Alaska’s New Governor Slashes $444 Million From State Budget

July 2, 2019 by Elin Johnson

Alaska Governor Mike Dunleavy cut $444 million from the state’s operating budget  last week, a move he said was critical to moving closer to a balanced budget without raising taxes or reducing the annual Permanent Fund dividend paid to every Alaskan.

The move touched off a firestorm of criticism of the government and sustained calls for the legislature to override Dunleavy’s cuts. That will only happen if three-quarters of the legislature’s 60 members heed those calls. 

There are other voices, however, those who are praising the new governor for attempting to rein in a state government they believe has grown too large.

The deadline for an override is the fifth day of the special session that begins July 8.

Meanwhile the governor has said he simply doesn’t believe Alaska can “continue to be all things for all people.”

The single biggest target of Dunleavy’s line-item veto was the University of Alaska, which lost $130 million on top of a $5 million cut already approved by the legislature.

All told, the cuts represent 41% of the state’s support for the university system.

Included among the 181 other line item cuts was a $2.7 million reduction in public broadcasting funding, and $3.4 million cut from the Ocean Ranger cruise ship pollution inspection program. 

Dunleavy also vetoed $335,000 from the Alaska Supreme Court’s budget, a move widely seen as retribution for the court’s ruling in February that the state constitution prevented a ban on abortions.

Homlessness support services were cut from the state budget from $13.7 million to $2.6 million. 

Dunleavy also shut down the Alaska Senior Benefits Payment Program ending. The program gives a monthly allowance to senior, low-income Alaskans. It serves 11,320 seniors. 

According to the U.S. Census Bureau, Alaska’s total population in 2018 was 737,438. 

The Republican was elected in November 2018, after running on promises of reducing citizens’ dependence on the state.

The Permanent Fund Dividend was one of the deciding factors during the recent gubernatorial election. The fund was created to reimburse Alaskans for the use of their land and other resources for oil and gas exploration. 

Each year, Alaskans get a payment from the fund, which has ranged over time from a low of $300 to as much as $2,000. In theory, it is intended to far outlast the amount of oil under the Alaskan tundra.

The Dunleavy administration said the budget cuts had to be made in part to safeguard the fund payments.

But Alaska House Speaker Bryce Edgmon, an Independent, said in a written statement the governor’s budget presents an “imminent threat” to Alaskans.

“The fundamental question is now squarely before Alaskans. What’s more important: a healthy economy, our schools, universities, and seniors, or doubling the Permanent Fund Dividend at the expense of essential state services? The governor has made his choice clear,” Edgmon wrote.

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