WATCH: Debate for the State - Where the candidates stand

Channel 2 News and Alaska Public Media hosted a debate between Alaska candidates for governor, Democrat Mark Begich and Republican Mike Dunleavy Thursday evening.

Both candidates said they’d make crime and public safety a priority in their administration. They both pledged to return the Permanent Fund Dividend to its original formula, with differing plans on how to keep the formula sustainable.

Republican Mike Dunleavy focused many of his responses on managing the state’s budget and programs, and evaluating existing programs, while Begich said he’d take a balanced approach to supporting resource development in the state and raising revenues, while putting the permanent fund and education funding in the constitution.

Specific cuts they’d make? Begich said he’d work to reduce the cost of paperwork in the Medicaid program, which he says amounts to $240 million -- 30 percent of the program’s budget. Dunleavy said he’d cut the fast-rail study from Mat-Su to Anchorage, climatologists, and look at whether to reapportion 2,000 funded but unfilled positions in the state.

When it comes to raising revenue for the state, neither gave a specific plan. Begich said he’d consider an income or sales tax, and pointed out the money that out-of-state workers earn in the state that goes straight out of the Alaska economy. Dunleavy specified his cuts above, and said he’d look into reviving a constitutional appropriation limit.

Here are some of the highlights. Watch the full debate above for all the questions, including questions the candidates asked each other:

The PFD is important. The action that the Legislature took over the last three year sput an impact on working families disproportionately to try to solve this budget. It was an unfair way to deal with it.

But how would I do it? Right now the corpus of the fund and its retained earnings have about $65 billion. The earnings reserve has about $18 billion in it right now which the legislature can access with a simple majority vote. I would put a chunk of that in the corpus, keep it away from these politicians.

The next thing I would do is a Percent Of Market Value. Making sure we have a formula, so 50% as that formula lays out, would go right into the permanent fund dividend. And constitutionally protect it. The only one in this race that has talked about constitutionally protecting it. Keeping it in your hands. The value of that would be about $2,100 this year. If you’d leave it where it is today, it will be in the hands of politicians, and they’ll debate this off and on, and your dividend over time will disappear.

I’ve fought hard to protect the PFD. The PFD’s been an institution in Alaska for almost 40 years. The Permanent Fund was established in the late ‘70s by the people of Alaska to save wealth from that period of time for future generations. The PFD program came in shortly thereafter. It’s worked beautifully. The PFD was never the problem. The problem has been overspending by state government over the years.

You will have a full PFD under my administration. I fought hard. I voted against SB 128, which was the first attempt to change the PFD. I voted against SB 26, which was another attempt to change the PFD. I submitted bills, SB 1 to return the full PFD. The current calculation that’s been on the books for years is the calculation that I will use. And I can ensure Alaskans that one of the first orders of business, when I get into the governorship, is to return the full PFD to the people of Alaska.

I think it should be a 50/50 approach, like it has been for decades. The people of Alaska never complained about the size of the PFD when it was subject to the calculation that’s been on the books forever. If it was $700 a year, people didn’t complain. If it was $900 a year, people didn’t complain.

People started to get agitated when the governor vetoed a portion of their PFD. The reason they did that was because they felt that government was sticking their hands in a system that actually worked well. Going forward, we may need to have discussions as to what this is going to look like. But it must involve the people of Alaska. We want to take a look at whether the Permanent Fund needs to have a POMV approach, but we need to have a discussion with the people of Alaska, and they need to be involved in any changes to the PFD Program or the Permanent Fund.

What has happened, first the constitutional budget reserve, which had 14, 16 billion dollars in it. Eighty percent of that is gone because legislators took that money. Now, the way you solve this problem, you’ve got to put the PFD into the constitution. The earnings reserve, which is a critical part of this, again, the legislators have access to this. You’ve got to take that off the table, put it into the corpus. If you put it in the corpus, the politicians can’t touch it. The other idea is you’ve got to make sure it’s sustainable. The idea that I’ve laid out is 50 percent going to the permanent fund dividend, constitutionally protected, voted on by the people, keep it out of the hands of politicians. I’ve not heard Mike say that. He talks about an advisory vote, which means it goes back to the hands of politicians. No disrespect to them, I don’t have a lot of faith that they’ll do the right thing over the long term. We need to protect this. The other half, I’ve suggested to go into education funding and constitutionally protect the education funding over the long haul.

I favor a vote going to the people, either an advisory vote, and/or a constitutional amendment. In state affairs, in which I was the chair, I moved two bills out of state affairs that would have constitutionalized the permanent fund. I think it does need to be protected. My point in what I was referencing earlier was: It worked well for years, until government put its fingers in it, but I think it’s time that we have a discussion on what this fund and what the PFD is going to look like going forward, and I think the people need to be involved.

I think there’s a couple things you can do. I’ve talked about how you can do some reforms on Medicaid, that $800 million piece of the puzzle. I support Medicaid, I think it’s an important part for our working families. But I do believe through some innovative approaches-- 30 percent of the cost of Medicaid is paperwork, moving paper back and forth, I think there’s significant opportunity there. But at the end of the day, you know I know my opponent talks about trust. You have to be honest with the people. We’re going to have a broad-based, some sort of revenue stream to ensure that we have longevity. You cannot just bank on the high price of oil. You cannot hope –today it’s at $78, and balance it out. That’s why we’re in this problem. We need to have a balanced approach. Maybe today it’ sat $63 a barrel for our budget, maybe you put it at $65, whatever goes above that, you put it aside, back into the constitutional budget reserve, to protect for a really down side, or put it into one-time expenditures. But if you just plan it for the high price of oil, we will be in this problem and the next generations will pay the price, and that is not acceptable to me.

