HANGING ART – Raven Shaw hangs up art at her booth for the Sitka Artisans Market this afternoon at Harrigan Centennial Hall. Her business, Raven's Random, sells original art stickers and prints. The market opens tonight and runs through Sunday. (Sentinel Photo by James Poulson)

Gov Cuts ‘Devastate’ UAF, Slash Programs

Associated Press
and Sentinel Staff

    JUNEAU (AP) — Gov. Mike Dunleavy slashed the University of Alaska system budget by $130 million on Friday, part of a series of vetoes he characterized as difficult but necessary amid an ongoing state deficit.
    Dunleavy, a Republican, also cut state support for public broadcasting, reduced spending for Medicaid and eliminated a program that provides money to senior citizens who have low or moderate incomes. The cut to the university is on top of a $5 million cut approved by lawmakers.
    Dunleavy, in a letter to legislative leaders, writes the budget “focuses on the state’s basic responsibilities while understanding our fiscal constraints.”
    Dunleavy told reporters he has faith in university leaders but said he doesn’t think the university system “can be all things to all people. And I think that’s, generally speaking, the state of Alaska. We can’t continue to be all things for all people.”
    He said there is no easy way out of the state’s budget predicament and suggested a full payout to residents this fall from the state’s oil-wealth fund, the Alaska Permanent Fund, could help meet the needs some Alaskans have. The state has wrestled for years with a budget deficit that has persisted amid low to middling oil prices.
    “We have to close this gap,” he said. “This budget touches practically every Alaskan. It’s not necessarily going to be easy. We never said it would be. But we do believe that in some of these cases, a full, statutory PFD could mitigate some of the issues.”
    PFD refers to the Permanent Fund dividend. Lawmakers have yet to finalize this year’s payout, which is the subject of an upcoming special session. Dunleavy has maintained the Legislature should follow a longstanding formula that has not been followed the last three years amid the budget deficit. A full dividend would cost an estimated $1.9 billion and equate to checks of around $3,000 for residents.
    Some legislators say the formula is unsustainable, particularly as the state has been using fund earnings — long used for dividends — to help pay for government.
    Minority Senate Democrats denounced Dunleavy’s budget as short-sighted.
    “The governor’s vetoes today would crash Alaska’s economy and trash our future,” Sen. Jesse Kiehl, a Juneau Democrat, said in a statement. “Now it’s up to the Legislature to protect our state, for this generation and the next.”
    Lawmakers have the ability to override budget vetoes if they can muster sufficient support.
    Lawmakers themselves have faced divisions ahead of an upcoming special session, with legislative leaders proposing to buck Dunleavy’s chosen meeting location and other lawmakers insistent on following Dunleavy’s call to meet in Wasilla.
    Dunleavy said he plans to look at his options but hopes the Legislature meets in Wasilla.
    The state, which had long relied on oil to help pay for government, last year began using permanent fund earnings to help cover expenses. Alaska has no personal income or statewide sales tax and there was no consideration of any such taxes this year.
    Dunleavy’s predecessor, independent Gov. Bill Walker, unsuccessfully pushed tax proposals as part of a fiscal plan. Dunleavy said he’s taking a different approach that includes reduced state spending.  
    Jim Johnsen, president of the University of Alaska, called the university cuts “devastating,” and called an emergency meeting of the regents.
    The Anchorage Daily News said he told the regents that the university system will focus “wholly and strongly” on advocating that the Legislature override the governor’s veto.
    The Anchorage newspaper said Johnsen said cuts of $30 million to $60 million would have been “manageable,” but the veto adding $130.1 million to the $5 million cut approved by the Legislature “is more than twice the most extreme cut we anticipated,” and could result in the reduction of roughly 1,300 positions. He said furlough notices will be issued immediately to all university system staff.
    The state House majority coalition said Dunleavy’s budget vetoes “present an imminent threat to our economy and to all Alaskans, while continuing to fail to address the root cause of our state’s financial problems.”
    Speaker Bryce Edgmon said:
    “The Legislature presented Gov. Dunleavy with a responsible operating budget that struck a balance between protecting essential services and making tough but necessary budget cuts. Today, the governor made major vetoes that will have drastic, negative impacts on all Alaskans.
    “The fundamental question is now squarely before Alaskans. What’s more important: a healthy economy, our schools, university, and seniors, or doubling the Permanent Fund Dividend at the expense of essential state services? The governor has made his choice clear.”
    Under the state constitution the Legislature has until the fifth day of the upcoming special session to override the vetoes, if it chooses. An override would require the approval of 45 of the Legislature’s 60 members.
    Edgmon said after the first special session that the political landscape “does not seem to favor the 45-vote threshhold” under most circumstances.
    An item of particular interest in Sitka that is on the veto list is elimination of $250,000 in funding for the Mt. Edgecumbe High School Aquatic Center, which the Dunleavy administration proposes to sell.
    Among the 182 vetoes announced today, in a list compiled by the Anchorage Daily News:
    – $50 million reduction in Medicaid funding
    – elimination of the state senior benefits program
    – Alaska State Council on the Arts, $2.8 million
    – the one-time $30 million boost for K-12 schools
    – advance funding for K-12 schools in the 2020-2021 school year
    – direct state support for public radio and TV, $2.7 million
    – the ocean ranger cruise ship pollution inspection program, $3.4 million (This program was entirely funded with fees from the cruise ship industry and does not save tax dolalrs.)
    – funding for the “Online with Libraries” and “Live Homework Help” programs at public libraries, $800,000
    – $7.5 million reduction in adult public assistance programs
    – adult dental care under Medicaid, $27 million
    – a prosecutor assistant at Utqiagvik, $533,000
    – Village Public Safety Program, $3 million, plus another $3 million from the current fiscal year budget.
    – the Alaska wing of the Civil Air Patrol, $250,000.
    – community assistance payments to municipalities statewide, $30 million
    – school bond debt reimbursement, $48.9 million
    – $5.4 billion of a $9.4 billion transfer from the Permanent Fund’s earnings reserve to the corpus of the fund

