the plan to contain spending and cut the annual deficit. Most will be flat funded and there will be no net spending increase was the budget i will do. This is also a budget that will honor the law and alaska will have something called the Permanent Fund. Its a Sovereign Wealth Fund distributed to the dividends as well as the state states only w for future generations of alaskan and distribute an annual check to alaska to help add the check and balance on government spending. The more money you save its constitutionally protected with opportunities for politicians to get their hands on it. In recent years politicians ignore the law in favor to a portion of the dividend to fuel government spending. This is all wrong and its also bad policy. I dare t to meet anyone that believes the government spends money better than individuals citizens. I even believe the folks on the left dont believe this policy. Why would you call for the search for a dividend and repayment of the payoff and secondly we fully funded education. Before joining the legislature i worked as a teacher and later as a zipper and then for two decades in alaska. Afterwards i spent a couple more years in the schools when familiar with the struggles of the educators. Both from the teaching and administrative perspective. You cannot move forward a as a state by leaving our children behind, but it can just be about and what and how much money you put into the system it also has to be about output, how well our kids are doing. Finally i will do my best to change the wall that is crippling the budget as i eluded to it a few minutes ago, 55 of the operating budget is now on autopilot spending. In other words, statutes and laws are driving the spending and unless they are changed, the spending will continue. And i know that you are fighting a similar battle at the level if we want to fix the number is we must change the law. But the funding will wan not be enough to balance the budget in the years ahead. That brings me to another third priority. Tell alaskans the truth. Its a 15 budget growth and we are facing deficits that nearly are the size of the general fund, so the deficit is in some cases larger in many cases. Its time for everyone to get involved and that requires Accurate Information being made available to the public starting in january i will be fighting oveflying overto gather folks ia conversation started regarding the potential scenario for the sustainable budget. These include scenarios like basic Budget Reductions, changing the funding formula and the constitutional spending limit. Only for the constitutional spending limit cap that works for the government to truly have the war on spending. The preferred method if you Pay Attention to any news out of alaska recently, you will know that i will always fight for Smaller Government and a bigger payoff for alaska. My team has gone to Great Lengths in an unbiased fashion to make sure that each of us can have all the facts and that their voices are heard as they plan for the next decade which leads me to my next and most important priority, this i is a budget that will fulfill my commitment to alaska. Many of you may not be aware thabutalaska is facing an epide. Per capita we are often ranked deadliest state in the country for women. Meanwhile it is catch and release while later to the skyhigh rates in the cities and towns. I was elected with a mandate to make alaska safe again and we have made great strides. Last year we hired more state troopers than any other year in the past decade. I signed a landmark crime bill cracking down on those with a broad array of other criminals. We funded Domestic Violence programs and weve cleared the decadesold backlog on this to. This year we are expanding our efforts and the budget will pay for an additional 15 troopers. The department of corrections will increase by over 17 to cove70 ofyour population growtl as restorative programs. Finally, the judiciary of illegallwill befully funded incg additional funding for the spending. Public safety remains by nations number one priority in the budget reflects that. So far ive been pleased with response to my budget announcement and the cuts we made last year were tough. Absolutely they were tough but necessary and for many they were a serious wakeup call. Before alaskans were prepared to hold the line on spending. As you all know, standing alone by your principles is often necessary, but never enjoyable. So, i very much look forward to collaborating with the legislature and the public and the budget process moving forward. Because at the end of the day there is nothing more important to the governing and fiscal policy. You know as well as i do the fiscal policy is the true policy of the Financial Decisions we make shape the way the children will tomorrow and it is my aspiration of alaska that i leave behind is safer and more prosperous than the alaska that i discovered over 40 years ago and with that i want to thank you for allowing me to speak today and i would be happy to answer any questions. [applause] your name and where you are fr from. Sir, you talked about the election, but there is a back story to what happened. There was a crazy governors race. Can you talk about that chain of events that landed you in this office which was a democratic wave . Think you. Our incumbent governor was and ended and and was still in the race of time mark begich jumped into the race i was in the race and the three of us were running. The incumbent governor bill walker, and or so before the election actually dropped out. The numbers were