Haj please welcome the Heritage Foundation executive Vice President kim holmes. A nice rainy day outside and everybody is all bunched together to keep warm. Good morning everybody. How is everybody this morning . Governor welcome to the the Heritage Foundation it is a pleasure to have you here. Its a pleasure to welcome governor mike of alaska. And he will be speaking on the budget spending and what alaska can provide the nation as an example. Governor done was elected as governor of alaska 2018 hes had had a very career in alaska since arrival there in 1983 from working in a logging camp and southeast, alaska. To pursuing his dream in an educationer career as a teacher. He has a unique insight into alaskas communities due to his two decades of service there. He also served for five years as an alaska state senator. So he knows alaska literally from coast to coast. And that provides not only a unique perspective on had his state but also what can we from the 48 can learn from alaskas example. As all of us at the Heritage Foundation know america Founding Fathers vision a Strong Division of power between federal and state level of government what we call federalism. The constitution created a limited federal government and left much of the power to the states and to the people of the United States. But, of course, what exist today is that we have created a highly centralized federal government with states of e repowers into federal funding. This is allowed federal government to become more involved in issues that would traditionally left to states and to local communities. And this highly centralized government is a poor fit for a country as large and as diverse with as america. Federalism should allow for50 different model of governess suited to particular needs of thing nation individual states. And within the confines of the constitution, the state should be free to enact policy that best serve needs of their setses. And this respect federalism fosters Competition Among the states and competition between states encourages innovation and helps create a more efficient government. S general principle government closest to a problem should be one addressing in in our humble opinion for that reason we believe that congress should leave to states any program that does not carry out a constitutional function of the federal the government. Governor delaney will speak with us this morning about the successes that alaska has had in promoting federalism for budget discipline as well as what federal government may learn from alaskas experience. And after the governor e remarks paul who is our director of the Roe Institute for Economic Policy studies, he will lead a further discussion with the governor and also take question from all of you. So now please join me in welcoming governor mike. [applause] thank you for the kinds words and its a real honor to be here today. I want to talk a little bit about alaska. Im a former teacher of alaska to raise your hand if youve ever been to alaska uhuh but i wont. Our folks like to come up in summer time it is warmer but it is a beautiful state so i cant tell you how nice it is to spend time with like minded friends, here in our nations capitol. Every time i consider the difficulty of bouncing alaska budget im remindinged it that it could be a lot worse. I could be tasked with balancing the federal budget. Thats the mother of all challenges. And thank you all for the work that you do in try to accomplish that important goal fiscal and federal issues. For those of you i havent met yet my name is mike elected as alaska is 12th govan last fall d first governor to be sworn in north of the arctic circle. Were, of course, second youngest state in the nation just for reference. Candidate for President Joe Biden was about 16 years old when we joined union in 1959. And nearly 600,000 square miles of land mass alaska is not just americas largest state it is also one of the largest subcontinent to put in perspective i always joke around with folks from texas, because alaska is two and a half tombs the size of texas. We used to have four time zone were the furthest Western State first Northern State and eastern state as a matter of fact so far west were closer to australia than california is. A lot of people they have a hard time getting their arms around that over half alaska is called unorganizeed burrow resident live outside burrow form of government. Bower a term for louisiana perish we have burrows rest of the countries has countries so this creates a delicate situation for our policymaker striving to balance priorities of our, quote, big city residence and acreage for those who live out in sometimes middle of nowhere. And then we have hundreds smaller communities and census designated areas consistenting of alaskan native and modern day immigrants and one member of our congressional was born in alaska. Of course i didnt come here today to resite alaska facts although i can for some time i love this great state and i came here to talk about fiscal policy something ive been told interest all of you. I took office last december in the midst of a financial meltdown in alaska. After years of inaction the annual deficit decline to 1. 6 billion put this in perspective were talking states and our state spend in alaska is 4. 4 to 4. 6 billion so a significant budget deficit. And keep in mind were expected to bring in about 2. 