With next year’s budget due soon, Dunleavy’s still retreating from this year’s vetoes

Protestors stand outside the Wasilla Middle School on the first day of the special session called by Gov. Michael J. Dunleavy on July 8, 2019. (Photo by Matt Buxton/TMS)

Gov. Mike Dunleavy continues to backtrack from the vetoes he used to slash state spending even as he prepares his draft proposal of next year’s budget, which is due out by Sunday.

In the latest news, delivered late Monday night, the Dunleavy administration is backing away from scheduled changes to a social safety net program that provides financial assistance to disabled and elderly Alaskans. The program’s 19,383 recipients had been scheduled to see about 10 percent of their cash benefits disappear on Jan. 1.

The was recently brought to light by columnist Dermot Cole, who criticized the administration’s apparent attempts to bury the news in a document “that means nothing to those who aren’t fluent in mumbo jumbo.”

The official line from the administration is that the cuts would lower benefits to an “unacceptable amount” because of a combination of the cuts themselves—about $7.5 million delivered by veto—and a formula change ordered by the federal Centers for Medicare and Medicaid Services.

The state had been apparently using the incorrect formula to determine the benefits, but the backtracking doesn’t mean that beneficiaries of the program will go unscathed come the new year. According to a DHSS statement published in the Anchorage Daily News, some people could still see their benefits reduced but that determination will “need to be recalculated on a case-by-case basis.”

The administration claims that it was blindsided by the changes, but it’s not cooling concerns raised by legislators. Rep. Ivy Spohnholz, the Anchorage Democrat who co-chairs the Health and Social Services Committee, told the ADN that the governor has a responsibility to know the effects of his actions.

“He either knew what he was doing and went ahead anyway, which was malicious,” she said. “Or he was incompetent, in which case he shouldn’t be in the job.”

She said details of the change should have been raised far ahead of time. Instead, many recipients received a letter alerting them of the impending rate changes while omitting any mention of the veto.

Why it matters

The $7.5 million affected by the administration’s misstep is relatively small, but it stands as just one of many actions in this year’s budget that is playing out in apparently unexpected ways.

It’s also just one more bit of the budget that legislators will have to grapple with in the spring, when considering a supplemental budget to true up revenues and expenditures for the current year.

The big-ticket item, of course, is the governor’s veto of Medicaid, ballooning the Legislature’s $72 million cut to $160 million. Legislators and others warned that the scope of the governor’s proposed cuts weren’t going to be achievable in a single year, but the governor pushed ahead with the cuts and added them to the $390 million in cuts made to the budget.

The Medicaid spending will be added to higher-than-expected firefighting expenses as well as several others, which is expected to erase more than half of the cuts made to this year’s budget.

In the grand scheme of things, none of this instills all that much confidence for the budget process ahead won’t be free of the errors in this year’s budget. Key positions in the administration—budget director, Revenue commissioner and press secretary—are either vacant or are filled with temporary hires.

The budget is due out on Sunday at the latest under state law but is expected out this week.

Though the governor has pledged greater communication with Alaskans, just what he’s planning on doing with the budget is largely a mystery.

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