not looking good so she decided to step aside and it became a twoway race at that point and the result was at the end we won the race. We won by a pretty good margin. You mentioned one of the issues you are facing is the regulations it could be. I was curious if youve talked with the Trump Administration about getting some of those reforms. We know the deregulation is a big issue for the administration and that seems like a good place to start rehberg placed to continue especially given some of the comments that the president has made regarding what those regulations have done out west into the lower 48 and what youve talked about but it does to the logging industry. Thank you very much. In Southeast Alaska we have the Largest National forest in the country. We had a terrific industry. It really was a highpaying family wage industry and that industry was shut down under the clinton administration. A couple of rules and regulations. In other words you couldnt build any more roads and you couldnt harvest oldgrowth timber which basically told the industry. As a result of that industry died in Southeast Alaska and as we stand here today, even though we have one seventh of the countrys entire timber reserves, rhode island has a bigger as a result of that. Having discussions with the Trump Administration as you know the president really wants to take care of america can utilize the resources to make America Great so weve had discussions and im fortunate it is the refueling site. We talked about what to do in the congress and hes helped us tremendously in working with his secretaries and folks in his administration to begin the role oldgrowth rules and as a result, we are very hopeful that we will be able to stand up to the timber industry. It may not be as large as it once was but theres plenty of 16 million acres roughly and as you know it isnt a national park. We have a lot of National Parks and alaska. Its a National Forest and what wwe want to dowe want to do is s back to work although the rate is now at historic lows its still one of the highest in the country. Having this robust industry in Southeast Alaska will get people off of Government Programs and also have the opportunity of opening up a couple mines so we hope to see the fruits of al the efforts shortly. We have a problem in alaska with keeping people to return after their education years and bring back to the state. Part of its jobs an this jobs at is just the change of attitude towards what sort of expertise we need to bring back now that we are dependent upon the Permanent Fund we need people that are more educated in the financial world and other sorts of Higher Education that could help with those skills. So i had this proposal where you let any alaska you loan them money for graduate work in the financial world and they come back and live in a state for three years and then you forgive the loan so you entice them to come home. Ive got two gentlemen right here one is a president ial scholar and one is from anchorage and has a mba from fairbanks. Ive had over my 42 years of lobbying here ive had people like this work for me, charles christianson, thirdgeneration. From dartmouth the job just wasnt there for them. Third generation went to houston, got an mba at notre dame. We cant get them back in so we need to entice them. What do you think of the proposal . Certainly we have had a program where loans were forgiven for the high need areas. We changed the way we do things at the university for example 20 years ago we noticed we had a nursing shortage so he emphasized nursing the nursing program. Thats been very very beneficial in providing more nursing candidates. There are absolutely things we can do to entice and keep people in alaska that is what we are all about. So we ar were looking at any al programs and possibilities to keep and recruit good talent in the state of alaska and as i mentioned one of the things we want to do is provide other Economic Opportunities in developing the resources into transportation. We also believe we have a potential future youve heard folks talk about big client etc. But the resources and energy and also we believe that we are positioned for the next 50 years in terms of our proximity i think both are well to try to bring more folks to alaska and also keep talent and alaska. We continue to work on the programs and the ideas that you just mentioned as well as others but also absolutely we recognize that one of over 48 are doing better economically we have the chances of them coming back are slim because there will be things in other places. These are ideas we are looking at. 240 million for the management of the fund there might be as many as there may be more farms in new york and elsewhere that could start a program for alaskans because they are handling our money and its the natural way for these advanced degree people to get some strength in the field. They used to do it but they are not doing as much anymore. This is an idea that was brought forth during the meeting in general and its easy for these guys. Its nothing for them to underwrite the program. Absolutely. With the highest per capita of any state i was wondering what policies he were thinking of to save the public pension programs and the time for the employees. Obviously we need to keep paying off the pension obligations and i think that it was in 2006 alaska changed its pension process it went from defined benefit to defined contribution process. The definedbenefit process ended in about 2 2006, 2007. But again they still have obligations and the fact