Legislators Pressured On Dividend Amount

Associated Press
    JUNEAU (AP) — Alaska legislators face mounting pressure to decide the annual dividend paid to residents from Alaska’s oil-wealth fund, with Gov. Mike Dunleavy threatening additional special sessions for anything but a full payout.
    The amount expected to be paid this fall is unresolved as lawmakers grapple with how the Alaska Permanent Fund dividend program should look going forward.
    To Dunleavy, it’s simple: follow a longstanding calculation in law, which would equate to checks of around $3,000 each, and send to a vote of the people proposed changes to the dividend.
    He told reporters today he’s determined to get a full dividend this year, even if that means repeated special sessions. He spoke in his hometown of Wasilla, outside a middle school, his recommended venue for a July special session.
    A governor can call a special session, but legislators don’t have to act on any of the agenda items. Dunleavy’s predecessor, Gov. Bill Walker, found that out when he repeatedly asked lawmakers to consider taxes to help address the state’s budget deficit.
    Legislators also can call themselves into a special session. In 2015, they snubbed Walker’s call to meet in Juneau by holding their own special session in Anchorage.
    Some legislators hope a legislative working group can provide a path forward on dividends. Others are skeptical.
    House Speaker Bryce Edgmon said he thinks the group’s eventual recommendations will be seriously considered. The Dillingham independent said many legislators believe that if they want to put a longer-term solution, they have to deal with it this year.
    “To do it next year, in an election year, I think would be virtually impossible,” he said.
    Soldotna Republican Sen. Peter Micciche said a durable solution “is unlikely to be delivered without a serious formal consideration on how the people of Alaska feel about a change.” Micciche also noted Dunleavy can veto bills he doesn’t like. Lawmakers have the option of overriding a veto if they can muster sufficient votes.
    During a just-ended special session, the Senate by one vote failed to pass a full dividend, with a prominent supporter absent. It later failed to revive the bill for another vote.
    The Senate included a full payout in its version of the operating budget. Senate President Cathy Giessel has said members of her GOP-led majority have expressed willingness to support a full dividend this year if it’s coupled with changes going forward.
    The House soundly rejected a full payout. But minority Republicans, who pushed for one as part of debate on a state infrastructure budget, refused to offer the necessary support for key funding provisions for that budget, leaving that, too, unresolved.
    Dunleavy said if the dividend is resolved, he thinks that budget can come together quickly.
    Sen. Bill Wielechowski, an Anchorage Democrat, said Dunleavy needs to work with legislators.
    “There’s lots of compromises that could be out there. But they’re compromises, and if everybody stays hardened in their positions, we’ll never get to that,” he said.
    Wielechowski has argued the debate isn’t complete without looking at things such as oil-tax changes. Dunleavy sees room to reduce the operating budget, which he told reporters recently needs to be smaller.
    The dividend for years was paid without a hitch, using a formula based on an average of fund income over five years. In 2012, residents received $878. In 2015, they got $2,072.
    In 2016, Walker reduced the amount available for the checks, an action upheld by the state Supreme Court after Wielechowski and others sued.
    The court’s decision said the dividend absent a constitutional amendment must compete for funding like other state programs. Checks the last two years have been capped at $1,100 and $1,600.
    Some legislators, frustrated by what they see as arbitrarily picking check sizes, argue the existing calculation should be followed. The earnings reserve was valued at $19 billion at the end of April.
    But some worry the Legislature, which spent billions in savings as it struggled to address the deficit, will use the earnings reserve as a piggy bank. Last year, lawmakers began using fund earnings, long used to pay dividends, to help cover government costs. A law passed last year seeks to limit withdrawals from earnings for dividends and government. Whether lawmakers adhere to that limit remains unclear.
    “Hopefully the public’s seeing the urgency of the need to revisit the formula, because there’s only so much cash,” said Senate Finance Committee Co-chair Sen. Bert Stedman, a Sitka Republican. He said he’s concerned that Alaskans have been “led to believe that we can just spend out of the earnings reserve and not worry about it.”

