
Alaska’s Engineering Colleges Prepare to Slash Programs, Lay Off Faculty - amynordrum
https://spectrum.ieee.org/tech-talk/at-work/education/alaskas-engineering-colleges-prepare-to-slash-programs-lay-off-faculty
======
tastyfreeze
The Alaska budget cuts are not only to the University. Deep cuts across the
board with services Governor Dunleavy feels are unnecessary taking the biggest
hit (public health, university, public ferry transportation). However,
according to Alaska's constitution the government must come up with a balanced
budget. They have failed to do so since revenue shortfalls began. The previous
governor used a stopgap measure of using the only part of the PFD that isn't
constitutionally protected. His actions are akin to digging through your
neighbors couch cushions for change. The money that was used isn't for running
the government. But, since it wasn't constitutionally protected like the
actual fund the legislators took what they wanted to avoid making hard
choices.

The media focusing on Dunleavy wanting to pay residents what is
constitutionally granted is a distraction. Alaska is in dire financial
straits. Without severe budget cuts or a way to dramatically increase revenue
Alaska will be bankrupted.

For clarity, the Permanent Fund (the investment fund), is constitutionally
protected and fed by oil revenue. The Permanent Fund Earnings Fund (that PFD
checks are paid from) is not constitutionally protected and is what
politicians raided.

~~~
AWildC182
While this may be true, Alaska, unlike almost all other states, basically
operates without any income or sales taxes. They depend almost entirely on oil
revenue and property taxes which obviously isn't sustainable long term.

[https://www.bankrate.com/finance/taxes/state-taxes-
alaska.as...](https://www.bankrate.com/finance/taxes/state-taxes-alaska.aspx)

~~~
cynicalkane
Property, income, and sales taxes are all part of the cost of living and doing
business. Raising property taxes won't hurt the general public any more than
raising the other two. Taxes aren't a menu where you need a little of column A
and a little of column B, just because. It's all money coming from the economy
in some form and the important part is what you're incentivizing or
disincentivizing.

In fact, there's a minor but respectable economic school of thought that
property taxes should be _greater_ than 100% of all taxes, and the excess
should be redistributed to the disadvantaged. Property taxes disincentivize
hoarding and wasteful use of valuable property, which is A Good Thing.

~~~
8ytecoder
Different taxes affect different people differently. Sales tax primarily hits
poor people for example - there’s only so much the rich can spend their money
on. Bracketed income tax can be made to have low impact for lower income while
boosting revenue. Property taxes tax the permanent residents but misses out
the opportunity of, let’s say, taxing the tourists. Those are all levers.
There was a recent article on economist that compared the tax models of
California and Texas. One has a progressive income tax but crippled property
tax and the other has no income tax but a steady property tax. Everything from
the risk to revenue and the impact it has on the people vary so much. Neither
is good in a way. The best system will use all three in the right proportion.

~~~
dragonwriter
> Property taxes tax the permanent residents but misses out the opportunity
> of, let’s say, taxing the tourists.

Tourists pay real property taxes because those taxes are factors into
accommodation prices, and into the prices of goods and services sold to
tourists.

~~~
writepub
> those taxes are factors into accommodation prices

Citation needed. Accommodation pricing is typically set by supply and demand.
Which is why, last minute hotel deals at steep discounts are a thing.

> Tourists pay real property taxes

Then states/counties should be recovering delinquent property taxes from them

~~~
eppp
There is no citation needed. Property taxes are one of the base costs in
determining the revenue needed for keeping the accommodation provider open. It
then follows that that cost must be paid by the customers if the establishment
is to be profitable. If the business is being operated at a loss on purpose
then this doesn't apply.

The tourists in aggregate are therefore paying the property taxes of the
establishment.

~~~
writepub
> It then follows that that cost must be paid by the customers ..

It absolutely does not follow at all. When costs are disconnected from
pricing, the business undergoes a loss. For instance, many rural Texas cities
have high property taxes, and low demand for hotel rooms. In many of these
places hotels are unviable, because the market would never pay enough to eke
out a profit.

In such places, Airbnb is surprisingly effective, as the renter typically sees
AirBnB income as a bonus, and doesn't rely on it to make a living.

------
hpoe
On the flip side if they just continue to run at a deficit for extended
periods then they have to cut even more as they will no longer be able to fund
what they have.

I get that this isn't an ideal situation but it seems like so often whenever
anyone wants to cut anything its the end of the world. I mean what would you
cut in order to reduce the deficit? Welfare services? Health services?
Emergency services?

It may not be a particularly popular move but I imagine this was part of
people evaluating all the places the cuts could come from trying to figure out
how to cut things to minimize disruption to existing services and then taking
action consistent with a plan.

But I could be wrong, maybe internet commentators that read a 10 minute
article actually have a much deeper and penetrating insight into the finances
of the state of Alaska then the accountants and budget people that spend their
lives doing this? Maybe it is part of an evil plan by the governor to do....
something nefarious. Or maybe it is part of a widespread governmental budget
cuts throughout Alaska designed to try and minimize impact while still trying
to allow them most essential services to remain intact.

