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Governor Signs FY23 State Budget Investments in public safety, education, rural Alaska and infrastructure while saving $1.6 billion


June 30, 2022

(SitNews) - Today, Alaska Governor Mike Dunleavy signed the FY23 state operating and capital budgets into law. The spending plan moves Alaska into a new direction with prudent and fiscally responsible investments in public safety, public education, the University of Alaska, and infrastructure projects that create jobs and economic development. It accomplishes all that while saving $1.6 billion dollars of the budget surplus to shield the economy when oil prices eventually decline. In addition, the budget includes a historical 2022 Permanent Fund Dividend for every eligible Alaskan.

“This budget is more than a spending plan; it’s a blueprint for Alaska’s future,” said Governor Mike Dunleavy. “Budgets should reflect the values and ambitions of the people they are designed for, and I believe this legislation accomplishes that. It strikes the right balance by continuing my administration’s commitment to rebuilding state services like public safety while holding spending in check, adding to our savings, and pointing the economy in the right direction.”

Governor Mike Dunleavy announced his Fiscal Year 2023 budget vetoes on Tuesday. Major accepted budget items include full funding of public education, one-time $57 million Base Student Allocation increase, $2.5 million in additional pre-Kindergarten grants for a total of $5.7 million, and full funding of School Bond Debt Reimbursement and the REAA fund back to 2017.

The governor held a press conference Tuessday joined by members of his cabinet, and public policy leaders from across Alaska to discuss the FY23 state operating and capital budgets. (Click here to watch Tuesday's press conference.) Today the governor signed the budget.

Vetoed projects and services that were priorities of the Alaska Senate Democrats include portions of the Alaska Long Trail, public broadcasting, $27 million in deferred maintenance for the University of Alaska, and Sealaska Heritage Institute’s workforce development program. Senator Tom Begich (D-Anchorage) issued a statement in response to the Governor's announcement.

Begich said, “Working with 61 other lawmakers to craft a reasonable budget for the state is no easy task. The process the legislature took at the beginning of the year was one of inclusion with robust discussions. In the end, this budget included a significant number of the priorities of the Senate Democrats and Alaskans."

“After Governor Dunleavy’s vetoes today [Tuesday], I am happy about the retention of forward-funding for public education, full funding of school bond debt reimbursement and the REAA fund, $3,200 Permanent Fund Dividend to help Alaskans with high energy costs, expansion of food bank infrastructure, and long-needed teacher public health and public safety housing in rural Alaska. These were critical components of the budget," said Begich in his statement.

Begich said, “It is unfortunate that not all priorities were funded. Projects like fully funding the Alaska Long Trail and services like public broadcasting did not survive the Governor’s red pen. These are widely popular projects and services that Alaskans have come to rely on."

“No one gets everything they want in a budgeting process, but the negotiation process was fair. I want to thank the Governor, legislative leadership, and the co-chairs of the Finance committees for including me and the caucus in this process. Alaska can move forward with this budget," said Begich.

“As Alaskans, we all know the surge in oil revenue is temporary. What it buys us is time to continue working together on a fiscal plan that smooths out the inherent volatility in oil revenue. The result will be that Alaskan families will not experience diminished services when revenues are down, and the business community is assured that Alaska’s fiscal house is in order. The first step in that legislative and public policy process is to end the arbitrary political process for funding the PFD that was used starting in 2016 to this year when lawmakers turned to the 50/50 formula. However, a permanent, sustainable solution requires giving the people of Alaska a chance to vote on any change in the formula to be protected in the Constitution. I look forward to working with lawmakers and Alaskans on a long-term, sustainable fiscal plan,” added Governor Dunleavy. 

The Dunleavy Administration’s fourth state budget invests in the following:

Protecting all Alaskans – Public Safety, People First Initiative, Missing and Murdered Indigenous Persons

Protecting Alaskans has been Governor Dunleavy’s number one public policy priority since taking office in December 2018. His public safety budget reflects his unwavering commitment to keeping all Alaskans safe from crime.

  • The budget authorizes 10 new Alaska State and Wildlife Troopers and 10 Village Public Safety Officer positions
  • Higher salaries for VPSOs and Troopers to attract the most qualified and motivated candidates to a career in law enforcement
  • New housing for public safety officers in rural communities
  • Additional funding to hire more criminal prosecutors and support staff
  • Creates an innovative Crisis Stabilization Center test program to treat Alaskans experiencing a mental health crisis

Public Education – Accountability

The FY23 budget not only increases funding for Alaska’s public school and university systems; it also brings long-overdue accountability for students’ and parents’ sake.

