By MICHAEL TAVOLIERO
Sen. Robert Myers captures Alaska’s present reality in his Dec. 30 commentary, “Why does Alaska look so good on paper, but perform so badly?”
On paper, Alaska should be unstoppable: immense resource wealth and an $85 billion Permanent Fund generating about $4 billion a year covering most of a $6 billion UGF budget without a broad-based tax. Yet in practice we too often look like a state in managed decline: weak infrastructure, soaring health-care costs, a dysfunctional justice system, and K–12 results nowhere near the investment.
The senator’s diagnosis is simple. Alaska looks rich but performs badly because the “State” hides “government’s” true cost, rewarded spending, and crowded out private growth so core systems fail despite massive inputs.
Sen. Robert Myers: Why does Alaska look so good on paper, but perform so badly?
Myers is, frankly, too polite about what that adds up to. Alaska, the land, is one of the richest places on earth. Alaska’s governing apparatus, the “State,” performs like a shipwreck where only the captain and crew reliably make it to the lifeboats.
The senator may offer solutions as his series continues, but first we should name what we’ve built and the four barriers now dominating Alaska’s future: Medicaid, education, cheap energy, and the PFD.
Political economy says there are only two ways to meet human needs: the economic means (produce and trade) or the political means (take what others produce without compensation).
Alaska entered statehood to secure liberty and enable the economic means, but oil-era incentives in the 1970s pushed us, by habit, dependency, and institutional self-preservation, toward the political means.
Let’s be precise: the “State” isn’t the same as “government”.
H. L. Mencken 1926: “It [the State] has taken on a vast mass of new duties and responsibilities; it has spread out its powers until they penetrate to every act of the citizen, however secret; it has begun to throw around its operations the high dignity and impeccability of a State religion; its agents become a separate and superior caste, with authority to bind and loose, and their thumbs in every pot. But it still remains, as it was in the beginning, the common enemy of all well-disposed, industrious and decent men.”
Alaska’s State now operates as a transfer machine: taxing, drawing, and leveraging federal match to route wealth through Medicaid and education bureaucracies, energy chokepoints, and PFD raids, away from families and into entrenched interests.
“Government” is the machinery. Elected officials and day-to-day institutions make and enforce rules and it can change hands.
The “State” is the standing authority: the durable sovereign framework, law, jurisdiction, taxing and enforcement power, and the bureaucracy that persists regardless of elections.
When the permanent bureaucracy and security apparatus, steer policy regardless of elections, people call it the “Deep State”: the standing regime remains while government becomes the rotating cast.
Alaska’s internal challenge is four barriers that now dominate our future: Medicaid, education, cheap energy, and the PFD. If we resolve them first, we can restore a functioning public economy.
Alaska won’t be truly sovereign while four choke points are run not as limited government, but as an expanding “Apparatchik”, a standing authority that rules through dependency, opacity, and coercive leverage.
Medicaid binds our health system and budget to federal control; education burns money while dodging accountability and driving families out; energy forces scarcity prices in a land of abundance; and the Permanent Fund/PFD is treated as a political valve to fund the apparatus while hiding the true cost of rule and ignoring trust responsibilities.
Together these aren’t “policy issues”. They’re the hard instruments of “State” power that keep Alaska a clinging colony: dependent on outside money, ruled by entrenched systems, priced out of our own wealth, and stripped of real self-government.
1) Alaska, if it cannot relinquish Medicaid’s chokehold and return it back to the federal government, then Alaska must turn Medicaid from an open-ended spending stream into a managed insurance program: aggressively manage high-cost populations, change payment incentives (value/global budgets), cut travel and crisis dependence, tighten pharmacy/utilization, modernize eligibility, and maximize lawful federal match, while measuring everything against a hard growth target.
2) Replace the centralized district education monopoly with school-centered, fiscally transparent, student-funded local governing units that can buy services competitively, so performance and costs become visible, accountable, and locally correctable.
3) Build least-cost, reliable energy by requiring the Railbelt to operate as one coordinated system, true economic dispatch, unified planning, open access, and competitive procurement, so the cheapest available power runs first, and ratepayers stop funding fragmentation and inefficiency. Move rural Alaska off diesel with a practical, phased microgrid buildout: standardized hybrid systems (renewables + storage + advanced controls + optimized diesel), aggressive efficiency and weatherization, and continuous iteration because remote systems are still being perfected and engineered for Arctic reality, logistics, and maintenance limits. Alaska should actively prepare for the next true step-change: commercialized small modular reactors (SMRs) as firm, local baseload, so even the most remote villages can escape the diesel trap and lock in fewer cents per kWh and fewer dollars per winter.
4) Lock the Permanent Fund into a constitutional trust, principal inviolate, earnings under fiduciary duty, and distributions in a fixed, enforceable order: inflation-proofing first, then a mandatory rules-based PFD, then only a capped government draw, with a smoothing reserve to prevent market whiplash. If a constitutional amendment can’t pass, mirror it in statute, automatic inflation-proofing, a defined dividend formula, and annual public trust accounting, while admitting the truth: statutes can be rewritten, and that weakness is exactly why trust-level protection is urgent.
