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Dunleavy defends vetoes as forcing budget conversation

July 26, 2019

JUNEAU, Alaska (AP) — Gov. Mike Dunleavy said his administration is working with the University of Alaska on a plan to help soften the blow of budget cuts, but a system spokeswoman said the prospect of securing a “reasonable” budget from the state seems distant.

In a call with reporters Thursday, Dunleavy didn’t get into the specifics of what’s being discussed but said his budget office would do so with the Board of Regents.

Dunleavy spokesman Matt Shuckerow later said staffers from the university system and governor’s office are working on a transition plan, timeline and possible inclusion of funds that may be needed to implement changes.

Roberta Graham, a university system spokeswoman, said by email that Dunleavy’s budget office has put forth a spreadsheet of suggested cuts over the next two years, but “those suggestions still call for deep cuts to the university, and it’s clear we are a long way from securing a reasonable budget from the state. We will continue actively working with the governor’s office and legislative leaders on a positive outcome.”

Dunleavy vetoed $130 million from the university system budget on top of a $5-million cut lawmakers approved. The system president called the overall reduction devastating.

The veto prompted a vote by the regents that would allow administrators to expedite layoffs of tenured faculty, end programs and take other measures to cut expenses.

The House passed a bill Wednesday seeking to reverse many of Dunleavy’s vetoes that would restore $110 million of the university cut. House Speaker Bryce Edgmon said there appears to be “a general acknowledgment in the Legislature that some, if not the larger portion of the vetoes, need to be restored.”

Dunleavy said he’ll wait to see what the Senate does. He said he is listening to Alaska residents and will look at how the vetoes can help in “right-sizing” government.

The Legislature earlier this month failed to win sufficient support to override Dunleavy’s vetoes, a vote that came with lawmakers in different locations amid a dispute over the proper meeting site for the current special session, the second of the year.

Dunleavy, a Republican who took office in December, credits his vetoes with forcing a conversation about the path Alaska should take to address its ongoing deficit.

“Are we going to reduce the budget to close the gap or are we going to take the PFD and tax ourselves or possibly a combination of?” he said, referencing the Alaska Permanent Fund dividend, the annual check residents receive from earnings of the state’s oil-wealth fund. “We won’t get there if I continue to try to kick the can down the road by using our savings and acting as if everything is OK. We’ve got to fix this now; we’ve got to fix this on my watch.”

Debate over this year’s permanent fund payout and the future of the program has overshadowed lawmakers’ work all year and been a sticking point as they struggle to resolve remaining budget issues.

Dunleavy has pushed for a dividend of about $3,000, paid according to a calculation that hasn’t been followed the past three years and that critics say is unsustainable. The issue in recent days has repeatedly been debated in the House, with members of the bipartisan House majority rejecting such a payout. The latest proposal before the House calls for a dividend this year of about $1,600, assuming use of funds from the statutory budget reserve to round out that amount.

Rep. DeLena Johnson, a minority Republican, said her caucus wants the dividend law followed. If some want to change the calculation, “then let’s have that conversation,” she said.

Lawmakers are worn out, she said: “We’re not plowing any new ground here, I wish we were.”

Edgmon said an idea that’s been floated is perhaps approving a $1,600 dividend now and in the fall holding a special session where a $1,400 check would be contingent on passage of a change in the dividend law.

“The governor seems, at this point, unwilling to accommodate that request,” he said, adding that lawmakers have told Dunleavy the votes aren’t there to pay a full dividend outright and come back later to try to change the law.

Lawmakers last year began using permanent fund earnings to help pay for government expenses amid an ongoing deficit and sought to limit what can be withdrawn for dividends and government.

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