(SitNews) Juneau, Alaska - Alaska Governor Michael J. Dunleavy today signed the FY2020 budget with approximately $400 million in line-item vetoes. With an overall reduction in state spending of $678 million, the Governor’s actions today eliminate nearly 50 percent of the state’s deficit this year. Dunleavy says he hopes a “two-year process will put Alaska in a position of balancing the budget without new taxes or a reduction of the traditional Permanent Fund Dividend.”

After signing the operation budget, Governor Dunleavy spoke directly with Alaskans outlining the FY2020 budget. In his comments the Governor said, "The budget goals and priorities for my administration have been very clear: maintain and protect our reserves… expenditures cannot exceed existing revenues… the budget is built on core functions… and no additional taxes on Alaskans.

Dunleavy said, "But due to the legislature's limited action on reducing the deficit, today I've taken a number of important steps to balance the budget."

The Governor went on to say he identified approximately 400 million dollars from the budget that will be subject to his line item veto. "The state's fiscal reality dictated many of these changes"" said Dunleavy.

"These vetoes should not come as a surprise to Alaskans as they have been part of our proposal since February. Ultimately, the decisions that were made were difficult, but we feel that the State government will still be able to deliver essential services to Alaskans," stated the Governor.

"Additionally, after 151 days of work in Juneau, the Legislature still has significant tasks to complete, so beginning July 8, I have called the Legislature into special session in Wasilla to pass legislation that will pay a full statutory dividend to eligible Alaskans. Once they complete that task, they will need to properly fund a Capital Budget as well," stated the Governor. (Watch the video for the Governor's full comments)

Should the legislature decide to override the Governor's vetoes, it will take 40 votes to call a Joint-Legislative Session. 

Alaska Senate President Cathy Giessel (R-Anchorage) responded to Governor Mike Dunleavy’s announced vetoes to the state’s operating budget in a prepared statement. “Over the past several years, the Senate has focused on reducing government spending. In making those reductions, we understand the importance of being careful to protect both the state’s economy and core services Alaskans count on, mandated by the Alaska Constitution," said Giessel. 

Giessel said, “Protecting the Permanent Fund and prioritizing essential services were among the guiding principles of this Senate. It is those principles that will continue to guide us as we consider each of the vetoed budget items in the coming days.” 

Several Senate Democrats also commented on the Governor's vetoes announced today and expressed their concerns.

“Governor Dunleavy simply doesn’t value public education in Alaska. The majority of his cuts cripple our University system - which should be a world-renowned leader in Arctic and global research, and takes away certainty for public schools, educators, and families,” said Senate Democratic Leader Tom Begich (D-Anchorage). “The consequence of Governor Dunleavy’s mission will be to drive young adults and families out of this state, which in turn will have a significant impact on our economy.”

“The University has been on the chopping block for the past four years. The legislature has made great strides in working with the University to cut costs but also make efforts to turn our University into a magnet for the best and brightest,”said Senator Scott Kawasaki (D-Fairbanks) . “Governor Dunleavy continues to exemplify his contempt for quality pre-K through University education in Alaska. We must shed this style of politics, unite around a common vision for Alaska, and come together to build a University we are all proud of.”

“Governor Dunleavy is continuing his war on seniors by completely defunding the Senior Benefits program that thousands of fixed low-income seniors use to buy groceries, medicine, and energy,” said Senator Elvi Gray-Jackson (D-Anchorage). “These are Alaskans who built this state, and I will work diligently with my colleagues to overturn this action and give seniors the surety they respectfully deserve.”

