A few days after a powerful earthquake hit the state last November, Alaska Gov. Mike Dunleavy (R) issued an order increasing the power of the state’s budget office, led by a woman who had lived in Alaska a mere two weeks at the time.
In her newly empowered role, Donna Arduin — an infamous budget-slashing expert — and Dunleavy went on cut to hundreds of millions from the state budget. They aim to trim even more in her second year in the remote state.
It’s hardly Arduin’s first rodeo. The budget consultant has served in several Republican-led governor’s offices, slashing state expenses while cutting or resisting efforts to increase tax revenue.
She’s also one of three leaders of the right-wing consulting firm Arduin Laffer & Moore Econometrics. Her partners are “Trumponomics” co-authors Arthur Laffer, the trickle-down economics evangelist, and Stephen Moore, who in May ruefully wished there was a “statute of limitations on saying stupid things” so he could’ve had a shot at joining the Federal Reserve Board.
Moore never made it to the Fed, but his and Laffer’s histories as public figures offer some insight into Arduin’s typically more behind-the-scenes roles.
Laffer made his name as the “father of supply-side economics” during the Reagan years and was just awarded a presidential medal of freedom. He was also one of the architects of former Kansas Gov. Sam Brownback’s so-called “Kansas experiment,” a massive tax cut effort passed by the state’s Republican-dominated legislature in 2012. By 2017, the “experiment” had caused such devastation in the state that the GOP-led legislature voted to hike taxes back up and then overrode Brownback’s veto. Moore also contributed to Brownback’s failed plan.
A study from Laffer and Moore at the time lauding the potential effect of eliminating Oklahoma’s income tax was found to have “fundamental flaws” in its math, three leading economists in the state found in separate papers. Each of the economists, the Oklahoma Policy Institute wrote, “cautions strongly against using it as the basis for public policy decisions.”
While her colleagues were focused on slashing taxes in Kansas, Arduin has been busy trying to impose deep budget cuts in several states.
Since arriving in Alaska last year, Arduin has led the governor’s attempt to cut a whopping $1.6 billion in spending from education, social services, the arts, and nearly every other corner of state government. Between legislative cuts and line-item vetoes, Dunleavy has so far cut “almost $700 million” from the budget in his first year, Arduin said in an interview earlier this month, despite a failed recent attempt by the legislature to override his vetoes.
“We’re about halfway solved,” she said. “We’re going to be looking towards reducing the budget another $700 million next year.”
The University of Alaska’s Board of Regents, at a meeting in which they declared financial exigency last week, sounded less enthusiastic. The institution has been “crippled,” its president said, by the governor cutting roughly 40% of the school’s state funding — over $130 million. Thousands of students across the state found their state-funded scholarships suddenly defunded with the school year looming. “We will not have a university after February if we don’t make a move,” one regent noted.
Another Alaskan who had scheduled a dentures appointment four weeks after having his teeth extracted was left with gums flapping in the wind, after the governor eliminated Medicaid dental coverage for adults. That saved the state $27 million.
But the steep cuts aren’t surprising to Americans in several other states. Following an internship in the Reagan-era Office of Management and Budget and stints at Morgan Stanley and elsewhere, Arduin has crisscrossed the country slashing state budgets left and right.
“I have no sympathy for people who want handouts from the government,” Arduin told Duke Magazine for a 2006 profile.
In an 1995 article on then-New York Gov. George Pataki’s efforts to deeply cut the state’s Medicaid spending, for example, the New York Times quoted Arduin, then Pataki’s deputy budget director, saying of health care services, “We can only hope for the best there. Other industries have had to do it.” After years of tax and budget cuts, New York hit trouble after the September 11th attacks and a recession. But by then, the Chicago Tribune later wrote, Arduin was off to another state, Florida.
As then-Florida Gov. Jeb Bush’s budget director, Arduin pushed a plan that would have empowered a statewide board of appointed doctors, pharmacists and others to decide which drugs could be prescribed using Medicaid funds. To make her point, Arduin pointed to HIV-positive men receiving Viagra prescriptions. “If it were up to me, the state wouldn’t pay for it at all,” she said.
In the process of cutting $8.1 billion over five years in Florida, the Los Angeles Times later reported, “Florida eliminated money for eyeglasses, hearing aids and dentures for poor seniors and forced 55,000 low-income children onto health insurance waiting lists.”
At that point, Arduin was “on loan,” from Bush’s office to then-California-governor-elect Arnold Schwarzenegger’s as an unpaid budget expert, and then as the state’s full-time budget director. Arduin ultimately left California after 11 months as Schwarzenegger’s adviser. An initial budget proposed under Arduin’s leadership cut $274 million from programs for developmentally disabled people, the Los Angeles Times later reported, until furious protest led the governor to reconsider. Overall, the budget deficit she’d sought to tackle only got worse.
“We didn’t solve the problem. We made it worse,” Michael Genest, who worked with Arduin when she was California Department of Finance director and later held the same post, told the Anchorage Daily News in a profile of Arduin last week. “That was the tradeoff.”
One of her partners at the consulting firm, Moore, commented at the time to the Los Angeles Times, “I think that her attitude is, I’ve come and rescued California, and pretty soon it’s time to pass the baton to someone else and go back to Florida or privatize herself in some way.”
Later, in Illinois, Arduin spent just eight months as Republican Gov. Bruce Rauner’s budget adviser, receiving an estimated $165,000 for her work after failing to come up with a budget the Democratic legislature found palatable. Rauner called Arduin “the smartest state government budget person in America.” (He was subsequently defeated in a reelection bid.)
Just as Arduin’s bids to slash budgets in California and Illinois met resistance outside the governor’s office, many Alaskans are frustrated with her lack of familiarity with their unique state.
The leader of a tribal consortium, Melanie Bahnke, told Arduin not to “use the word ‘our’ when referring to our people, our state and our issues” at an event sponsored by Americans For Prosperity, the Anchorage Daily News noted.
That might sound withering, but by now, Arduin has grown used to such critiques, as she noted to Duke Magazine in 2006.
“I joined government to shrink it,” she said.
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