Posted on 07/03/2016 7:53:40 AM PDT by Kaslin
Things are not going all that well for Ron Duncan.
Duncan, 62, who made $3.4 million last year as CEO of GCI, the cable and communications firm that dominates Alaska, has had recent troubles with mouthy executives and new competition from Japan.
More seriously, GCI lost $26 million in 2015, nearly $9 million in the fourth quarter alone – after which he said, paraphrasing Custer no doubt: “We finished 2015 on strong operational footing, which sets us up to capitalize on opportunities in 2016.”
But his real problem will come when the Alaska legislature declines to continue to fund his gravy train. Alaska is in a budget crisis. At the end of May, hours before the state was to begin sending layoff notices for most of its 25,000 employees, the legislature reached agreement on a plan that would cut spending from $5.1 billion to $4.26 billion and address a $3.4 billion shortfall. That’s right, they were $3.4 billion short of funding their $4.26 billion budget.
The state, which spends $11 million per day from the rainy day fund, a pace at which it will be exhausted in two years, borrowed additional money from the fund to cover the shortfall. Lawmakers did not offer any legislation that provided for repayment or a way forward beyond this one-year fix, and the speaker of the state’s house of representatives says he “can’t guarantee any bills will pass” along these lines.
What’s happening is Alaska decided decades ago to base its economy on oil and gas, and that economic model is proving increasingly unworkable. Alaska has in recent years derived 90 percent of its revenue from oil and gas taxes, but it has gone from pumping 2 million barrels per day 30 years ago – a quarter of all U.S. output at the time – to 500,000 barrels per day now. The Trans-Alaskan Pipeline System now is filled to only one-quarter capacity, and prices for oil are nearing historic lows, undercutting revenue generated from taxes on oil production.
Meanwhile, its residents pay the lowest taxes in the nation – there’s never been a sales tax and the income tax was eliminated 35 years ago after oil tax revenue began pouring in – and its citizens enjoy the highest level of spending per capita.
In any other state, we would be moving to the discussion of how to shore up the rainy day fund and bring some fiscal sanity to the state. But Alaska has that $51.3 billion piggybank known as the Permanent Fund, to which the state wisely dedicates one-fourth of all oil and gas revenues.
The state uses $3.2 billion in interest from the fund each year to pay for the Permanent Fund Dividends – the checks, for about $2,000 in 2015, that go to every man, woman and child in the state each year. The question before Alaska is whether to begin tapping that fund for yearly revenue needs or to streamline state government and start preparing for a dynamic post-oil economy.
Duncan is on the side of tapping the fund to pay for state spending. He said if the legislature can’t address at least half the structural shortfall this year, “we’ll have to stop investing.” The big investment he’s working on now is a $220 million project to bring high-speed broadband to a dozen remote Alaskan villages.
Duncan has allied himself with labor union leaders and others in his call for making permanent this fiscal irresponsibility. He wants to cut the PFD – the Permanent Fund Dividend – in half and tap more of the interest for state services. His Alaska’s Future non-profit threatens opponents with political extinction if they do not get behind this program.
GCI is the dominant telecommunications company in Alaska, with 2,250 workers and $910 million in revenue in 2014. It makes tens of millions of dollars per year off state contracts in Alaska, and it rakes in $170 million of the $230 million the federal government sends every year from the Universal Service Fund—created by Congress to ensure broadband access to all Americans. It needs Alaska, which provides matching funds for the program, to keep spending as if the oil will never stop flowing.
It would be easy to feel sorry for Duncan. He took a lot of chances starting this company, nurturing it to where it is today and now trying to fend off economic forces beyond his control. But his prescription is more dependency, more government spending, putting an entire state, in essence, on welfare … all so the local cable company will have enough paying customers.
That might be helpful to Ron Duncan and even the 2,250 people who work for him. But Alaska’s leaders need to understand it would not be helpful to the people they represent.
In NYC, the politicians kept that gravy train chuggin' along until the very late 80s, early 90s. Many politicians ended up with executive positions in cable companies before they started merging. I live in rural WV now and folks here were amazed to find out that they had cable long before it was available to me in Queens, NY.
The Dividend is a payment from the State of Alaska to it's shareholders on the return earned from their property.
Much better then the state keeping it all the way they do every where else.
And this is the reason smart people in small towns are rejecting new processing plants. For many small towns though it is too late. They have been destroyed.