Senator Gray-Jackson nor any other Senate Democrat made any comment on cuts to Alaska Permanent Fund Dividends for the fixed low-income seniors which would amount to significantly more than the cuts to the Senior Benefits Program. The Alaska Senior Benefits Program provided as little as $76 per month ($912 annually) up to $250 each month depending on income. However, due to no funds in the program, the program suspended funds to those receiving $76 per month back in May 2019. No action was taken on this elimination by the Legislature. Under the Senior Benefits Program the lowest income seniors received between $2,100 to $3,000 annually. The income limits for each payment level were tied to the Alaska Federal Poverty Guidelines and are changed each year as the poverty level changed. The 2019 Alaska US Poverty Guidelines for income for one is $15,600 annually and for a family of two at $21,130. (For a family of 4, the 2019 guidelines set the poverty level in Alaska at $32,190).

“I continue to be amazed by this Governor’s lack of compassion, vision, and ability to work with others to build a better Alaska,” said Senator Donny Olson (D-Golovin). “Stripping millions of dollars out of Medicaid and turning thousands of the most vulnerable Alaskans to expensive emergency room visits that will be passed on to all consumers is short-sighted, and exhibits his lack of understanding of the needs of all Alaskans.”

“Governor Dunleavy has cut resources for kids, seniors, and the most vulnerable Alaskans, but leaves unscathed the $1.2 billion in oil tax credits to the wealthiest corporations in the world,” said Senator Bill Wielechowski (D-Anchorage). “We must refocus our priorities on providing opportunities for all Alaskans to succeed, not only the wealthiest among us.” 

“Governor Dunleavy demands a false choice between smaller Permanent Fund Dividends and crashing Alaska's future,” said Senator Jesse Kiehl (D-Juneau). “The governor’s vetoes today would crash Alaska’s economy and trash our future. Now it’s up to the legislature to protect our state - for this generation and the next.”

In a news release from the Alaska House Majority said Gov. Dunleavy's budget vetoes present an imminent threat to Alaska's economy and to all Alaskans, while continuing to fail to address the root cause of our state’s financial problems.

Alaska House Speaker Bryce Edgmon (I-Dillingham) said in a prepared statement, “The Legislature presented Governor 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."

On behalf of the House Majority, Edgmon said, "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.”

Alaska House Minority Leader Rep. Lance Pruitt (R-Anchorage), in a prepared statement said, “This entire session, the House Republican caucus has been united behind the idea that government should be smaller and should spend less, and we remain committed to that principle. Over the coming days, we will be analyzing the details of each reduction as we continue to advocate for authorization of the Permanent Fund Dividend.”

Pruitt said, “If our caucus does decide to revisit any of the governor’s reductions, we will do that through the capital budget or a supplemental budget, and not through the process of veto override. The governor has already said that he will add the capital budget to the call once the legislature authorizes the Permanent Fund Dividend as required by law.” 

“The Majority has wasted a lot of time this year," said Pruitt, "but I do believe they have an opportunity to redeem themselves and expedite this process in the second special session.”

University of Alaska – Vetoed $130,253,100

This line item veto impacts primarily the Anchorage and Fairbanks universities. Funding for all of the community campuses, including University of Alaska Southeast, remains intact.

The reduced funding equates to approximately $11,000 UGF/student, which is about 44% higher than the national average.

Medicaid – Vetoed $50,000,000

The Department of Health and Social Services is working with nationally renowned consultants and the federal government to reform Alaska’s Medicaid program. These programs grew when the fiscal picture allowed growth. The current fiscal reality compels us to reduce the budget and work with federal counterparts to identify innovative reform options.

Cost saving measures can be achieved in the Medicaid program through creativity, program reform, and focusing on fraud.

Earnings Reserve Transfer to Corpus – Vetoed $5,579,800,000

This transfer jeopardizes the fund and the future of the Permanent Fund Dividend program. A transfer at a reduced level of $4 billion retains the legislatures intent to protect the earnings reserve from spending.

POMV Transfer – Vetoed $1,000,000,000

As enacted the POMV transfer provides significantly more revenue than is required for state services. This veto action avoids drawing too much money from the earnings reserve.

Senior Benefits – Vetoed $20,786,100 (FY2020) and $800,000 (FY2019 Supplemental)

This action eliminates the Senior Benefit Program

With the state facing the challenge of aligning current state revenues with state expenditures, this program is being eliminated to contain costs and reduce dependence of individuals on state funds.

