Former Alaska Office of Management and Budget Director Donna Arduin, left, and current director Neil Steininger presents portions of Gov. Mike Dunleavy’s proposed budgets at the start of his first and second terms in 2019 and 2023, respectively. The two represent vastly different approaches the governor has taken in interacting with legislators at the start of those two terms. (Photos: Michael Penn / Juneau Empire file and Mark Sabbatini / Juneau Empire)

A tale of two terms

Lawmakers say governor’s appointments, agenda vastly less confrontational this time.

(This story has been corrected to note Cathy Munoz’s appointment as acting commissioner of the Department of Labor Alaska and Workforce Development differs from the other people who are commissioner designees of other departments nominated by the governor and who are subject to legislative confirmation.)

Gov. Mike Dunleavy’s most controversial first-term appointee is again working at the Alaska State Capitol, but merely as a legislator’s aide as the governor is opting for what lawmakers in both parties call a more open-minded and less confrontational approach to his second-term appointments and agenda.

Four years ago Dunleavy’s chief of staff talked about mass firings and loyalty pledges, his administration commissioner resigned less than two months after allegedly lying during his confirmation hearing and his budget director imported from outside Alaska swooped in with massive cuts that generated sufficient outrage to trigger a recall effort of the governor.

But Dunleavy, perhaps aided by skyrocketing oil prices last year that helped make both a generous budget and Permanent Fund dividend possible, won reelection in November with an outright majority against two major contenders who split the dissenting vote. Since then, state legislators have largely praised his efforts to reach out even as they continue to disagree with many of his policy goals.

“I think the governor this term is different than his first term,” said state Senate President Gary Stevens, a Kodiak Republican, during a news conference on the opening day of this year’s session of the Alaska State Legislature.

“I believe it’s going to be a much easier working relationship. The governor has said he’s going to be in Juneau and he’s willing to meet with us when we want to meet with him.”

Dunleavy made an early impression on some legislators and observers during the days before this year’s session when he was seen visiting lawmakers and their staff as they moved into their offices at the Alaska State Capitol. His tone has also been more conciliatory for the most part when discussing policy such as his proposed budget, acknowledging for instance his flat funding of education is something likely to see adjustments during negotiations with a seeming majority of legislators in the Senate wanting to increase a formula that’s gone unchanged for many years.

“I’m glad he emphasized it’s a starting point budget,” state Sen. Jesse Kiehl, a Juneau Democrat, said when the budget was released in December. “That’s an indication of the version of Governor Dunleavy we’re going to work with.”

Dunleavy hasn’t abandoned some of his most steadfast positions, perhaps most notably the emphasis on maximizing the PFD, which Kiehl and others in the Senate majority say is at odds with increasing funding in areas such as education and the governor relying on reserve funds to cover a deficit. The governor also ended his State of the State speech with a long discourse about wanting to make Alaska “the most pro-life state in the entire country” that wasn’t in the prepared draft distributed to the media.

Achieving that legislatively or through a proposed constitutional amendment would be quite a feat considering the anti-abortion legislation in other states. But Dunleavy’s other current comments on the issue — acknowledging the bipartisan Senate majority he’s working with — suggest a less confrontational approach than during his initial years when he cut the Alaska Court System budget by $334,700 — the amount the government paid for what he called “elective” abortions. That action helped provide what recall activists said were legal grounds to remove him from office.

Many of the pieces of his second-term agenda continue to be a work in progress, from details of his much-touted plan to earn nearly $1 billion in carbon credits to the makeup of his cabinet, with the most recent change occurring Tuesday when he named former Juneau legislator and Assembly member Cathy Munoz as acting commissioner of the Alaska Department of Labor and Workforce Development.

Munoz, deputy commissioner of the department since Dunleavy became governor in 2018, will need to be confirmed by majority vote of the full Legislature if Dunleavy decided to nominate her as the new full-time commissioner. Six other people appointed as commissioner designees since the end of the last legislative session are awaiting such confirmation.

The process might not be entirely smooth, although only one nominee has been voted down since statehood (Wayne Anthony Ross, Sarah Palin’s pick for attorney general in 2009). Stevens said “there is a lot of concern” about one nominee in particular he declined to name, but discussions with the governor seemingly suggest he agrees it’s best to avoid a “food fight” during a floor vote.

