Summary: Gov. Mike Dunleavy unveiled a line-item vetoes that cut $409 million from the Legislature’s budget. Dunleavy said he wants further cuts next year as the pursuit of a “balanced budget” will be a two year process.
“This is a difficult situation, but I believe everyone realizes something has to be done,” Dunleavy said.
Juneau’s representative’s and senator shared their thoughts on the governor’s vetoes. All three Democratic legislators were not fans.
Rep. Sara Hannan:“I think it’s a worst case scenario. I think the governor in many of the vetoes went back to where his budget was in February. I have some deep concerns, and I anticipate when we meet in special session we will have many conversations about veto overrides.”
I do not support the Governor's irresponsible vetoes that could send our economy into deeper recession. Cuts to education, senior benefits, school bond debt reimbursement, coupled with the elimination of many programs, including Ocean Rangers, cause harm to Alaska. #akleg— Rep. Sara Hannan (@RepSaraHannan) June 28, 2019
Rep. Andi Story: “I want to work with the governor to do what is best for Alaska, but from what I see, these vetoes will continue to damage our economy, lead to further job losses, and harm our most vulnerable citizens. The governor makes fundamental assumption that is wrong: that gutting government will build and attract the private sector… When businesses are looking to invest in a place or locate families, they are looking for public safety, excellent schools, good transportation, a robust university system and reasonable taxation.”
Sen. Jesse Kiehl: “Governor Dunleavy demands a false choice between smaller Permanent Fund Dividends and crashing Alaska’s future. The governor’s vetoes today would crash Alaska’s economy and trash our future. Now it’s up to the legislature to protect our state—for this generation and the next.”
This might save some Alaskans some Googling.
Here’s how an override works, according to the legislative process.
“If the Legislature is in session, both houses may agree on a time to meet in joint session to override or sustain the veto. The houses sit in joint session as a unicameral body and it requires two- thirds (three-fourths if an appropriation bill or a bill to raise revenue) of the membership of the combined houses to override the veto and have the bill become law. If the Legislature has adjourned, the vetoed bill must be taken up within five days after the convening of the Legislature in its second regular session or any special session.
If the Governor vetoes a bill after the adjournment of a second regular session of a Legislature, the veto will not be addressed unless a special session is called before the next Legislature convenes.”
Johnsen said before the extent of the governor’s veto was announced, he was going to ask the board to consider a 5-percent tuition increase for next year.
“We may need to expedite this,” Johnsen said. “That’s definitely still on the table.”
Senate President Cathy Giessel, R-Anchorage, released a statement on the governor’s vetoes.
It wasn’t a glowing endorsement or a firebrand denouncement, but it did say the vetoed budget items will be further considered.
“Over the past several years, the Senate has focused on reducing government spending,” Giessel said in the release. “In making those reductions, we understand the importance of being careful to protect both the state’s economy and core services Alaskans count on, mandated by the Alaska Constitution. Protecting the Permanent Fund and prioritizing essential services were among the guiding principles of this Senate. It is those principles that will continue to guide us as we consider each of the vetoed budget items in the coming days.”
More info from the Johnsen’s press conference:
The veto does not directly reduce funding to University of Alaska Southeast and other community campuses.
However, Johnsen said the veto would have a system-wide impact.
“I can’t sugar coat this,” Johnsen said.
He said preliminary estimates indicate there would need to be a reduction of 1,300 faculty and staff if the veto goes through.
Johnsen said at this point, all options are being considered to address the reduction in funding if the veto is not overturned.
“Everything is on the table, 41 percent of our state funding was vetoed today, campuses, academic programs it must be on the table,” Johnsen said.
While the veto is close to the amount included in Dunleavy’s initial budget proposal, Johnsen said a 41-percent cut cannot be planned planned for rationally.
“If the veto is upheld, we will not have the time to do a deep analysis,” Johnsen said.
Johnsen said he did not have a message for Dunleavy at this time but said University of Alaska is not all things to all people.
“There are many degree plans that we don’t provide,” Johnsen said. “There are programs that are only available at one of our universities.
He also spoke to the importance of higher education in general.
“If we’re going to build a state that we can be proud of we have to build a university we can be proud of,” Johnsen said.
University of Alaska President Jim Johnsen is holding a press conference to discuss the budget changes.
Johnsen said he thinks all of Alaska heard the governor’s decision to reduce the reduce the university’s funding by more than $130 million, which is a 41 percent cut.
Effective immediately, Johnsen said there will be a hiring freeze, a travel freeze and all staff are getting a 60-day notice of furlough.
He said there will be efforts to work with the Legislature toward overriding the veto.
If an override does not happen, Johnsen said the university will have to declare financial exigency, which could happen at the July 15 Board of Regents meeting. That would allow the university to make quick financial decisions.
“It’s very rarely used by public universities, but given a number this big and a need to capture those savings as quickly as we need to there probably isn’t other options,” Johnsen said.
The House Majority has weighed in on the line-item vetoes.