that we have to pay. And alaska once we get, some folks dont realize this, alaska came to the union based upon its ability to develop resources because the discretion of the time if they had tw have too sma population to pay the broadbased income tax. Where am i going with this . We need to continue to develop our resources. More and more we are being hamstrung by groups outside of alaska to try to turn the entire state into a park but in order to provide new wealth we need to develop more resources and with that new wealth we will be able to start for respectively to pay down these obligations and if so, with the change of the process and 26, 20 of seven to definedbenefit to defined contribution and with our desire and ability to produce more wealth in the Resource Development so we get a handle on that and get that paid down in a manner that gets under control and allows alaska to grow the state. Good morning. I am from the russian embassy. He spoke about the budget, but it is not only spending, it is also revenues and speaking about the Foreign Trade [inaudible] one more time please. [inaudible] under the former head of the soviet union one of the concepts of began a collaboration with the soviets were used at that time and it kind of literary overtime. That is an area they are having a greater conversation to see how we can increase the trade between russia and alaska. A lot of folks dont realize that russia is basically 3 miles away from alaska. Small island. That is a conversation that i think is worth having. You are both a governor and educator and before coming out, we were talking about the u. S. Debt having reached 23 trillion. Congress is in the midst of considering beginning to consider 1. 2 trillion discretionary spending. What messages would you have for congress with regards to dealing with our debt the federal level drawing on your experience at the state . That may be one of the biggest questions we are facing as alaskans and as americans. Eventually the chickens are going to come home to roost in some form or fashion. Ithere is no magical way to deal with the growing projected overspending. Theres no magical way and sometimes it isnt painless, but the longer you wait, the longer you grow the superstructure of government in which the revenue is having more and more difficult time, you are really pushing yourself in this case the United States and in our case alaska into a very difficult position, and something is going to have to give because you cant keep spending. And to deal with fiscal reality because we are embedding a culture, i hope not but we are embedding a culture and somehow Something Else will take care of it and work out well. Go so thats a view that needs to change. Thank you for presenting. To questions. A big problem here is dc mandatory spending that youre talking about are there any specific ideas that you have across the board instead of statute by statute basis quicksand the other thing youre getting tons of pressure to increase taxes. To good questions. We have a discussion on education and that obligation of debt this creates an issue that i have no control over we have also introduced a spending limit 1981 people voted to put it into the constitution because they saw spending was out of control in 1981 so allowed the people to vote on that then refunded that the formula embedded in the spending limit had such a steep rate of spending would have to spend nine. 7 million to reach the ceiling. So we need to bring the spending down in the effort to contain that. If we dont change the formula what happens that cannibalize is the programs then you cant fund the items that are statutory protected so thats what we talk about what are our debts and obligations . And show people what that type of spending is also we need to demonstrate so they can see what you are expensing but you have to show both it will be difficult to manage the overall budget so both have to be discussed and changed. How do you feel about the jones act quex. Thats a good question. Like hawaii, puerto rico, alask rico, alaska, it has the effect of increasing cost. Im sure its an issue it certainly increases cost in places like alaska. And especially our warships but there is a negative for alaska on cost thank you. [applause] [inaudible conversations] one of the issues they would talk about more often is the issue of Mental Health it has been a controversial topic the past several years and if they say we will do this or that but i want to know what is being done about it and now nobody is talking about it and i would like to see that issue get more attention again because it is a very serious issue and i would like to see more Health Programs helping people that are afflicted. One of the issues important to me on the topic of immigration and Immigration Reform and then that america is the melting pot that there are issues that need to be addresse addressed. And to recognize jerusalem is the capital of israel. I wonder if any of the candidates recognize jerusalem as the capital of israel and what about returning the capital to tel aviv. Im more interested to hear what they will do to sustain age bees see you across the nation. I just want to hear more what the candidates plan to do with the hbcu for these challenging times. For the final public event the new cm hosted a discussion on the First Amendment with Chris Wallace and delegate with the speakers. Good evening ladies and gentlemen. Welcome to the new cm i am chair and chief executive officer of the freedom
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