“I believe the governor deserves to have the appointments he wants,” Stevens said. However, if there’s a nominee it appears legislators can’t stomach Stevens said his impression is the governor will be willing to nominate another person.

“We all look bad when there’s a fight on the floor,” Stevens said. “Things have been said on the floor that should have not been said in the past.”

Notable among potentially controversial nominees needing legislative confirmation is Brett Huber Sr., appointed chair of the Alaska Oil and Gas Conservation Commission, which oversees drilling activity in the state. He managed the governor’s successful 2018 campaign, helped managed the unsuccessful campaign against ranked choice voting in 2020, and rejoined the governor’s staff in 2021 as a “statehood defense” adviser until last spring. He has since become a primary target in a still-pending complaint by two watchdog groups alleging improper coordination between Dunleavy’s 2022 campaign and a PAC supporting the campaign.

Officials with the Dunleavy campaign and other named defendants deny any improper coordination took place.

When it comes to other appointees by Dunleavy, the following are among the more notable differences between the start of Dunleavy’s first term and his second:

Budget director: Donna Arduin (then) vs. Neil Steininger (now)

Donna Arduin arrived as a nationally prominent slash-and-burn budget cutter for leaders in various states including Michigan, New York, Florida, Illinois and California. She embraced being the lightening rod for a first-year Dunleavy budget that cut two-thirds from the ferry system (making what lawmakers called an absurd cost efficiency comparison to road systems), 40% from the University of Alaska and 90% for homeless services. Dunleavy’s politics were as confrontational as his pocketbook, conducting a series of public hearings that were sponsored and paid for by the Koch-brothers organization Americans for Prosperity. Attendees required to register with the group, and abide by rules such as bans on signs and recording the hearings.

“His first budget was devastating,” Stevens said during the first day of this year’s session. Legislators during that first budget year described the budget process using words like “warfare.”

Arduin’s tumultuous tenure ended when she stepped down in September of 2019, with Dunleavy appointing Neil Steininger as his new budget director in January of 2020. Steininger, who had five years of previous budget experience with the state, remains in that position and interactions with legislators have grown more cooperative, even though plenty of items in the governor’s budgets have remained controversial.

“At least he (Steininger) has some familiarity with state government,” Tom Begich, a Democratic Anchorage state Senator at the time, said following the budget director’s appointment. “He’s not Donna Arduin, which is another plus.”

Arduin, meanwhile, is back at the Alaska State Capitol working for Rep. Ben Carpenter, a Nikiski Republican who during his four years in office has been involved in numerous controversies including attempts to overturn the 2020 presidential election and comparing COVID-19 public health measures to Nazi Germany. He also chairs the House Ways And Means Committee, where Arduin’s experience is relevant. Carpenter and Arduin did not reply to a request for comment Tuesday.

Chief of staff: Tuckerman Babcock (then) vs. Tyson Gallagher (now)

The chief of staff doesn’t require legislative confirmation, but Dunleavy’s first person in that role was determined to conduct a confirmation process of his own. A week after the election, Tuckerman Babcock, a longtime powerbroker in state Republican politics, sent letters to about 800 non-unionized employees demanding their resignations. The request far exceeded previous traditional requests to high-level political appointees, and the price to return for those contacted by Babcock was a loyalty pledge to Dunleavy.

A federal judge ruled in 2021 the resulting firing of employees who didn’t resign was unconstitutional. Babcock stepped down as chief of staff in July 2020 to become senior policy adviser for strategic affairs, and staged an unsuccessful campaign for state Senate last fall.

Gallagher became acting chief of staff in July of 2022 when Randy Ruaro departed, citing health and family reasons, then was permanently appointed in November. Gallagher’s only whiff of public controversy during that stint is a single and essentially incidental reference to him in the ongoing campaign-related complaint against Dunleavy and some of his campaign apparatus.

Department of Natural Resources: Corri Feige (then) vs. John Boyle (now)

This is an outlier in the governor’s second-term Cabinet, as an experienced state official serving throughout his first term is being replaced by a former oil lobbyist with no state government experience.