1 billion dollars in revenue this year so deficit of this magnitude was unmitigated cries city but also entirely predictable crisis from 014 to 016 price of north crude plummeted from 110 dollars a barrel to just 30 dollars a barrel. From the peak of four billion dollars state revenue class to just 700 to 50 million rather than face a revenue projection head on our state local leadership chose to increase spending during this time. Exaggerated revenue estimates and clever budgeting gimmick became common place allowing appropriations to hide truth of the crisis from the public this policy of enaction and deception prove to be unmitigated disaster. The first time we were forced to dip into oil wealth savings account called primitive fund. Just to keep the lights on. Meanwhile, gdp growth stalled and last frontier known as worst state for business in america. I ran for governor because i like most alaskans believe our state decline had to be reversed. Schismly no reason for a state this rich in Natural Resources and pioneer experience to be considered worst in anything. To this end i began my first time by directing staff of alaska finances no more deception or sometime to stall and what some of our states big spending politicians decide ited to ignore these warnings, i yiewt lite my veto of power cut spend by 650 million. This was largest Budget Reduction in the state history, and a critical First Step Towards getting alaska become on track. By critics predicted doomsday. They figured alaska would be end of Akademik Shokalskiy would slide off into the Pacific Ocean but they could have been more wrong. According to economists, our three year recession is finally coming to an end gdp increase by 4. 1 last e quarter second consecutive quarter of economic growth. Thousands of new jobs created across practically every sector of the economy and prieflt sector wages grew by 5 . Projecting 1. 1 billion dollar increase in private investment on north slope this year. But alaska so much, so much going for it. In addition to this a lot of people down here we call this lower 48 believe our state is at place with a lock a place with a lot of oil. Well its true. But its only a sliver of the real story. I always tell folks that alaska is america and so much more had. It is a place where you can open business complete with all of the benefits of protection of a first world system of government, network, yet at the same time have a access to vast untap Natural Resources of simply dont exist outside of a third world. Im talking about the largest lake by deposit on planet resource currently monopolize by china. Middle endowment of every precious and rare earth metal in mineral there is. And estimated half of a nations coal. The largest wild fisheries industry in the nation totaling 61 of all fish land in the u. S. 1 7 of the nation timber although crippled logging industry to allow it to simply fall down and burn wasted resource right now. Were with also located quite literally in the center of the industrializeed world. This is often time fact that people have a hard time getting their arms around as well International Airport in acreage is 9 hour of new york and tokyo. And serves as gate qai to asia pacific markets in term of cargo it is our airport is second to the ten feet second to internationally rank as fifth busiest on planet. And it it is growing rapidly in terms of cargo transport. Believe it or not, airport is never closed for snow. Despite fall as much as 6 million tons of it each winter alaska deals with snow. In fact aviation is is one industry that we expect will be a big part of alaskas Economic Future. One in every 60 alaskan is a pilot many whom fly out of lakewood sea plane based and fa has designationed a portion of the arctic for unman research and open to it all currently used by organizations like boeing, bp and university of Alaska Research there is led to break throughs in pipeline and arctic ice monitoring. Plans are also in works to connect alaska to alberta in lower 48 via railroad in 1500 mile railroad. Link opening a historic new trade route to benefiting alaska refineries. That alaska doors are always open to innovator and dreams and might have seen me reaching tout elon musk regarding protection of Tesla Cybertruck they have a testing ground in alaska and by him to come to alaska to learn about how we produce resources how we produce mineralses in earth and do it probably better than any other place in the world. These are the types of forward thinking people and businesses where eying per to collaborate with. But despite my optimism for alaska Economic Future balancing our budget has not subsided this year we again face a major short fall of 1. 