Donna Arduin, Director of the Office of Management and Budget, speaks to House members during an informational meeting at the Capitol on Thursday, Feb. 7, 2019. (Michael Penn | Juneau Empire)

Donna Arduin, Director of the Office of Management and Budget, speaks to House members during an informational meeting at the Capitol on Thursday, Feb. 7, 2019. (Michael Penn | Juneau Empire)

House Republicans criticize Dunleavy’s proposed education cut

Money was supposed to go out to schools in late January

Alaska House Republicans on Thursday criticized Gov. Mike Dunleavy’s proposal to cut $20 million from the Department of Education in order to pay more for Anchorage earthquake relief and increase funding for Alaska State Troopers, among a few other middle-of-the-year budget needs.

Democrats, while some of the most vocally opposed to the education cuts, aren’t the only ones disapproving of targeting the school districts for cuts.

“You want the school districts to plan their districts, but you want us to go back and take money away from them? I’m in disbelief,” said Rep. Louise Stutes, a Republican from Kodiak.

Not one representative from either side of the aisle spoke in favor of the proposed cut or said they planned to endorse it at a review of the supplemental budget in a House meeting on Thursday morning.

“I think what the public does understand is that we were going to give them money, and now we’re not. That sends a bad message,” Rep. Neal Foster, a Nome Democrat, said of the proposed cut during an informal presentation given by Office of Management and Budget Director Donna Arduin. He added, “I for one can’t support that.”

Last month Gov. Mike Dunleavy introduced Senate Bill 39, a supplemental budget bill, that proposes to move funds from one department to another. The $20 million cut would apply to an appropriation that is the result of a bipartisan budget deal made in May 2018.

As OMB director, Arduin has been tasked with helping the Dunleavy produce a budget, which is expected to suggest unprecedented cuts to the operating budget. The governor plans to unveil the legislation for this budget on Feb. 13.

In recent years, Alaska has used its savings to shore up its deficit. Dunleavy plans to align expenditures and revenues by cutting upward of $1.6 billion from the budget. This comes after massive cuts the past several years, due to Alaska’s recession from declining oil revenue. The one-time $20 million in education funding was passed as a way to alleviate some of those previous cuts in funding.

“To put that in perspective, (the $1.6 billion Dunleavy is proposing cutting) is about equal to what the state spends on K-12 public education and the university,” said Rep. Chris Tuck, D-Anchorage in his Tuesday newsletter. “That’s about what was spent on Dividends last year. That’s more than the entire Department of Health & Social Services budget. That’s about a third of last year’s budget. That’s a lot of money to cut. It would be impossible to make that amount of cuts without devastating Alaska’s economy, weakening our infrastructure, depriving our children of a decent education or cutting corners on public safety.”

Arduin has taken the lead on presenting these new supplemental budget bills.

“The state is in deficit, and we’re going to have to make some hard decisions,” Arduin said at one point in the meeting. She also reminded the representatives on several occasions the supplemental budget bill that was crafted is a proposal, and the House would have to pass it for this cut to go into effect.

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Rep. Sarah Vance, a freshman Republican from Homer, said it’s their job as legislators to find other funds within the budget that could be moved to shore-up other departments, rather than making education cuts.

Arduin responded to Vance, saying there is definite flexibility where budget cuts could be made, aside from education. Arduin said she would certainly welcome other suggestions.

“Doing less with less”

Previously, Arduin said that one of the guiding principles for putting the budget together is asking departments to “do less with less” instead of asking them to do more with less money. She said her office is currently identifying each department’s core mission and figuring out if that department’s expenditures match up with that mission.

How does that philosophy play into education and other issues? Alaska is the worst in the nation when it comes to high school graduation rates, crime rates and sexual assault rates and ranks dead last on a national ranking of best states for business.

[Ferry system braces for budget cuts]

“It worries the heck out of me,” said Sen. Jesse Kiehl, D-Juneau. “If the idea is we’re going to leave entrepreneurs without access to health care, then that’s bad for the economy. That’s what happens if you roll back Medicaid expansion. If the idea is we’re not going to educate our kids, or we’re going to educate them in classrooms of 45, it’s bad for families; it’s bad for the economy. If the idea is we’re not going to treat mental health problems or opioid addiction, the crime rate’s going through the roof. So I’m not exactly what we’ll do less of, but it’s got me worried.”

While Alaska’s high school graduation rate has risen from 61.2 percent to 75.6 percent over the last 10 years (of available data from 2004-2014), the state still remains almost 10 percent lower the national average of 83.2 percent, according to statistics from the Department of Education.

Rep. Tammie Wilson, R-North Pole, disagreed with Arduin at Thursday’s meeting on whether that $20 million of education funding had been used.

Arduin had said the money had not been spent because it has not yet been given out. School districts were expecting to see that money come at the end of January. Wilson countered saying school districts had entered into contracts already based on the promise from the legislature they would receive that money.

“To say that it wasn’t encumbered is not a true statement,” Wilson said at the Thursday House meeting.

Most school districts approved their budgets for the 2018-2019 school year last spring or summer. School districts are separate entities from the state legislature, and Arduin said, “We can’t micromanage them.”

Not a partisan issue

Foster said in an Thursday interview with the Empire he doesn’t think the proposed cuts will make it through legislature into law. Representatives asked the OMB whether the governor would approve a version of the law that did not incorporate these cuts.

Since the $20 million was supposed to go out to school districts in the end of January, Foster and Rep. Gabrielle LeDoux, R-Anchorage, also worried that when a supplemental bill does pass, if it did not cut the $20 million, how fast that money would be able to get delivered to school districts.

“We’re halfway through the fiscal year, a lot of (those districts) have probably already spent that money,” Foster said.

Foster spoke in the hypothetical and asked if the legislature approved a supplemental bill without the cuts in 10 days, would the governor’s office be able to get that money to the districts in 20 days? But in an interview with Empire after the meeting, he admitted it probably wouldn’t happen that quickly, considering the House is still not organized, and cannot pass legislation until it does so.

After the meeting, Vance said this education cut is not and should not be made into a partisan issue and the representatives are all trying to find the best way forward.

“It’s the job of the legislature to find the money, to meet the requests of the (Dunleavy Administration),” Vance said. “It doesn’t have to necessarily have to come from education. We as a legislature want to honor that it can come elsewhere, because we as a legislature want to honor the money that has been allocated to education. They’ve made contracts. They were promised money and we want to stand by that and not pull the rug out from them.”

Vance said they will have to balance the budget somehow, but they cannot rely on savings like they have in recent years.

“We’re going to have to learn to do business differently,” Vance added.

• Contact reporter Kevin Baird at 523-5528 or Contact reporter Mollie Barnes at or 523-2228.

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