~~~
Jtsummers
They need to raise taxes. Alaska has been riding the oil money for a long
time, but that's being reduced every year. Since they didn't invest it wisely,
they have nothing to fall back on. The only way to reduce the deficit is a
combination of eliminating government services and raising taxes.

~~~
seanmcdirmid
If/when oil is done, Alaska will probably depopulate rapidly; they will have
much larger problems than needing to raise taxes.

The governor is doing this not to fill in gaps in the budget, but to increase
the Alaskan dividend all residents get every year. Crazy stuff.

~~~
mywittyname
It's very possible that the majority of Alaskans support the governor's plan.

~~~
Malician
[http://midnightsunak.com/2019/07/08/dunleavys-already-low-
ap...](http://midnightsunak.com/2019/07/08/dunleavys-already-low-approval-
rating-took-a-nosedive-after-vetoes-according-to-poll/)

Dunleavy promised a $6700 dividend without significantly cutting the
University or major operations of the ferry system. Now we're talking about
homeless shelters closing and old folks losing their monthly pittance. Believe
me, people's minds have changed on this very rapidly.

~~~
cl0ne
Yeah, I doubt that most people support Dunleavy. A lot of people are very
angry with him. A few years ago the state could barely afford to repair roads,
which get very rough after freezing and thawing every year. Also, cutting the
ferry system essentially cuts off some people's only means of transportation
out of small towns for months at a time. And there was already not enough
space in homeless shelters in Anchorage.

------
jdmichal
From the discussion 10 days ago:

[https://news.ycombinator.com/item?id=20384388](https://news.ycombinator.com/item?id=20384388)

Didn't click summary: _After_ the cut, Alaska will still spend 3x more than
average per student. And tuition rates are comparatively low.

~~~
wcchandler
Can that 3x cost be attributed to just being in Alaska?

~~~
seanmcdirmid
Also economy of scales sucks since they aren’t educating many students. Still,
I think their costs are lower than Wyoming.

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tsunamifury
I understand a well off nation ruled by democracy due to distributed table-
stakes, and a poor nation ruled by a dictator due to centralized table-stakes,
but I've never known a well off nation to intentionally sabotage its own
table-stakes in order to surrender to dictatorship. Why is this happening? Who
supports it? Why do they think it is necessary?

~~~
brookhaven_dude
Because most of the benefits of the former are getting concentrated into the
hands of educated and urban dwellers. So people want change, but end up
stupidly sabotaging.

Disclaimer: I am not a Trump supporter.

~~~
tsunamifury
I don't think that holds water. In the article, these are the urban dwellers
being sabotaged.

~~~
cultus
More accurately, very wealthy urban dwellers.

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october_sky
Sell off assets? Cut administrators? Drop the presidents pay?

~~~
motivated_gear
No! Think of their families!

The stem guys have it good anyways, lets just cut that!

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supernova87a
Maybe it has something peripherally to do with having chosen a governor who
does things like cutting funding to the Alaska Supreme Court when they issue a
pro-choice abortion ruling.

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cavisne
This is in some ways a preview of why the theory of basic income replacing
other government spending (and therefore being fiscally conservative and
libertarian) is false. Alaska is redirecting money from universities to basic
income (the oil dividend) and it’s considered an outrage. The same thing would
happen for any government program.

~~~
xamuel
Well, in theory, people can use that basic income to pay for school... or they
could, if the school wasn't so bloated and overpriced, which the school has
been getting away with because the government has been giving it so much
money.

~~~
drak0n1c
True, federal subsidies and loans responsible for inflating tuitions
nationwide have reached a total of $120 billion per year.

[https://www2.ed.gov/about/reports/annual/2017report/fsa-
repo...](https://www2.ed.gov/about/reports/annual/2017report/fsa-report.pdf)

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azhenley
As a fairly new tenure-track faculty (not in Alaska), this disturbs me.

~~~
wcchandler
Try to find a private university with a nice endowment. My employer is sitting
on $7.5B. I feel pretty comfortable knowing that.

------
hnruss
51.4% voted for this governor in 2018, so I have to conclude that this is the
outcome that most voters wanted. When you vote for a party that wants smaller
government, it should be no surprise when you get fewer government services.