5 billion dollars. Some of this can be traced back to the price of oil which is expected to fall another had 10 over next two year and some of it is do you to formally driven spend chg increase by 89 Million Dollars this year including debt and pension payment and front source switches totaling 160 Million Dollarss driving budget upward. In fact, over half of alaskas budget consist of formulas and obligations and embedded in statute. On wednesday announce a plan to keep alaska on solid ground and consist of four overarching priorities maintain fiscal discipline, honor the the law, alaska is the truth, and fulfill the commitments i made to alaska when i ran for governor. And these arent just my priorities by the way. Based on feedback ive received from folks across alaska these are alaskan priorities. Of course preaching to the choir when to comes to maintaining fiscal discipline but theres a real sense for opponents that people may not understand the danger of deficit spending. Much of this i attribute to creeping influence of washington, d. C. And a debt embracing culture. Even in alaska, twitter help amplify National Politic for debt spending by both parties is common place. Borrowing backed by Treasury Task printing machines seemses of little consequence. Unfortunately i get to find a machine the prints money in alaska. Fortunately or unfortunately, we are have to balance our budget in alaska. And revenue if you say which once held over 600 billion dollars are reserve fund our savings account, at 16 billion as of 2013. Will nearly be depleted after this year, as a result of deficit spending. So this years budget represents the first in a ten year plan to contain spending and cut annual deficit most Government Service will be flat funded and there will be no net spending increase with the budget i ruled out. This is also budget that would honor la and in alaska we have a Permanent Fund. This is a wealth fund that districts dividends as well as saves oil, wealth, or future generations of alaskans, and districts a annual check to alaskans and helps add a check and balance on government spend and more money you save, this constitution protected but opportunity is for politicians to get their hands on it. And recent years, politicians have ignored laws diverted a portion of the diffed ends to fuel government spend this is all wrong. So also bad policy. I have yet to meet anyone who beliefs that government, government spends money better than individuals citizens. I even believe that folks on left dont believe good policy. Budgets calls for full dividends plus repayment of last year reduce payout but also secondly, weve also fullly funded education before joining 89 legislature i work as a teacher. Later as a superintendent for nearly two decades in article alaska. Swrafer wards i spent a couple of more years in a school board so familiar with the struggle both from the teaching and administrative perspective. We cannot move forward as a state while leave our children behind to but it cant just be about input how much money you put into a system that also has to be about output how well our kids doing and how well is is this system doing . Finally, ill be doing my best to change laws that are crippling our budget as i alluded to minutes ago 55 of alaska operating budget is now on autopilot spending. In other words, statute lawses are driving this spend. And unless those laws are changed spending will continue. And i know you folks are fighting similar battle here at the federal level if we want to fix numbers we must change the laws. But flat fund adheres to budget will the not be now have to balance a budget in yearses ahead that brings me to another third party fellow alaskans the truth. The boom years of 15 budget growth and over is over. The facing deficits that nearly thats nearly the size of the general fund so our deficits are almost as big as actually in some cases almost as big as revenue receive larger in many cases. It is time for everyone to get involved and that requires accurate fiscal information made available to the public starting in january ill be fly all over alaska to gather folks input. To get a conversation started regarding potential scenario to sustain public budget. These include seminar joe such as major Budget Reduction and changing formula and a constitutional spending limit. Always through a constitutional spending limit cap that works while government has side boards on spending. Obviously, preferred method if you Pay Attention to any news out of alaska recently, youll know that ill always fight for Smaller Government and a bigger Permanent Fund payout for alaska. My team has gone to Great Lengths to lay out each scenario in unbias fashion to make sure each alaska has all of the facts that their voices are heard and plan for the next decade. Which leads me to my next and most important priority this is a budget that will fulfill my equipment to alaska. Many of you may not be aware but alaska facing crime epidemic. Per capita even ranked deadliest state in the country for women. Meanwhile, a disastrous catch and release law led sky high profit crime rates in our city and our town i was elected with mandate to make alaska safe again and we made great strides. Last year, we hired more state troopers than any other year in the past deeing keyed i signed a land mark crime bill cracking down on sexual predatorses with broad array of other criminals and Fund Domestic Violence program and shelters as historic levels. As weve cleared decade old backing log of sexual assault. This year expand our efforts but budget had will pay for additional 15 treerps state troopers and three prosecutors. And department of corrections budget will increase by over 17 to cover poppings growth as well as restorative programs. Finally, the judiciary will be fully funded including additional funding for public defenders and yard begans Public SafetyMeans Administration number one priority in the budget reflectses that. So far ive been pleased with response my budget announcement cuts were made and last year we made were tough and necessary and the the serious wakeup call. For what im learning alaska is prepared to hold line on spend as you all know, stapgding alone on principles often is necessary but