By SHANNON HAUGLAND
Sentinel Staff Writer
Sen. Bert Stedman said the budget vetoes announced this morning by Gov. Mike Dunleavy were not particularly surprising but he was pleased at least to see funding restored to the Alaska Marine Highway System that will allow it to operate through the winter.
The vetoes include a 50 percent cut to the school bond debt reimbursement program, a $130 million cut to the University of Alaska system, elimination of forward funding in education for fiscal year 2021, and a $50 million cut to Medicaid, among others.
Rep. Jonathan Kreiss-Tomkins also wasn’t surprised by today’s announcement.
“I have expected these vetoes since the day he released his budget in February,” Kreiss-Tomkins said. “They were always coming – it’s easy to forget, but they were always coming. ... Overall the governor’s actions are destructive to the Alaska I want to live in, and that most Sitkans want to live in.”
Stedman, who represents Sitka, Ketchikan, Petersburg and other smaller Southeast communities, said, “We still have to figure out the impacts of the vetoes and put them on the table, and figure out how to go forward.”
Stedman, who was in his Ketchikan office today, is co-chairman of the Senate Finance Committee, and in that capacity had a brief preview of the vetoes in a conversation with the governor at 9:30 a.m. today, more than an hour before Dunleavy’s announcement.
Stedman said the impact of the vetoes to his district won’t be known for a few days, but they were about what he expected, based on the governor’s proposed budget in February and conversations with the administration, including today’s.
“We’re still going through the list,” he said. “The main thing is the marine highway was not reduced on the operating side from what was worked through with the Office of Management and Budget in the session.”
The governor had announced a drastic reduction in operating funds for the ferry service from last year’s $140 million to only about $44 million in the FY 2020 budget. The Legislature added $52 million, which was not vetoed, Stedman said. The resulting $96.4 million operating budget should allow the Marine Highway to offer service through the winter, he said.
Stedman said his biggest surprises in the vetoes were elimination of the Senior Benefits program and the 50 percent cut in the school bond debt reimbursement program, but he said neither was “totally unexpected.”
“It’s going to take us awhile to sort it out – we’ll be laying it all out in the coming weeks,” the senator said.
He said he expects the major cut to the university system will not affect rural campuses like Sitka’s as much as the main campus in Fairbanks, since Sitka’s programs at the University of Alaska Southeast actually generate revenue for the system.
“They’re a little cash cow for the university, and I’m expecting (rural campuses like UAS-Sitka) to come through in pretty good shape,” Stedman said.
He said he believes Sitka is well-equipped to weather the cuts in the school bond reimbursement program, which will cost Sitka $1 million.
“I fully support funding the school bond debt reimbursement. Some communities are in a better position to respond than others,” he said. “I would expect Sitka to weather the storm fairly well. It affects rural schools in unorganized areas as well.”
Kreiss-Tomkins said the loss of half of the bond debt reimbursement program will result in rising costs to Sitkans.
“Sitkans’ taxes are going to go up because of school bond debt reimbursement and they can thank the governor for that,” he said. “The governor just raised Sitkans’ taxes.”
As to the Senior Benefits program, which disburses funds to low-income seniors, Stedman said he believes the state should be able to solve its fiscal problems “without impacting seniors.”
“It’s going to affect the most needy of seniors,” Stedman said.
Stedman said he will continue work to transfer funds from the state’s earnings reserve into the corpus of the Permanent Fund to protect the fund.
The governor also announced eliminating operating funding for public broadcasting and eliminating funding the Alaska State Council on the Arts, which Stedman said was expected.
“He never supported funding them when he was in the Senate,” Stedman said.
Becky Meiers, KCAW-FM general manager, said KCAW had expected the cuts, and will not be reducing service as a result.
“With the satellite infrastructure intact, Raven Radio won’t be going anywhere,” she said. “Our priority is continuity of service.” State funding accounted for $76,000 of the $515,000 operating budget at the community radio station, she said.
The cuts to the arts council was made “with the intent of privatizing the council,” the veto document says.
One cut is to “delete general fund program receipt authorization for the Mt. Edgecumbe High School Aquatic Center,” the veto announcement says.
“The Department of Transportation & Public Facilities’ property disposal report recommends to sell or transfer the Center,” states the note on the $250,000 cut.
The Legislature is on a break, but is scheduled to meet in its second special session starting July 8 and a third session is expected. Still left to be addressed are the capital budget, supplemental budget for fiscal year 2019 and items left related to the fiscal year 2020 operating budget.
But Stedman said when it comes to a possible override of any of the vetoes, he considers it “probably unlikely.”
“It’s not the preferred management strategy of the finances of the state,” he said.
Kreiss-Tomkins said there are currently not enough votes to override the governor’s vetoes.
“Will there be enough Republicans to break with the governor to override the vetoes?” he said. “There’s some, but not enough at present.”
