Mat-Su fears $60 million in cuts under governor’s proposed budget

PALMER -- Mat-Su officials say they stand to lose about $60 million in local and school funding if the current version of Gov. Mike Dunleavy’s proposed budget is adopted.

Borough and school representatives at a special meeting convened Tuesday night by the Matanuska-Susitna Assembly expressed the most concern over the potential loss of more than $18 million a year to pay back school building construction debt in the fastest growing community in Alaska -- Dunleavy’s home turf.

The proposed budget would also result in a $39 million reduction in the base student allocation for the school district, a loss of more than $700,000 to pay down debt at the borough’s port, and nearly $2 million in shared revenue, according to borough public information officer Patty Sullivan.

Borough Manager John Moosey noted the $18 million school debt reimbursement cut is “not a one-year cut" because the payments are made every year under a 70-30 state-borough matching agreement.

“This is our challenge,” Moosey said Tuesday night, describing hiring and travel freezes as a result, with budget season just starting.

Dunleavy, a Republican from Wasilla, sat on the 2011 Mat-Su school board that in a 4-3 vote -- with Dunleavy voting yes -- approved about $215 million to build new schools, Borough Mayor Vern Halter noted. He accused Dunleavy of reneging on a partnership with his proposal to cut funding to pay back such debt.

“This is the one issue that probably bothers me the most,” Halter said.


Several officials speaking at the special meeting said they don’t expect the governor’s current proposal to stand, calling it an intentionally extreme starting point.

“I don’t think the governor’s going to get this budget," assembly member Jim Sykes said. "I don’t think he’s expecting it.”

But assembly member Jesse Sumner said he generally supported the budget and only the school debt reimbursement portion fell disproportionately on Mat-Su, whereas new revenues coming from the Permanent Fund dividend or taxes would hit residents harder on a per-capita basis.

“I don’t think we should reject the governor’s budget out of hand,” Sumner said.

The Anchorage School Board last week approved a proposed budget for the 2019-20 school year that includes more state money than last year and doesn’t account for the governor’s funding proposals.

Mat-Su schools superintendent Monica Goyette said that if approved, the governor’s budget could add an average of six students to each class in the Valley but could also result in high school classes with 50 students -- more desks than could fit in classrooms.

If making across-the-board reductions to meet the proposed budget, the district could have to cut more than 350 jobs, according to a presentation Tuesday night. That number includes about 220 teachers and nearly 90 aides and support staff.

Goyette called the assertion from Office of Management and Budget director Donna Arduin that 54 percent of state education dollars reach classrooms a “gross misrepresentation." Statute requires 70 percent go into education, and the statewide average is 74 percent, with six out of 53 districts in the state falling below the statutory threshold, she said.

The borough budget must be approved by the end of May, with property tax bills in the mail by July 1.

The school district needs to notify 970 tenured teachers about any layoffs by May 15 and 265 non-tenured teachers by May 22, Goyette said. She said the district can “contain reductions” within non-tenured teachers even under worst-case budget scenarios but said it’s likely layoff notices will go out either way because state budget decisions probably won’t be complete.

Zaz Hollander

Zaz Hollander is a veteran journalist based in the Mat-Su and is currently an ADN local news editor and reporter. She covers breaking news, the Mat-Su region, aviation and general assignments. Contact her at