Daily Sitka Sentinel

Gov Cuts ‘Devastate’ UAF, Slash Programs

By BECKY BOHRER
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