never enjoyable. So i look at very much look forward to collaborating with a legislature and the public as a budget process moves forward. Because at the end of the day theres nothing more important to governing than fiscal policy. You know as well as i do fiscal policy is future policy. The Financial Decisions we make today directly shape the world our children will live in tomorrow. Its my greatest aspiration that alaska i leave behind be safer and more prosperous than the alaska i discovered 4 years ago so i want to thank you for allowing me to speak today and entertain questions. [applause] couple of mics in the room any questions also where youre from and yep. Open to the group. Mccabe won american news. Sir if you would talk about about your election but could you theres a back story to what actually happened. That was a crazy governors race can you sort of talk about that chain of events that landed you in this office which was a, you know, a democratic wave year . Yeah, thank you. So we governor was independent, and was still in the race the same time former u. S. Senator mark jumped into the race. And i was in the race this is after the primary and three of us were running. The incumbent Governor Bill Walker just a moangt or so before the election actually dropped out for a whole host of reasons. The number werenting looking good. And so he decided to step aside so it bill a twoway with race at that time between myself and mark and result was that the end of the election at the end of the election, the campaign season, we won the race 51 to 44 so we won by a pretty good margin to implement the mandate agenda that we were in on. Thank you governor im jack spence we are Heritage Foundation. You mentioned that one of the issues youre facing is the regulations that keep your Timber Industry fromming being all that it could be. I was curious if youve talked with with the trumpeded administration about getting reform and regulation is big issue for regulation so that was a good place to continue especially given comments that the president has made regarding what will those regulations have done out west in the lower 48, and what youve talked about it does to youring logging industry. Yeah thank you very much. Well first i went to alaska and worked inning logging camp in 1983 and in Southeast Alaska we have a National Forest largest National Forest in the country. We have a terrific industry. It really was a highpaying badly wage industry. And that industry was out shut down under clinton administration. Received a couple of rules a rule hold growth timber rule and couldnt build anymore roads, and you could not harvest old growth timber which basically killed the industry. As a result, that industry died in southeast, alaska. And as we stand here today even though we have 1. 7th of the entire country entire timber, reserved, rhode island has a bigger Timber Industry than alaska does as a result of that. In having discussions with the Trump Administration as you know the president really wants to take care of america. Utilize america resources to make america great, obviously. So weve had discussions with the president ive been fortunate that the the president stopsth anchorage and we talk about what to do and hes helped us tremendously inning working with his secretary and his focus oned as mrgs and get in the process of rolling back those rules. Rolling back the rule rolling back the old growth rule. As a result were very hopeful well be able to stand at the industry but it wont be as large as it was but meant of timber 16 million acres of force roughly. And as you know National Forest is supposed to use for multiuse purposes it is in the a national park. We have a lot of National Parks in alaska. It is a National Forest. And what we want to do is put alaskans back to work. Although Unemployment Rate is not historic low for alaska. Its still one of the highest in the country. Having a role Timber Industry in Southeast Alaska put thousands of people potentially back to work. It will get people off of government programs. Also has the opportunity of open up mining we have a couple of mines that down in Southeast Alaska we have also rare earth finds so the government, the president and his administration has been tremendous knepping with us that and we hope to see the fruits of all of these efforts here shortly. Good morning governor chad ferguson and live haded in alaska and live in d. C. Good to see you. We have a problem in keeping talented young fell whats and twoam return after their educational years in the lower 48 bring back to the state. Part of his jobs and part of it is just a change of attitude towards expertise to bring back now dependent on Permanent Fund and people more educated in a financial world with nba other sorts of Higher Education to help help with those skills down in general for the state. So i had this proposal which is like a whammy proposal where you let any, any alaskan you loan them a student loan in the finance world and if they come back and live in the state for three years after that degree, no matter where they were you forgive the law. And so you entice them to come home. Now, i have two gentlemen right here [laughter] both hate this. President ial scholar and grant cummings from anchorage has nba from university of fairbanks and so on. Ive had over my 42 years of lobbying here ive had people like this work for two or three years Charles Christian through generation