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Cuts to homeless services in Dunleavy budget would displace hundreds of vulnerable people, providers say

  • Author: Devin Kelly
  • Updated: February 16
  • Published February 15

Safe Harbor, a supportive housing facility in Muldoon. Funding for Safe Harbor and six other supportive housing facilities statewide would be cut under Gov. Dunleavy's proposed budget. (Loren Holmes / ADN)

Hundreds of vulnerable low-income people and families could be displaced if sharp cutbacks in state spending proposed this week by Alaska Gov. Mike Dunleavy take effect, social services agencies say.

Dunleavy’s budget, announced Wednesday in Juneau, cuts hundreds of millions of dollars overall in state spending. Health and education saw some of the steepest reductions. Dunleavy and his deputies say the budget is an effort to bring state spending in line with revenues without raising taxes or cutting Permanent Fund dividends.

In the days since, the proposal has triggered a predictable but mounting flurry of backlash from the leaders of organizations affected by the cuts. That now includes homeless advocates, who say they are alarmed by what appear to be steep cuts to two key grant programs that fund housing and homeless services.

Funding for a homeless assistance program administered by the Alaska Housing Finance Corp. is set to plummet from $7.9 million to $950,000, documents show. Another special-needs housing grant program would drop from about $1.7 million to $200,000 in the coming year, budget documents show. Summaries accompanying budget documents describe steadily rising demand for the services the past five years.

The $1.3 million budget for a matching grant program in the state Department of Health and Social Services, which helps pay for case management services, was cut entirely, according to budget documents.

The governor decided to cut the housing grant money “due to the fiscal situation,” Laura Cramer, deputy director of the Office of Management and Budget, wrote in an email.

“We look forward to working with the legislature through their process on these programs,” Cramer wrote.

The cuts, if maintained, would force the Rural Alaska Community Action Program, or RurAL CAP, to close seven statewide supportive housing facilities, said Corinne O’Neill, the director of supportive housing. That includes four in Anchorage: Karluk Manor in Fairview, Sitka Place in Mountain View, 325 E. Third Avenue near downtown, and Safe Harbor in Muldoon.

The facilities housed 550 people last year, including 185 children, according to O’Neill. Some of the residents are among the state’s most vulnerable, experiencing mental illness, chronic alcoholism and substance abuse disorders, and developmental and physical disabilities, she said.

If it weren’t for nonprofit housing developers, people would be “inappropriately housed” at the Alaska Psychiatric Institute or in jail, state officials wrote in a description of the program.

“The cost of providing community-based care is significantly lower than institutional care,” the document says.

In general, thousands of vulnerable Alaskans use services funded by the grants that would be cut or eliminated, said Brian Wilson, the director of the Alaska Coalition to End Homelessness. A few dozen organizations across the state get grant money each year, according to a spreadsheet provided by Wilson.

Recent examples include several Salvation Army branches; Partners for Progress, an Anchorage nonprofit that houses and works on job training with people leaving jail; shelters and programs for women who have been abused or assaulted; and a transitional housing program in Juneau for people with criminal records or substance abuse disorders.

Juneau’s first Housing First project opened about a year ago, offering housing to 32 of the most vulnerable and chronically homeless residents, Wilson said. The facility also relies on the state grant funding, he said.

“There are many communities where (the grant money) is the sole resource in their community to address or prevent homelessness,” Wilson said.

Karluk Manor, photographed on Friday. (Loren Holmes / ADN)

A representative of the governor’s office was not immediately available to comment on the specific cuts. But staff members for Dunleavy have said Alaska’s state government is spending beyond its means. More spending does not necessarily correspond with positive results, state budget director Donna Arduin contended in a news conference Wednesday.

Affected programs will have to make a case for reversing a cut and also come up with a way to pay for it, Jeremy Price, a deputy chief of staff for Dunleavy, said Thursday.

O’Neill predicted that cutting homeless services would ultimately cost the state more in emergency medical calls, jail stays and increased use of the state foster care system.

“I just think there are other ways than cutting these very, very essential services in the state,” O’Neill said. “These are life-or-death services for people.”

The Brother Francis Shelter in Anchorage, the state’s largest emergency homeless shelter, draws about 10 percent of its funding from the state grants, said Lisa Aquino, the director of Catholic Social Services. If the cuts are implemented, the shelter would serve far fewer people and curb its case management services, Aquino said.

Aquino called the proposed cuts “devastating” but said she did not want to frighten people who rely on the services now.

“We will work hard to try to figure it out,” Aquino said.

Wilson said the affected organizations would be releasing a statement and encouraging community members to contact legislators.

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