Dunleavy signs budget with $400 million in vetoes that critics say are telling

Gov. Mike Dunleavy before his news conference on the budget began on June 28, 2022.

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In an event that was very much designed to show just how far his administration has come from the days of draconian cuts that fueled the Summer of Recall Dunleavy, Gov. Mike Dunleavy today announced he has signed the state’s budget that clocks in at the sixth largest in state history with something for just about everyone.

Flanked by officials from the University of Alaska and the Alaska Federation of Natives—two groups that were frequently on the receiving end of Dunleavy’s veto pen and ire in the early days of his administration—the governor touted a swell of capital project spending, a big PFD, boosts to funding for the University of Alaska, a one-time boost to K-12 education, various public safety initiatives and other spending he called a transfer of the state’s windfall wealth, while downplaying about $400 million in vetoes that cut the amount of money going to schools, roads and the University of Alaska.

“Really what this budget does is it adds certainty in an otherwise uncertain world we are in right now. Whether it’s inflation, whether folks are looking at a war overseas, whether it’s labor issues, a lot of folks are wondering what the future is going to look like. That all went into this budget, we wanted to make sure we can transfer money to folks and municipalities through bond debt reimbursement,” he said. “I think this is a budget that helps Alaskans now, it’s a budget that helps Alaskans this coming year and I think this is a budget that will help Alaskans for years to come.”

[More: Find the governor’s budget documents here]

The event included short speeches from AFN President Julie Kitka, who commended the governor for working to mend the working relationship between the state and tribes, as well as members from the University of Alaska’s Board of Regents, who praised the governor for the additional funding despite also delivering a $27 million veto to the university system’s deferred maintenance budget.

Some of the big highlights that would’ve likely been a target of the governor’s veto pen in recent years but survived in this year’s budget are a $57 million one-time boost to K-12 education, $342 million to partially refill the state’s Higher Education Investment Fund (the endowment that pays for university scholarships that was liquidated by Dunleavy’s expanded reading of the constitutional budget reserve sweep, which spawned its own lawsuit and subsequent legislation) and about $300 million for school bond debt reimbursement for local municipalities (funding that had either been cut or reduced in recent years, shifting the costs to local governments).

Of course, it also includes a $3,200 payout split between the dividend and the energy relief check. While Dunleavy seemed to signal interest in getting it out quickly as he had done last year, he declined to commit to any such early payment this year. When asked, he initially ignored the question but eventually said he’d make a decision “next week” when asked again.

More interestingly, though, is just what the governor cut with about $400 million in vetoes issued this year. (The raw number is closer to $760 million but that figure includes a veto of $360,000 million of a proposed transfer between savings accounts, which doesn’t affect day-to-day government operations.) As Joe Biden was apparently saying back on the campaign trail in 2007: “As my Dad used to say, ‘Do not tell me what you value. Show me your budget and I will tell you what you value.’”

The vetoes include:

  • $62.5 million to school major maintenance projects
  • $22.5 million for major maintenance projects statewide
  • $27 million for deferred maintenance at the University of Alaska
  • $27 million in unallocated cuts that’ll be decided by state budgeters
  • $10.5 million spread out over several projects for the Alaska Long Trail project
  • $6.1 million in repairs for Mt. Edgecumbe High School
  • $6 million for traffic improvements at the dreaded Muldoon curve in East Anchorage (specifically a light at Tudor and Patterson Street)
  • $5 million grant for the Alaska Seafood Marketing Institute
  • $4.3 million for the Food Bank of Alaska’s produce program
  • $4 million for the state’s child care program
  • $2.95 million to the Alaska Primary Care Association for workforce training
  • $2.6 million for workforce development
  • $1.5 million for public broadcasting radio grants
  • $1.5 million in grants for senior and disabilities services
  • $1.3 million for Muldoon Library in East Anchorage (which was federal money)
  • $500,000 for United Way of Anchorage’s hunger relief program
  • $340,000 for Sealaska Heritage Institute’s workforce program
  • $300,000 for the Alaska Black Caucus’ equity center construction
  • $284,000 for two drug-sniffing dogs for the Department of Corrections

The governor also vetoed several items in the budget aimed at recruitment and retention of employees working in the criminal justice realm. He said most would be covered by separate legislation passed by the Legislature, saying the funding in the budget was duplicative.

To opponents, the vetoes targeting of funding for schools, the University of Alaska, child care, workforce development and seniors was evidence that not everything has changed over the last four years.

The campaign of independent candidate Bill Walker released a statement pointing out that Dunleavy’s vetoes fall on education, the courts and spending to support seniors and people with disabilities while noting that the budget line for the governor’s office has grown 28% while Dunleavy was in office, from $28.3 million to $36.3 million.

“Candidate Dunleavy ran on a false promise of paying a $6,700 PFD without causing any pain or harm to our economy. That check bounced once again this year, as Governor Dunleavy continues to come up short on the core promises he made to get elected,” Walker said in a prepared statement. “Worse still, at the same time he was slashing funds for schools, grants to support elders and people with disabilities, and our university system, he was giving friends pay raises, signing contracts with supporters, and ballooning his own office budget by 28 percent.”

Democratic candidate Les Gara also panned the budget in a series of tweets:

“The bigger story on #Akgov’s vetoes is that next year we go back to ‘non-election year Dunleavy.’ Without Russian blood money next year, he’ll be back to a job-killing construction budget that keeps people out of work, $1/4 billion in school cuts, and no future,” Gara wrote. “Until this year he averaged a PFD of $1230 a year. His PFD promise has been false all along. He’s never proposed a way to fund it without war money other than a $3 billion raid on the Permanent Fund. In 2015, he voted to uphold Gov. Walker’s veto of the PFD, which I opposed knowing it would just create a fight that’s lasted 8 years. His austerity construction budget is 75% lower than in 2014. Killing renewable energy, construction, road, harbor & other needed projects & killing jobs. That’s why 20,000 more people have left Alaska than moved here since 2019.”

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