By Canadian Press

Alaska governor slashes university budget by $130 million

Jun 28, 2019 | 4:27 PM

JUNEAU, Alaska — 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.

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“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.

Becky Bohrer, The Associated Press