~~~
TallGuyShort
I'm troubled that we equate 51.4% with "most" (especially since voter
participation tends to be even lower than that). As long as we have to live
with first-past-the-post voting, we need to get rid of this "the voters have
spoken!" mindset - a 1.4% win isn't some kind of democratic mandate.

That said - I too see this mindset that a lot that people will make arguments
about what is and isn't government's business, but will only stick by it when
it suits them. It either shouldn't be an argument in the first place, or it
should be a principle you stand by regardless. None of this "small government"
when it costs you money but "strong leadership" when it puts money back in
your pocket.

------
dv_dt
We are entering a new dark ages ruled by the priests of austerity, unable to
value anything but short-term money.

~~~
AnthonyMouse
The general austerity theory is contradicted by the fact that government
budgets in most of the US haven't been reduced.

The problem is the largest programs that already eat most of the budgets
continue to expand to consume everything that's left. We dramatically increase
taxpayer-funded healthcare spending while doing nothing about underlying
healthcare costs and then wonder where all the money went.

~~~
chillacy
Such a big issue. We all see the high healthcare and education costs and want
healthcare and higher education for all, but our healthcare (current system)
is way more expensive than other developed nations' and college prices have
only increased over time, turning student loans into college administrators.
We'll have to address this inflation either way.

~~~
omegaworks
This is why these universal programs are coupled with monopsony leverage.
Healthcare prices have exploded because the government has been intentionally
hobbled at the bargaining table, legislatively blocked from using its weight
to negotiate better deals for prescription drug prices. Tuition has exploded
because a system of credit has been created that is untouchable by bankruptcy.

These are solvable problems.

~~~
AnthonyMouse
> This is why these universal programs are coupled with monopsony leverage.
> Healthcare prices have exploded because the government has been
> intentionally hobbled at the bargaining table, legislatively blocked from
> using its weight to negotiate better deals for prescription drug prices.

"Monopsony leverage" and "bargaining" is just price controls. You don't even
need single payer for that if you want to do it, you can just legislate
prices.

The problem is price controls have a long record of being problematic, because
everybody wants lower prices but if you set the price too low you get
shortages. This is complicated in this case by the fact that most of the cost
is R&D, so the thing that isn't supplied isn't pills for already-developed
drugs, it's research into new drugs. And then comparisons to other countries
fall flat because it's a global market, so as long as anyone (i.e. the US) is
paying a lot to create a return for R&D spending, the research gets done and
the other countries get access to it.

So one of the reasons we pay so much more than everybody else is that we
subsidize medical R&D for the rest of the world. Solving that isn't just a
matter of us paying less, it also has to somehow involve them paying more,
unless we want a lot less R&D.

Moreover, a lot of the costs basically amount to regulatory capture or drug
companies outsmarting the government. It's them finding ways to limit
competition for things that should be cheap commodities, or get patents on
things that are only marginally better than the status quo, and use that to
raise prices. So you have to find ways to distinguish that stuff from real
medical advances that are actually worth paying higher costs to get. But if
you can do that then you can restrain that type of behavior without actually
regulating prices, so that genuine medical advances continue to get the
funding they require to be developed. Which is really what we need to do, but
easier said than done.

~~~
omegaworks
>"Monopsony leverage" and "bargaining" is just price controls. You don't even
need single payer for that if you want to do it, you can just legislate
prices.

No, monopsony leverage is not the same as a price control. The minimum price
that monoposony can give you is the cost to produce the given drug. Price
controls allow you to mandate a price lower than their cost to produce, hence
the negative effects you mention.

>This is complicated in this case by the fact that most of the cost is R&D

This is also false. Marketing outweighs the R&D budgets at most private
pharmaceutical companies.

>a lot of the costs basically amount to regulatory capture or drug companies
outsmarting the government

It sounds like you’re advocating for the dismantling of the drug patent
system, which is a far more radical proposal. I agree that regulatory/market
failure also contributes to high costs, it’s why I believe the free market
poorly maps onto the problem of providing healthcare.

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purplezooey
er, nice choice of governor there Alaskans, try again

~~~
dang
Could you please stop posting unsubstantive comments to Hacker News? You've
done it repeatedly, and we're trying for a bit better than internet default
here.

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crb002
Flip side is that all Alaskans have the oil dividend to pay tuition with.

~~~
jimbob45
It's not as much as you think.

t. born Alaskan

