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In two-year proposal, Dunleavy administration targets specific areas of UA budget for cuts

Following Gov. Mike Dunleavy’s veto of $130 million in state funding for the University of Alaska system, his administration this month proposed another option for UA: Make similarly deep cuts, but over two years and in targeted areas, according to a document released Friday.

The state Office of Management and Budget’s one-page document detailing a proposal was released by UA on Friday, a day after the governor told reporters that his administration was working with the public university system on a “step-down approach,” but didn’t provide details.

UA said in a statement that there have been some discussions with OMB, but UA had not endorsed or agreed with the proposal. Longtime UA officials said they’d never seen anything like the proposal before: The OMB document prescribes specific cuts to specific areas of the university system’s budget. It also includes a condition: Restoration of $38 million in funding this year requires the cuts be “confined to identified categories.”

The proposal assigns a $35 million cut to research in one year and a $54 million cut to “overhead” over two years. It says UA will cut nearly $12 million next year by consolidating schools of arts and sciences, according to the OMB document.

“I find it odd that we have politicians now making decisions about the future of the university,” said Maria Williams, a professor of Alaska Native studies at the University of Alaska Anchorage who chairs UA’s Faculty Alliance. “This really makes me feel like we're not in the driver's seat any more, it's now in the hands of politicians and think tanks that are very politically aligned with a very conservative view of what education should be.”

Representatives from Dunleavy’s administration are expected to present the proposal Tuesday at the UA Board of Regents meeting in Anchorage. Also at that meeting, regents are scheduled to discuss how to structure the university system in the face of the current $135 million budget cut.

Dunleavy on June 28 vetoed $130 million in state funding for UA for the fiscal year that started three days later. That was atop a $5 million cut approved by the state Legislature. In total that’s an unprecedented 41% cut to UA’s state funding. It’s just over 15% of UA’s total operating budget for the last fiscal year: $855.4 million.

The cut sparked outcry, and it prompted UA regents to declare “financial exigency” this week, allowing UA to more quickly downsize in the face of a financial crisis.

A document from the governor’s office explaining his veto to UA says the university system is too dependent on state funding and it has too many high-paid executives, too many duplicative programs and outcomes that are too poor. UA President Jim Johnsen has said that document lacks proper context.

Dunleavy is a former educator who got his master’s degree from the University of Alaska Fairbanks and also worked at UA.

In a statement Friday, Dunleavy’s press secretary Matt Shuckerow said the governor’s office and UA “have been working together on a path forward and a proposed timeline for inevitable changes and consolidation.”

“These discussions include proposals to spread out reductions over a period longer than a year in order to implement necessary reforms,” he said.

Shuckerow said the OMB document was shared with UA staff as part of Tuesday’s presentation. In response to a reporter’s request to speak with someone about the proposal’s numbers, Shuckerow said the proposal would be presented Tuesday and he didn’t anticipate comment before then.

On Thursday, Dunleavy told reporters: “We are working with the University of Alaska, as I mentioned, to come up with a plan, a step-down approach, that would not be done in one year, but over multiple years. ... We’re making some attempts to soften the blow of these reductions for Alaskans.”

Johnsen, the UA president, was not available for comment Friday, said a university spokeswoman.

Broadly, the OMB proposal includes two phases: Phase one is a nearly $85 million cut to UA’s budget in the current fiscal year that started July 1, and phase two is a $38 million cut the following year, according to the document. It appears there’s another $10 million reduction included for the current fiscal year, with the total, two-year cut amounting to $132.8 million.

The proposal also includes comments with the targeted cuts, such as the cut to research. The document says: Use reserves in year one and then fund with “private, corporate, federal funds."

State funding is used to write the research proposals and collect preliminary data to apply for grants, UA has said.

The OMB proposal also includes erasing state funding for the University of Alaska Museum of the North. To fill the roughly $1 million gap, the document says, “Replace with fees."

Asked if that was possible, museum director Pat Druckenmiller said Friday: “No, 100% no.”

“I’m not sure what fees they think there are,” he said. “We serve the state of Alaska, we serve our visitors who we charge a very reasonable rate to."

The impact of such a state funding cut, he said, "would be devastating to the museum.”

The museum houses a collection of 2.5 million objects including artifacts, specimens and art.

“We cannot just turn off the lights and walk away from those,” he said. “These are the things that represent our state’s history.”

That collection is also vital for research, which brings in federal dollars, Druckenmiller said.

In his 35 years with UA, University of Alaska Southeast Chancellor Rick Caulfield said he’d never seen a proposal from a governor’s office like the OMB document.

“I really question having the executive branch inserting themselves into the areas that have been the purview of the Board of Regents over all of these years,” he said.

The document is dated July 19. A note on the document says the data included was provided by UA a day earlier.

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