I think there’s a variety of revenue sources: Income tax, sales tax. You know we have to figure out how to get 21 House members, 11 senators to vote for it. I’m open for the options. But I will say this. Over $2 billion dollars from outside workers that come up to our state, use our services, don’t pay anything, but we pay the bill for them. We need to have a revenue stream that ensure we capture those folks so they pay for some of the services.

When folks talk about taxes, they don’t go into details. What kind of a tax, how large of a tax? What percent? Who gets exempted? How long does it go on for? What does it really collect? And what are the behaviors that a tax will do? We don’t have those discussions. We just talk about a tax as if it’s some type of a magical instrument, that if you just put a tax on the books, everything will be fine. You still have to manage the government better. In the 80s, the people of Alaska put into the constitutional appropriation limit, to try and ramp down and confine the legislature’s ability to spend a growing operating budget.

I think we need to revisit that amendment. I think we need to ramp that amendment down to around $4 billion dollars and allow that to grow at about 2 percent a year. Once you do that, you have to manage your programs better before you even talk about taking the PFD or a tax, you need to put those instruments in place, because if you don’t, the government will continue to grow out of control, and will be going to the people of Alaska year after year for more taxes or more permanent fund take.

$ 4.5 million fast rail study from Mat-Su to Anchorage, I would eliminate that. I would look at eliminating climatologists. We have over 2,000 funded but unfilled positions in state government. I would look at those positions to see what positions and what funding we could move to other parts of government to reduce the size of government.

I’ve been an educator my entire career. I spent 19 years in Rural Alaska. Alaska’s always been concerned about inputs, meaning the government. How much money do we get to put into something. But really, we’ve really failed across the board on demanding outcomes.

When I’m governor, I’ll make sure that all 3rd graders can read by the time they leave 3rd grade and go into 4th grade. They’re going to be able to read at grade level, because that is a gatekeeper skill for any other course, any other endeavor they’re going to pursue. I would also make sure that by 8th grade, 9th grade at the latest, all of our kids are proficient in algebra. That too is a gatekeeper course. And I would make sure that our career education our career tech and high school is also one of quality that has outcomes, but each of these approaches have to demand the outcomes and we have to have reading specialists that are trained up.

We have to make sure that from the governor on down, we expect that these outcomes in reading proficiency and algebra and career tech are there. How do we do that? We have to reallocate resources to make sure that we’re focused on those three core areas. If you do that, you’re going to see scores go up, and you’re going to see kids have more opportunity.

As I said earlier about the permanent fund dividend, 50 percent of the funding source that we would put, we would make sure that education is fully funded in the constitution. This has been the problem. The legislature every single year puts it on the chopping block at the end of the year. Teachers aren’t sure if they’re going to get a pink slip or not, parents aren’t sure if their favorite teacher is going to be back because of the budget cuts.

The idea here is to make sure it’s constitutionally protected, but also adding in Pre-K. The best investment we can make is for Pre-K. 90 percent of brain development occurs for kids between 0-5. This is an investment we cannot forget about and I want to make sure that’s funded. But also we need to grow our own. Only about 20 some percent of our educators are from Alaska. Our university system has started a program. We want to expand it to make sure we are educating, or putting into place people from Alaska to work in our education system. And we need to make sure it is expanded. To make sure we have opportunities for young people, not only to go on to 2 and 4-year colleges, but vocational ed, internship programs, all the types of things we need in this economy more than ever.

My first order of business would be to assess the status of our Medicaid program. In other words, the management issues again. We have reports that we’ve overpaid providers anywhere from $78 to $160 million that we’re going to have to claw back, or receive penalties from the federal government.

So the first thing I’d want to do is make sure that those programs are being run well. I have no intention of kicking people off of health care. I think all Alaskans should have access to good quality health care. But once again, we need to manage these programs well. We need to take a look at how these programs are actually being implemented. You read the paper, you see articles of fraud in Alaska, our behavioral health approach is falling apart because of mismanagement in Alaska. We need to manage these programs better, but I don’t have any intention of kicking people off of our healthcare programs.

I just heard your response, Mike. You didn’t’ support Governor Walker when he put 44,000 people on Medicaid. He had to do it by executive order because members like you and others in the legislature wouldn’t support it. And I know in this debate, you’ve had different views on it.

But no, I think Medicaid is an important part of making sure health care is available for Alaskans. There’s a lot of working families who depend on that to make sure they have the health care they need to ensure they can g to work or go to school or whatever they’re doing to make their life more productive. And the Medicaid program’s been very successful, but we can improve it.

For example, there’s not a good preventive health care within the Medicaid system. If you could save 5% just on better preventive health care, you’ll save almost $40 million in the program. I also think there’s another way of streamlining that paperwork. 30% of the cost. $240 million is in paperwork alone. I think there’s ways to shave 10, 15 percent of that, making sure we have better dollars being spent, and making sure we have quality care. But it’s an important part. It’s provided an incredible amount of jobs, and $1 billion in federal dollars to our state, providing new opportunities for our healthcare systems.