Gov. Michael J. Dunleavy and his administration have been extremely tight-lipped about just what’s in store for his budget that’s set to be released on Wednesday at 10:30 a.m., but select outlets got a preview of the budget over the weekend and there’s still, well, way more questions than answers.
We now do know that Dunleavy’s “matching expenditures to revenues while also paying out a $3,000 dividend” budget will, indeed, rely almost entirely on budget cuts that will affect funding for K-12 schools, the University of Alaska and the state’s health care plan.
“I will say there’ll be less funding for K-12 education,” Dunleavy told the Fairbanks Daily News-Miner after what appears to be plenty of badgering for any specifics on the budget.
Dunleavy, of course, declined to put any numbers to his planned cuts to K-12 education funding and whether they would touch the base student allocation funding formula. The News-Miner was also able to extricate an admission from Dunleavy that his plan will include some sort of cut to the University of Alaska system. Again, no numbers.
He was also cagey about his plans for Medicaid expansion (which costs the state about $30 million in return for about $400 million in federal funds to cover about 44,000 low-income Alaskans), but it will almost certainly be under the knife. Here’s what he told the News-Miner:
“I know that will be a discussion that will take place on Feb. 13 as well. … Will we have health and social services programs administering Medicaid? We will,” he said. “With regard to the expansion, how big and how we continue it, that’s going to be up for debate.”
Dunleavy is firm, according to his interview with the Anchorage Daily News, that he will not entertain any changes to taxes whether it’s implementing a broad-based tax or repealing $1 billion to $1.2 billion in per barrel oil tax credits. He’s also insistent on paying out a $3,000 dividend, which will have a total cost of $1.9 billion (up from the $1 billion proposed under Gov. Bill Walker’s budget).
The economic impact of such monumental cuts will be massive, UA Institute of Social and Economic Research economist Mouhcine Guettabi explains. Noting that a $1 billion cut would result in some 8,100 lost jobs. The ADN extrapolates from this, giving us nearly 13,000 jobs lost under the $1.6 billion of cuts.
The ADN also points out that at a $400 dividend there is no deficit, but Dunleavy’s keen on putting downward pressure on the budget.
“Yes, there is no deficit, but I would caution you. Those two lines between expenditures and revenue will intersect for one moment in time given Alaska’s history,” he told the outlet. “That data line intersects for one moment, and then there’s a gap that grows again and it won’t be just the $400 dividend. It’ll be a zeroed-out-dollar dividend and then it’ll be an income tax and it’ll be a sales tax. You just have to look at the history of Alaska and look at Illinois. Look at New York. Look at California. Look at some of those states. ‘You never can have enough money for government’ is the philosophy that I want to avoid.”
But Dunleavy also asks in his KTVA interview, really, is any of this really a cut? Yes, the answer is yes, but here’s his reasoning:
“What we’re doing with this administration is, we are not cutting,” Dunleavy said. “We are building a budget from the bottom up, from zero up. We’re going to build that up to where we reach our revenues.”
This all comes at the time when the Dunleavy administration is finding new partnerships with private prison companies to run the state’s psychiatric hospital and pushing a criminal justice reform rollback that would grow the prison budget by an estimated $41 million by putting more people behind bars for longer. Dunleavy told KTVA he wasn’t particularly concerned about growth on that end.
“You’ll probably see budgets related to public safety grow not just this year but next year,” Dunleavy said. “But we are also going to get better at public safety. Nonetheless, you’ll see more money going to public safety to protect Alaskans.”
So there you have it. Less money for schools. Less money for the university. Less money for social safety net programs like Medicaid. More money for prisons. More money for dividends.
We’ll see the rest on Wednesday at 10:30 a.m.