from anchorage returning. Degree from dartmouth job just wasnt there for them. Perry only family through generation went to houston got his nba out of notre dame we cant get these guys back in so we need to entice them what do you think of that proposal . Certainly. The, weve had a program in alaska where loan were forgiven or highneed areas. Weve changed the way we do things at university for example 15 years ago, 20 years ago we notice that we have a nursing shortage. And so we have to emphasize nursing pral at the university of alaska and been beneficial in providing more and more nursing kaingts for industry up in state of alaska. Which i absolutely there are things that we can do to entice and keep our keep our young people in alaska thats what were all about is trying to build an alaska not just for this future but for kids and grandkids so were looking at any and all programs and a possibilities to keep and recruit good talent in the state of alaska. And as i mention one of the things that we want to try to do is provide other Economic Opportunities and developing resources and in transportation we also believe that we have, we have a potential future in, in data farming in alaska. And youve heard of folkses talk about coin, et cetera but alaska on the globe resources are energy, but also we believe that we are positioned for the next 50 years in terms of our proximity to asia. I think bodes well to try to bring more folkses to alaska but also keep count in alaska. So we continue to work on the program and ideas that you just mentioned as well as others to do that. But absolutely we recognize that when the low of 48 is doing better economically and our young people leave the changeses of them coming back is slim because theyre going to be setting down roots in other places. So what you just mentioned is is these are ideas were looking at. Im sure the more firms in new york, elsewhere, that could start an Intern Program for alaskans because theyre handling our money and its the natural way for advanced degrees to get experience in the field, and they used to do it. Not doing as muching a anymore. This was an idea brought forward during the Sovereign Wealth Fund in the meeting and its easy for this guys. Its nothing for them to underwrite that sort of program. Absolutely. Skip with alec. Unaccountable, unaffordable report has alaska with the highest per capita pension debt as any states. What policies are you thinking of to save the alaska public pension. We need to keep paying off our pension obligations it and was 2006,ing a changed the pension protest. Went from a defined benefit process to a defined contribution process. So the defined benefit process ended in 20062007 but we still he dates to pay, and alaska came into the union as a state based on its ability to develop resources, vast Natural Resources but the discussion at the time was that alaska had too small a population to pay, let say, broad based income tax or some tax like that. So we need to continue to develop our resources, more and more were being hamstrung by entities and groups out of alaska to try to turn the entire state into a park, but in ordinary to provide new wealth we need to develop resources, and with the new wealth we can start more effectively pay down the pension obligations. We the change of the process in 2007200 and with our desire and ability to produce more wealth, through resource development, our hope we get a handle on that and pay it down in a american that keeps is under control and a lows alaska to grow as a state. Governor, good morning. Im nat tally and im from russian embassy. You spoke but the budget but it is not only spend, it is also revenue, and speaking about the foreign trade, what are are you plans for cooperation and in particular through bering strait. Last part the question your plans, could you be deafblind about it on the cooperation of the bering strait. Very good question. So, under your former head of the soviet union, gorbachev, when when the concept another pair stroke ya there was a co lan operation with the soviet far east at that time, and it kind of withered over team. That is an area i think alaska is woo about interested in having a greater conversation to see how to increase potentially trade between russia and alaska. A lot of folks dont realize but rich is basically three miles away from alaska, all island and thats a conversation that is worth having. Youre both governor and an educator, and talked but the u. S. Debt and congress is in the process of beginning to consider 1. 2 trillion Discretionary Spending bill. What messages would you have for congress, within regards to dealing with our debt at the federal level, drawing on your experience at the state . Thats a good question. That may be one of the biggest questions were all facing. Were facing as alaskans and as americans. Eventually the chickens will come home to roost. Theyre no magical way to deal with growing budgets and overspending. No magical way and sometimes its not painless but the longer you wait, the longer you grow a superstructure of government in which a revenue is having more and more difficult time supporting it, youre really pushing yourself in this case the United States and our case, alaska into a very difficult position. And that something is going to have to give because you cannot keep spending, and the sense the u. S. Government, cannot keep printing money and expect it to hold its