What they don’t realize all too often is that the jobs promised are not for them, the locals and that their school systems are going to be burdedned with teaching in tongues they have never heard. All at taxpayer expense since the new businesses have been granted huge tax exemptions. They pay nothing and the people pay it all.
And that is jus tone other seed of the destruction of America as we know it.
A few CEOs (corporations) control all the politicians (bribes) and keep the sheeple from Revolution with crumbs—freebies and lies and addictions: Total destruction of virtue of the masses (children) which always collapses culture (nihilism).
It is all unconstitutional in America—BUT lawyers are whores, nowadays, and removed Right Reason and Natural Law from our “Just Laws” LOL-—go figure how they got away with that??????? (Control of Words controls the “thinking” LOL).
Lawyers twist and destroy Language/words to be meaningless which makes “laws” meaningless and irrational. It is unconstitutional by the way to have arbitrary, irrational “Law” like those that kill babies or laws that promote sodomizing others. They should be declared “Null and Void” in a true Justice system. (Justice is the Queen of Virtue).
We got to go back to pre-1912 dictionaries and Rule of Law (Natural Law/God’s Design). Warping words, warps everyone’s worldview, esp. children, who are exposed to the twisted, irrational Neo-Marxism in skools (slavery). Common Core is complete Neo-Marxism/Neo-Freudism to corrupt the moral formation and sexual identity formation of children and remove children from their biological parents (Reality/Natural Family/Natural Law (Common Sense formation). Skools are designed to destroy virtue, self-reliance, sexual morality so that children are addicts, consumers and totally irrational (devoid of the Wisdom and Traditions of the Ages which created Modern Science and Free Will/Individuality (Christian Worldview only)
Greeks and Romans were VERY CAREFUL ABOUT LANGUAGE-—they KNEW how EASY it is to CONTROL EMOTIONS with rhetoric (just WORDS). If they can control your emotions (by total control of all your information/ideas/books), they control your Minds......most people “feel” the truth—they are too lazy to search for Truth since Truth will set you Free and Wisdom is only possible with extremely hard work (Virtue) and people are naturally lazy and take the easy road all of the time if they lack virtue (HABITS of GOOD). Christian Ethics created the most perfect “justice” system of all time.........and so that worldview is being eliminated off the face of the Earth. The elites/CEOs want compliant slaves for the state and that is what State skools are designed to produce (Socrates).
WAKE UP, America....we are being lied to and our legal “system” is now a complete JOKE and IRRATIONAL and UNCONSTITUTIONAL. It is WHY crony “capitalism” is the status quo and corporations “rule” us now-——just a massive CARTEL SYSTEM which will make us into slaves—no possibility of Free Will at all—ALL ideas will be controlled and FORCED into the heads of children no matter how SICK and UNNAtURAL (to destroy Logic and Reason (Age of Reason/Western Civilization).
Here you have just one of thousands of “pictures” of our crony capiltalists working to line their own pockets. These are the people who fund the GOPe and the RATs. They have no “ideology” other than “obscene personal gain at the expense of the citizens.” Vote Trump!
Alaska already is the biggest welfare state getting a government check every year. They complained they only get a thousand this year. Nasty takers.
Interesting reading this story and yet recalling how Alaska is cited with approval as an excellent example of how a society works with a guaranteed Government annual income payment (permanent fund). hmmm
“Interesting reading this story and yet recalling how Alaska is cited with approval as an excellent example of how a society works with a guaranteed Government annual income payment (permanent fund). hmmm”
Dude, do some math. $1000/12 = death from starvation. It’s expensive to live in Alaska - good example would be living at your local airport (example for price of goods).
I’ll agree with anyone that Alaska is another socialist paradise built on oil money - kinda like Venezuela - complete with 3rd world type poverty in the rural bush villages.
Now that oil prices have tanked, folks are moving out. The last time the oil prices tanked (mid-19802) 40K+ people left - just from Anchorage. I see that going on (again) right now, there isn’t a block in town where at least one house is for sale, RVs parked at the curb with for sale signs, etc, etc.
And yes, GCI is the queen of FedGov welfare payments.
Alaska has every resource imaginable but block development for what?
Feel good environment policies?
They shouldn't have elected that liberal slimeball as Governor. He wants an income tax.
so..... Alaska is now Venezuela but a lot less crowded.
So simple a... uh... politician can do it:
Solomon observed that there was nothing new under the sun...
Solomon says:
Didn’t Palin endorse this loser?
It appears it was a different Ron...
Yeah.
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