“The Legislature presented Governor Dunleavy with a responsible operating budget that struck a balance between protecting essential services and making tough but necessary budget cuts,” said House Speaker Bryce Edgmon, I-Dillingham, in a press release. “Today, the governor made major vetoes that will have drastic, negative impacts on all Alaskans.”
Alaska State Hospital and Nursing Home Association are among those criticizing the announced vetoes.
“We are deeply disappointed, but not surprised, that the governor chose to continue down a path of unsustainable budget reductions,” said Becky Hultberg, ASHNHA president and CEO, in a press release. “These cuts are on top of over $70 million in cuts already accepted by the legislature. The governor’s own department has been unable to identify how to implement cuts of this magnitude, which calls into question the Department of Health & Social Services’ ability to reduce costs without gutting the Medicaid program. Alaskans deserve a more complete explanation of these reductions. Since the Medicaid program is statutory, benefits must be provided. Further cuts will simply result in the need for supplemental funding next year, delayed payments to providers, and reduced access to care for vulnerable Alaskans.”
City and Borough Juneau will be releasing a statement about the expected impact of school bond debt, but it may be a few hours off.
House Republicans are less critical of the vetoes.
“This entire session, the House Republican caucus has been united behind the idea that government should be smaller and should spend less, and we remain committed to that principle,” said Rep. Lance Pruitt, R-Anchorage, House Minority Leader, in a press release. “ Over the coming days, we will be analyzing the details of each reduction as we continue to advocate for authorization of the Permanent Fund Dividend.”
He said if his caucus does decide to revisit the reductions, they will do so through the capital budget or through the capital budget, not through overriding the vetoes.
Senate Democrats have already voiced displeasure for the vetoes.
“Governor Dunleavy simply doesn’t value public education in Alaska. The majority of his cuts cripple our University system – which should be a world-renowned leader in Arctic and global research, and takes away certainty for public schools, educators, and families,” said Senate Democratic Leader Tom Begich, D-Anchorage, in a press release. “The consequence of Governor Dunleavy’s mission will be to drive young adults and families out of this state, which in turn will have a significant impact on our economy.”
Among the vetoes listed on a press briefing distributed during this meeting are: $130.3 million for University of Alaska, $50 million from Medicaid, $20.79 million for senior benefits and a 50-percent reduction of school bond debt reimbursement totalling $48.9 million.
The Alaska Marine Highway System will be funded at the Legislature-approved level of $46 million, but $3.4 million was vetoed from the Ocean Rangers program.
“After repeal of the Ocean Ranger program, permitting and compliance staff will monitor cruise ships for compliance with state wastewater and air quality permits and regulations through record reviews, intersections in port, opacity monitoring and vessel tracking,” reads the briefing.
The veto to senior benefits eliminates the Senior Benefits Program.
Dunleavy was asked if he expects the cut to debt reimbursement causing a raise to local property taxes.
“I don’t know the answer to that,” Dunleavy said. “That depends on the community.”
He said he does expect some discussion of overriding his vetoes.
Completely destructive and reprehensible budget. Sacrifice seniors/college students/rural Alaskans/children/small business? But protect wealthy elite/oil corporations/foreign businesses. Prepare for a veto override @GovDunleavy #shameful #akleg— Scott Kawasaki (@alaskascott) June 28, 2019
Dunleavy said this year’s cuts are now being viewed as part of a two-year process toward a balanced budget, and his vetoes will roughly cut the spending deficit in half.
“This action this year eliminates close to 50 percent of the deficit,” Dunleavy said. “I believe we’re on our way to a balanced budget.”
“We can’t kick the can down the road because we’re running out of road,” he said.
Office of Management and Budget Director Donna Arduin was introduced.
She said the governor vetoed 182 lines of the Legislature’s budget for the lowest spending since 2005.
Members of the media have started to file into the conference room, which is one of few air conditioned rooms in the capitol.
This announcement is expected to be livestreamed through the governor’s website.
Gov. Mike Dunleavy is holding a press conference at 11 a.m. today to announce the signing of the state’s budget and to outline line-item vetoes.
What exactly will be vetoed wasn’t shared in the release announcing the conference, but they were described as, “a series of line-item vetoes to better align state revenues and expenditure.”
The Legislature has the ability to override the vetoes if they have sufficient support.
The $4.4 billion budget sent to Dunleavy’s desk was $190 million lower than last year’s budget, but that’s still about $ 1 billion less than Duvleavy’s proposed cuts.
While the specifics of Dunleavy’s vetoes haven’t been shared, University of Alaska President Jim Johnsen has already announced a press conference to address the cuts following an emergency Board of Regents meeting this morning.
“President Johnsen will comment on the Governor’s operating budget and how a veto will impact the University of Alaska, review actions taken by the Board of Regents and answer questions from the media,” states a release from the university.
• Contact reporter Ben Hohenstatt at (907)523-2243 or email@example.com. Follow him on Twitter at @BenHohenstatt.