value. From the alaska experiences, the sooner you get it under control the better off youll be, not just this generation but for our kids and our grandkids. And you need to take tackle that issue, grab that tiger by the tail sooner rather than later and deal with it now. I made a vow that when i ran for governor i knew what i was getting into, not going to be easy or pleasant. But i decided i cared so much but the state i was willing to tackle these difficult issues but sooner than later and deal with fiscal reality because wright now were imbedding a culture of debt, lots of debt, as acceptable and somehow down the future someone else or Something Else will take care of it and everything will work out well. That is a view i think that needs to change and change sooner than later. Darrin par can with hers big problem in d. C. Is the statutory spending, like first question, any percentage ideas you have on addressing mandatory spending across the board and how to fix that instead of just on a statute by statute basis, some type of concept you have to and the other thing is when you have this debt, are you getting tops of pressure to increase taxes in alaska. Two good questions. So, we are going to have a discussion on our statutory items we need to spend money on, education, medicaid, et cetera. We also have a discussion on how we want to deal with our bond debt, pension obligations. This is spending that keeps pushing against the ceiling and obviously creating an issue that i have no control over unless the legislature acts upon it. We have also introduced a spending limit, an appropriations limit. 198, 1 people of alaska voted to put an progress limit into the constitution. They could see that spending would be out of control back in 81. So they voted for it and the legislature allowed the people to vote on that and then reaffirmed in 1986. The problem is the formula in the spending limit war pegged at such a steep rate that would we have to spend 9. 7 billion and were only spending 4. 4 to reach the careering. What we need to do with the spending limit is to prisoning that spending down to about bring that spending down to 4. 4 or 4. 3 billion in an effort contain that. If you get a spending limit in place, you have to somewhat cannibalize your programs. Those that are not statutorily protected you need to move money out of that to fund the items that are statutoriry protected. So so you have to have both, have to have a realistic conversation. Lay out or debts and statute over to obligations and show the people of alaska what that type of spending is and demonstrate to them the benefit of functional spending cap so they can see that you can hem politicians into 2 a year for spending but you have to show both. You can do a spending revised spending limit, going to be difficult to manage the budget when your cannibalizing it to pay for those so both have to be discussed and changed and implemented. How do you feel but the jones act. Thats a good question, isnt it. It for places like hawaii, puerto rico, alaska, it has the effect of increasing costs. Im sure thats an issue that there will be discussions down the road, but its certainly increasing costs for places like alaska. Understand the basis for it to keep the able for us to build our there is a negative for alaska on costs. Thank you. [applause] [inaudible conversations] coming up, a discussion on human rights against certain muslim groups in china. Then, government officials in Business Leaders look at future environmental innovation in the u. S. And later, remarks from assistant attorney general john demmers on national accurate National Security issues. This holiday week booktv is on cspan2 every day. With primetime features eve night. Tonight the theme is best sellers. Ronin pharaoh details itselfs to stifle his reporting and george will officers his caughted on consecutivism and openy cant youor discusses the Metoo Movement and the investigation. Against harvey weinstein. Enjoy booktv this week and eave weekend on cspan2. This weekend, book tv features three new nonfiction books. Saturday at 6 00 p. M. Eastern, dougweed talks put his latest book, inside trumps white house. Stop and think of that just for a minute. The russians have run him for president and elected him against all odds to be president of the United States and hes a russian spy. Think about that for a minute. That is like landing a map on the moon. Thats like the assassination of julius cease sir, like Christopher Co lump bus. One of the greatest events of World History if they were able to actually achieve that. At 8 20m, in the ethical algorithm, Computer Science proves discuss algorithm desip. Philosophyers have been thinking but fairness, privacy, and the like. Theyve never had to think about these things in such a precise way. That you could actually write them into a Computer Program or into an algorithm. Then sunday night, on word word word, new York Magazine contributor Thomas Chatterton will ymca with his latest book, selfportrait in black and white i realize the black experience was more diverse than i had over in in my corner of new jersey, and through getting into jazz and read other writers more seriously, i began to wonder why my friends and i had such a narrow conception of this rich cultural tradition and why i thought my father was outside of this cultural tradition when he was na many ways exemplifying it. Watch booktv this weekend and eave weekend on cspan2