Dunleavy marks 1st year in office amid turmoil

Last December, poor weather scrambled Alaska Gov. Mike Dunleavy’s inaugural plans, a bumpy start to a turbulent year marked by budget disputes and a recall threat.

Dunleavy told The Associated Press recently he hopes to move past the rancor. Whether he can repair strained relationships with legislators and calm the public anger over cuts that fueled the recall push will be telling. Courts will decide whether the recall effort advances.

The Republican, who marks a year in office Tuesday, defended the cuts as a tough decision in the face of budget deficits. Alaska, long reliant on oil, has been using savings and earnings from its oil-wealth fund, the Alaska Permanent Fund, to help fill the gap. New taxes weren’t debated during legislative sessions that lingered into summer, and Dunleavy said new taxes “are not going to solve” the deficit. The state tends to spend money when it comes into money, he said.

He said the question is what Alaskans are willing to accept to resolve the issue, such as further cuts, changes to the annual check they get from Permanent Fund earnings or other revenue measures. He said he plans town halls with Alaskans and regular meetings with lawmakers, some of whom had complained of poor communication by the administration and a singling out of members for positions at odds with Dunleavy’s.

“I think there’s some tension only because there’s different priorities. But the tension gets worse when there’s no understanding on where someone’s coming from,” said Rep. Tammie Wilson, R-North Pole, who said getting information on administration positions had at times been difficult.

Dunleavy said he plans to renew his push for constitutional measures related to a spending cap and giving Alaskans a say on taxes approved by lawmakers and lawmakers a say on taxes approved by citizen initiatives. He did not provide specifics on his new budget proposal, due by mid-December.

“We’re going to continue to do the right thing for Alaska even though it may not be in some circles politically palatable,” he said.

Some speculated former chief of staff Tuckerman Babcock and Donna Arduin, a former budget office director with a national reputation for slashing budgets, held considerable sway with Dunleavy.

“This is my administration, and I take responsibility for the actions,” Dunleavy said.

Dunleavy said having the right people to implement an agenda is important. He said Babcock and Arduin were the right people at the time.

There have been other changes among his staff. Dunleavy’s press secretary, Matt Shuckerow, left in October. Communications director Mary Ann Pruitt left what was cast as a temporary role Oct. 31, but her PR firm has a contract for communications work through January, she said.

Outgoing Revenue Commissioner Bruce Tangeman said the person in his role should be fully aligned with Dunleavy. Tangeman said with changing political sands, he isn’t sure he would be.

There was public outcry over deep cuts Dunleavy proposed. Amid questions about revenue, there’s a citizen effort underway to put before voters an initiative that would raise taxes on Alaska’s legacy oil fields. Many lawmakers are interested in somehow changing the formula for calculating Permanent Fund dividends.

Dunleavy argued for following a decades-old formula many lawmakers say is at odds with a 2018 law seeking to limit withdrawals from fund earnings.

Republican Senate President Cathy Giessel said she’s had productive conversations with Dunleavy’s new chief of staff, Ben Stevens, a former lawmaker. House Speaker Bryce Edgmon, an independent, said he saw as a good start a recent legislative leadership meeting with Dunleavy.

Edgmon and Giessel stood against the administration on what they saw as separation of powers issues, including disputes over school funding and a special session location.

State GOP chair Glenn Clary said the party, which plans a “unity gala” Dec. 6, wants to repair relationships between Republican lawmakers and Dunleavy’s office.

He said there are “major personalities” at play.

“People just need to understand that you can agree to disagree, but you don’t have to be disagreeable,” Clary said.

Dunleavy expressed frustration that positive economic signs after three years of recession aren’t getting enough attention. Figures appear to show budget cuts didn’t “destroy the economy,” as he said some feared.

Dunleavy moderated or relented on some vetoes, including the level of cut to the University of Alaska.

Mouhcine Guettabi, an associate professor of economics at the Institute of Social and Economic Research at the University of Alaska Anchorage, said the economy is out of recession but the recovery has been uneven. Federal figures indicate the 6.2% preliminary unemployment rate is the lowest it’s been for Alaska over a span dating to 1976.

Guettabi said the unemployment figure is driven in part by jobs gains but also by people leaving the labor force. The national unemployment rate for October was 3.6%.

He said he doesn’t think the economy growing means that cuts have no consequences but it’s unclear what impact they may have on economic gains.

Ongoing debate over fiscal issues, including what to do with the dividend, is expected to resume in January, during an election year for most legislators. If the recall advances, it would go to a second signature-gathering phase.

Claire Pywell, manager of the recall campaign, said supporters want an opportunity to vote on whether to fire or retain the governor.

Dunleavy said he wants people to understand the state’s fiscal situation. He said he has faith in the people of Alaska and the court system.

“So, like I said, I’ve got to put my faith in the people of Alaska and the court system to do the right thing. I’m going to do the right thing, and we’ll see where it ends up,” he said.

---

• This is an Associated Press report by Becky Bohrer.

---