Wednesday, October 1, 2014

Parnell Claim: "Pants on Fire!"

Earlier this election cycle one of the websites that does this sort of thing -- the Tampa Bay Times' Politifact.com -- rated a Mark Begich ad as so false it deserved the organization's ranking reserved for only the most outrageous political claims -- "Pants on Fire!"  The claims which qualify for that rating are those where "the statement is not accurate and makes a ridiculous claim."

If Politifact were following the current Alaska Governor's race I anticipate they would give the same ranking to a claim made yesterday in an email blast sent out by the Parnell campaign.  The blast is below, with the claim circled.


The circled portion reads:  "With a balanced budget and record spending reductions I made with legislators, a Parnell-Sullivan ticket ensures we live within our means. We cut $1 billion in the 2013 legislative session and another $1.1 billion in the 2014 legislative session."

With one exception -- each of the budgets were made with legislators -- neither of the sentences are even remotely accurate and both make ridiculous claims.  

The state's unrestricted general fund (UGF) (the category on which analysts commonly focus when talking about state budget matters) in Parnell's last three budgets has been far from the commonly understood meaning of the word "balanced" -- where spending equals or is lower than revenues.  According to revenues taken from the Department of Revenue's latest Revenue Sources Book (2014 Spring) (Table 2-1) and spending taken from the fiscal summaries prepared by the legislature's Legislative Finance Division, with an adjustment made for FY 2015 as described below, the results of the last three budgets are as follows (in $billion):


None even remotely approaches "balanced" (except in a Juneau-speak world where they assert something is "balanced" if it can be covered by savings retained from previous years) and, in fact, the last two are the highest deficits in the state's history.  

Most of the second sentence is equally wrong.  Looking again at the spending column above (which is derived from the fiscal summaries prepared by the Legislative Finance Division, as adjusted), the spending cut made in the 2013 session (which considered and passed the FY 2014 budget) was approximately $500 million (far from the claimed $1 billion) and that in the 2014 session $1.1 billion.  (The spending level initially reported by Legislative Finance for FY 2015 is $5.83 billion, but needs to be adjusted to add back in $350 million for PERS/TRS in order to make the comparisons apples-to-apples.)  The Parnell claim reaches for various below-the-line cash flow adjustments made to reflect an assortment of transfers from and into reserves held in other accounts (such as various loan funds and AHFC) to claim other numbers.

Finally, not even Parnell's own Office of Management and Budget backs up the bulk of such claims.  In its own analysis of the enacted FY 2015 budget, OMB shows both the FY 2014 and FY 2015 budgets ending up in the red (deficits) even after including the below-the-line transfers.  Its analysis of the FY 2013 budget also shows a final, post transfer deficit.

As the state begins to face a future of significantly lower oil prices than previously forecast -- which alone may balloon this year's deficit from $1.6 billion to $2.5 billion -- it is important that the state's leaders speak honestly with voters about the condition of Alaska's finances.  Parnell's "Pants on Fire!" claims don't even remotely do that.  Alaska -- and Alaskans -- deserve better, much, much better than the inaccurate and ridiculous claims they received from the Governor in this email blast.

Alaskans deserve the truth.