School Bond Debt Reimbursement – Vetoed 50% reduction to reimbursements Total: $48,910,250

This action reduces School Debt Reimbursement by 50%.

New debt issuances are currently in moratorium and voters and boroughs are aware that this reimbursement is subject to appropriation.

The Anchorage School District will see the largest impact at $20,500,000 and the Mat-Su Borough School District will see the second largest impact at $9,200,000

Alaska Marine Highway System - Funded at the level passed by the legislature: $46,000,000 UGF

The Dunleavy administration has accepted the funding level passed by the legislature.

Funding will allow AMHS to provide some level of service to most communities during the fall/winter/spring of FY2020

Public Broadcasting – Vetoed $2,036,600 for Radio, $633,300 for TV, and $46,700 for the Commission

With access to grants, federal funding, or other innovative sources of funding, we believe the Alaska Public Broadcasting, Inc., will continue to provide services to Alaskans and will prioritize its services so it reaches the Alaskan communities that most need news and information

Village Public Safety Office Program – Vetoed $3,000,000 (FY2020)

The high point in the number of VPSOs employed occurred in FY 2012 when the number of VPSOs peaked at 100, but has since steadily declined each year

The Governor and Department remain committed to supporting this program and providing safety and security for the people of rural Alaska

(Attorney General Barr declared a law enforcement emergency in rural Alaska under the Emergency Federal Law Enforcement Assistance Program today providing over $10.5 million to support critical law enforcement needs of Alaska Native villages.)

Ocean Rangers – Vetoed $3,409,100

There are many permittees for air emissions and wastewater discharge across Alaska, but the cruise ships are the only permittees to have around-the-clock observation for compliance

After repeal of the Ocean Ranger program, permitting and compliance staff will still monitor cruise ships for compliance with state wastewater and air quality permits and regulations through records reviews, inspections in port, opacity monitoring, and vessel tracking

Education Funding – Vetoed the FY2021 “Forward Funding of Education”

Per the Attorney General’s recent opinion, this is an unconstitutional inclusion on behalf of the legislation and therefore not a valid appropriation

Positions Reductions – 62 Full Time, 2 Part Time, and 4 Non-Perm

Through a variety of veto actions, 68 state positions have been reduced, including vacant funded positions, totaling $11.9 million in reduced payroll costs across all fund sources.

Travel Reductions - $3,443,100 all funds

State agency travel budgets, not covered under the exemptions of public safety, health, and disaster management, were reduced 50% in the Governor’s FY2020 budget

Veto action removes legislative increases to state travel

Agencies will rely on technology and management efficiencies to reduce the amount of state employee travel.

According to a United Fishermen of Alaska news release, All the amendments that the legislature added back in Fish and Game were vetoed.  This includes: 

• $997,000 less for commercial fisheries management
• 50% reduction in funds for travel across all divisions (including Commercial Fisheries)
• $280,000 less for special areas management
• Transfer of two director-level positions and associated funding from the Division of Habitat and Division of Subsistence Research to the Office of Management and Budget. (these jobs will no longer be associated with Fish & Game related duties)

On the Web:

Downlod the Full List of the 182 Lines Veto Summary - Office of Management & Budget (PDF)

Source of News:

Office of Governor Michael Dunleavy
www.gov.alaska.gov

United Fishermen of Alaska
www.uaf-fish.org

Alaska House Minority (Republicans) - House Minority Leader Rep. Lance Pruitt
www.akleg.gov

Alaska House Majority - House Speaker Bryce Edgmon (I-Dillingham)
www.akleg.gov

Senate Democrats - Senate Democratic Leader Tom Begich (D-Anchorage)
www.akleg.gov

Senate Majority (Republicans) - Alaska Senate President Cathy Giessel (R-Anchorage)
www.akleg.gov

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