Corri Feige, who served as director of Alaska’s Division of Oil and Gas under Dunleavy’s predecessor Bill Walker, was involved in key resource issues for Dunleavy such the state’s approval of BP selling the Prudhoe Bay oil field to Hilcorp in 2022. She resigned in June of 2022 due to “recent developments” she declined to specify.

John Boyle was named the department’s new commissioner in December, following an interim period with a different leader. He worked for the North Slope and Utqiagvik borough governments before becoming director of government affairs for BP between 2016 to 2019 and then working in a similar role for the smaller company Oil Search.

His work as a lobbyist, including litigation the state was involved with, prompting a spokesperson for Dunleavy to tell the Alaska Beacon that Boyle will be able to serve without undue deference toward the oil industry because of standards set by the executive ethics act.

“Mr. Boyle has professional skills and a proven record in resource development policy in multiple roles over many years in Alaska,” Jeff Turner, the governor’s spokesperson, told the Beacon. “It also includes his time as a public servant for the North Slope Borough, one of the most resource development intensive areas in the United States.”

Department of Revenue: Bruce Tangeman (then) vs. Adam Crum (now)

Before Dunleavy took office Adam Crum was an executive in his family’s vocational training business and an unsuccessful Republican state Senate candidate in 2016. The new governor appointed Crum commissioner of the then-Alaska Department of Health and Social Services — the state’s largest department until it was split in two last year and the one primarily tasked with coping with the public health crisis of the COVID-19 pandemic.

“The governor’s major success his first four years was COVID,” Stevens said, referring to Dunleavy’s management of the health and other impacts.

Now Crum is the designated head of the Department of Revenue, another agency of first-tier importance as the state continues grappling with the intractable struggle to come up with a sustainable long-range fiscal plan. His appointment came after Deven Mitchell, named acting commissioner last September, was selected a month later as the executive director of the Alaska Permanent Fund Corp.

The story during Dunleavy’s first term was considerably shorter for initial Department of Revenue Commissioner Bruce Tangeman, who resigned after less than a year due to what he called differences with the governor about budget policy, while still expressing his support for Dunleavy. In particular, Tangeman, cited an opposition toward new taxes the political discussion seemed to be turning toward as well as strongly defending the drastic spending cuts that were causing the outcry against Dunleavy.

Needing no apparent corrections

A nominee who seems unlikely to face major opposition despite an association with Dunleavy’s first-term struggles is Jen Winkelman, the current acting commissioner for the Department of Corrections. The department is going through a markedly turbulent period for reasons such as a decade-high 18 inmate deaths last year, all but one while Winkelman was deputy commissioner, but Kiehl is among the legislators supporting her as a longtime Juneau resident who’s worked for the department since 2001.

“She has her head screwed on straight,” Kiehl said during a local town hall meeting in December. “She understands both of the missions of the Department of Corrections to keep dangerous people behind bars so Alaskans are protected from them and to monitor their reentry into society. I think with her we have a real opportunity to make some progress.”

Dunleavy’s first corrections commissioner, Nancy Dahlstrom, resigned last year to run as his lieutenant governor nominee.

Munoz is another longtime Juneau resident whose confirmation as a commissioner of the labor department seems likely. As with corrections, workforce issues have surfaced as a major issue in recent years with both government and private employers experiencing critical shortages of employees in often essential services such as health care. Her predecessor, Tamika Ledbetter, served throughout Dunleavy’s first term without generating any of the controversial headlines of some her fellow commissioners.

Also likely to find herself in controversial hearings without necessarily being the subject of controversy herself is Heidi Teshner, acting commissioner of the Department of Education and Early Development. She has been with the department since 2003, but school funding is among the top issues of the legislative session and the state’s standardized test scores are among the lowest in the U.S.

The same applied to Heidi Hedberg as the acting commissioner of the Department of Health. She has has been the director of the Division of Public Health since 2019, but her initial hearings during this year’s session have focused largely on the months-long backlogs in food stamps and Medicaid that have plagued the Division of Public Assistance.

• Contact reporter Mark Sabbatini at mark.sabbatini@juneauempire.com

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