Michael Tavoliero: The case for detaching Chugiak–Eagle River, creating Chugach Regional Borough
11 thoughts on “Michael Tavoliero: The Myers’ insight reveals a trust-fund state with third-world systems”
Add to this lack of support for making our communities better: spending more funds on homeless rather than crumbling roads; supporting homeless rather than adding police and prosecutors; and taxing our seniors out of Alaska by high property taxes. This means people don’t want to move to Alaska when they see the high crime rates, our streets filled with homeless and our schools all having failing grades. Our young people want to move out not only for better climate but for better opportunities. Our leadship must change so that we can change these outcomes.
Nicely done, Michael.
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Would the four barriers dominating Alaska’s future be a problem if voters weren’t disenfranchised by easily corruptible elections and grand jurors weren’t gelded by corrupt judges?
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Would hard instruments of “State” power be a thing if grand juries could indict perpetrators and voters could vote unindicted co-conspirators out?
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Were those who made, and profited from, Alaska’s present reality able to do so because they knew they had no reason to fear grand juries or angry voters?
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The things about which you wrote, Michael, how will they be fixed, how will they stay fixed, while present and would-be perpetrators have no reason to fear grand juries or angry voters? Shouldn’t that problem be fixed first?
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And last, may we ask you what we asked Myers (who hasn’t got back to us yet): Can you stop with the “broad based tax” schtick like it meas something, like it’s a not-so-subtle hint that a “broad based tax” is all it takes to make Alaska not perform so badly? Surely you’re not infected with the Keithley “broad based tax” virus?
So what you said “Alaska entered statehood to secure liberty and enable the economic means, but oil-era incentives in the 1970s pushed us, by habit, dependency, and institutional self-preservation, toward the political means.”
Is that Alaskans then and the present Alaskans were and still are a stupid crowd with little imagination to do otherwise.
In a nutshell.
I already figured that one out when I go around my community. Alaskans are not very smart whether or not they attended and graduated college.
AGAIN!!! None if those four actions can get changed until the people of Alaska has a heart change. The only one who changes hearts is God.
Like I said before Alaska does not yet know who is God. The God they know is the genie type God who they come to when they want something.
I agree with the article’s interest in nuclear power. But we should not lock the PFD into the constitution. That would soon ensure a state income tax, resulting in income redistribution from workers to many indolent people.
The article supports “a smoothing reserve fund to prevent market whiplash.”
I think one type of good “reserve fund” is the Constitutional Budget Reserve, which has been severely sucked down to tide us over when world oil prices crashed back in 2014 and 2015. The law says that it is supposed to be replenished. I refuse to cash my paper PFD checks until the legislators make progress on paying back the CBR. I have been sending my uncashed PFD checks back to the Dept. of Revenue since 2015.
I like what you are putting down. You come at it from a state perspective-Im saying somewhat similar experiences that are happening throughout the regions of Alaska.
Although your rhetoric places the accountability in the States authority; that just is not the reality in Alaska outside the ‘AK Beltway.’
I appreciate your commentary.
Stay well. Trudy
The State of Alaska has zero leverage outside populous cities. And the State is struggling to hold those historically held footholds.
The State of Alaska – all three facets: administrative, legislative, and judiciary data shows it is complicit and not solution oriented.
There is no leadership. There is no vision.
There is nothing more than reactionary repackaging of grant applications.
I want more. I want better. I want good news.
We will change the conversation from all the never ending chokeholds into what are we collectively striving for?
That takes the buy-in and follow-through from commentators like you, who are freely given a platform to express your opinions.
Alaska is America’s Venezuela. The politicians use the money from the PF to hand out favors (money). Those who benefit from the favors aid their reelection efforts. The PF is the worst thing that ever happened to Alaska. There is absolutely no reason for government to ever hoard that much wealth.
When the PFD was created, it was a different Alaska and its leaders were terrified that future generations of Alaska would experience a Great Depression without any savings, they didn’t make it for funding government, they made it for emergencies as in extreme natural disasters and financial disasters that cripple and bankrupt any state . That generation was known to sit on piles of money and living frugally even being stingy because of their experiences living through the 1930’s.
Boomers, GenX, Millennials or GenY, GenZ we all don’t know what hardship is that’s why we live so selfishly and indulgently. It’s where the legislature thinks they can spend down the Permanent Fund because they can’t imagine anything in future being worse than a couple storms like Matsu 100mph windstorm or Southwest Typoon
I’m sure if they thought that their children and childrens children would be as we are today THEN they probably would never had created the Permanent Fund model
Their intention was good, they were trying to protect us
Return the PFD to original legal language Follow the disbursement and investment. Quit the over planning on its purpose. Put Bills to the public to vote on regarding changes to the PFD. Create parameters of hands off for governors and legislative persons.
The PFD is always over stressed in legislative sessions and planning of different source persons and businesses. Hands off! Learn to work with the PFD instead of going wild about money owned by the state and residency. Quit beating a dead fish!!