  • $117 million investment in education, including funds dedicated to the Alaska Reads Act, a comprehensive reading intervention program so all students can read at grade level by the end of third grade. Increased resources include $57 million in one-time funds to schools, $2.5 million for Pre-K and an increase to the BSA.
  • The Alaska Reads Act will be culturally responsive to rural and Alaska Native students
  • Forward funds K-12 education in FY24 with $1.2 billion
  • Delivers tax relief for local taxpayers by funding school bond debt reimbursement
  • Enhancements to Alaska’s student loan program
  • Innovative research in drone technology, critical minerals, heavy oil, and mariculture at the University of Alaska

Investing in Alaska: Ports, Bridges, Airports and More – FY23 Capital Budget

  • Funds critical repairs to the Port of Alaska
  • Invests in a new deep-water port in Nome – a strategic Arctic port for the United States
  • Upgrades and improvements for multiple airports across the state
  • Funds repairs for roads and bridges statewide

·        $117.3 million in state and federal funds for the Village Safe Water program, so more rural communities have safe, clean drinking water and sanitation

  • Sets state on course to pay off oil tax credits once and for all by this year. This honors the state’s commitment to pay off debt abandoned by a previous administration
  • Invests in the Alaska Marine Highway System with a new mainline vessel and maintenance funds to keep ships on the water serving coastal communities

Fiscal Responsibility – Savings, Endowments and Line-Item Vetoes

Quoting a news release, Governor Dunleavy carefully examined the increased spending made by lawmakers this year. His objective was to preserve the temporary surplus from higher oil revenues to the greatest extent possible. Reductions were made without harming essential state services. The line-item vetoes total $400 million, and those unspent funds will be deposited into the Constitutional Budget Reserve (CBR), a rainy-day savings account for years when state revenues are down.

  • All state agency budgets other than public safety and education are down ten percent from 2019
  • The FY23 budget deposits $1.6 billion in the CBR
  • The bottom line: Alaska’s CBR account balance increases from $1.3 billion to approximately $3 billion – enough to cover the state budget if oil prices collapse

Alaskans Accessing Alaska – Agriculture and Mariculture

  • Funds the development of a mariculture industry in Alaska
  • Increases food security with the Nenana-Tokchaket Agriculture Project to produce more food, fuel, and fiber for in-state consumption

Rural Alaska

The FY23 budget addresses many long-standing issues with infrastructure, public safety, and technology in rural communities.

  • Broadband technology – an integral part of today’s world

    • Up to $1 billion anticipated for Alaska to connect all Alaskans with at least 100/20 mbps internet service
    • $3 billion for the Tribal broadband program
    • Establishes a new State of Alaska Broadband office scheduled to open July 1, 2022

  • Replaces the K-12 public school in Napakiak threatened by erosion
  • Fully funds the Power Cost Equalization program for the fourth straight year
  • Fixes a technical problem in the state’s school funding formula so the Hooper Bay School receives it fair share of education funding
  • Funds plowing of ice roads in rural communities off the road system
  • As stated before, funding for new Troopers and VPSOs in rural communities, housing for public safety personnel, the Village Safe Water program, a deep-water port in Nome and upgrades to rural airports

2022 Permanent Fund Dividend

  • The PFD is, and will always be, Alaskans’ rightful share of the state’s enormous mineral wealth.
  • 2022 marks the return of substantial PFD payments to all eligible Alaskans and this year’s payment will be the largest in state history. It couldn’t come at a more critical time.
  • Based on Governor Dunleavy’s 50/50 PFD plan, it divides the annual draw from the Permanent Fund equally between state services and the dividend
  • Families need help now with rampant inflation, record-high fuel costs, and the economic damage caused by the pandemic
  • Governor Dunleavy will announce the distribution plan for the PFD soon

On the Web:

Office of Management and Budget

 FY23 budget documents

Veto Summary:

Office of Management and Budget HB281 HB282 Veto Summary

Edited By: Mary Kauffman, SitNews

Source of News:

Office of Governor Michael Dunleavy

Alaska Senate Democrats


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