Environmentalists Sue Over Ice Seal Habitat

Associated Press
    ANCHORAGE (AP) — An environmental group sued the Trump administration today for failing to designate critical habitat for two species of seals that rely on sea ice off Alaska’s northwest coast.
    The Center for Biological Diversity sued the Department of Commerce and the National Marine Fisheries Service for not designating critical habitat for threatened ringed and bearded seals. Agency spokeswoman Julie Speegle said by email the agency does not comment on ongoing litigation.
    Designation of critical habitat for a threatened species is required by the Endangered Species Act a year after a listing. Federal agencies that authorize activities such as oil drilling within critical habitat must consult with wildlife managers to determine if threatened species will be affected.
    Center for Biological Diversity attorney Emily Jeffers, who drafted the lawsuit, said by phone from Oakland, California, that additional protections are needed for ringed and bearded seals, which already are losing habitat because of climate warming.
    “It’s where the rubber hits the roads in terms of actual protections,” she said.

An adult ringed seal is pictured near Kotzebue in a 2009 National Oceanic and Atmospheric Administration photo. (Mike Cameron/NOAA via AP)

    Ringed and bearded seals live in the Bering and Chukchi seas. Though their numbers have not declined, they were listed as threatened in 2012 because of projected sea ice loss.
    The state of Alaska, oil industry groups and others sued in two lawsuits and the listing was vacated. However, the 9th Circuit Court of Appeals last year reversed those decisions and said long-range data demonstrating a species decline is not required to adopt conservation policies to prevent the decline.
    “If you wait until their demise is certain, it’s too late,” Jeffers said Thursday.
    Ringed seals are the smallest and most numerous of Alaska’s ice seals and the main prey of another threatened species, polar bears.
    Ringed seals thrive in completely ice-covered Arctic waters because they maintain breathing holes with thick claws.
    After snow covers breathing holes, females excavate snow caves on sea ice. Inside those lairs, they give birth to pups that cannot survive in ice-cold water until weeks later when they have grown a blubber layer. Early breakup of sea ice, less snow and even rain threatens lairs, exposing pups to polar bears, Arctic foxes and freezing temperatures.
    Bearded seals get their name from short snouts covered with thick, long, white whiskers. Bearded seals give birth and rear pups on drifting pack ice.
    NOAA Fisheries officials announced Wednesday that at least 60 ice seals, including ringed, bearded and spotted seals, have been found dead this week on coastlines north and south of the Bering Strait. The cause has not been determined.
    The agency declared an unusual mortality event following abnormal molting and deaths of ice seals and walruses from 2011 to 2016. A definitive cause was not identified.
    The agency estimated that 657 seals were affected over those six years. Biologists confirmed symptoms in 233 dead and stranded seals, 179 seals killed by hunters and 245 live seals checked in health assessments.

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