There is a story that went largely unreported this past spring which merits some attention and discussion: the governor’s budget vetoes of April 7 (mostly concerning fiscal year 2021) are more egregious and harmful to Alaskans, ultimately, than the infamous fiscal 2020 vetoes on June 28, 2019, that gave strength to the current recall effort.
Since the governor’s inauguration in December 2018, three key dates set the course for this administration’s budget proposals and responses to legislative appropriations. The first was Feb. 13, 2019. On that day, the administration recommended an operating budget that was met with such immediate disdain by both legislative majorities that it was roundly and summarily rejected. The budget offended core principles of so many Alaskans that it helped end the stalemate over organization of the House Majority, as the current majority was formed the day after its publication. Gov. Mike Dunleavy’s original proposal called for an overall budget reduction of about $1.3 billion in the operating budget. Since 2015, the operating budget had already been cut $1.1 billion, or 24% — this would have been in addition to those cuts.
The second most critical day last year was June 28, 2019, a day forever embedded in my consciousness. On that day, the governor vetoed $416 million from the state’s operating and capital budgets. Vetoed items from just the operating budget included cuts or elimination of Adult Dental Medicaid, Adult Public Assistance, Alaska Legal Services, Alaska Public Broadcasting, the Arts Council, Behavioral Health Grants, Human Services and Community Matching Grants, the Ocean Ranger Program, Online with Libraries, pre-K programs including Head Start, and the Senior Benefits program. Also included in his first round of vetoes were massive cuts to community assistance, to school bond debt reimbursement and to the University of Alaska (forcing it into financial exigency). The most patently illegal cut was one to the Alaska Court System; The governor declared he disliked one of its rulings and slashed its budget as punishment. The governor also struck Medicaid dollars. He believed — incorrectly, it turns out — that his Health and Social Services Department could quickly suspend programs which it could not so easily discontinue.
The response to these vetoes was swift and deafening. Prior to the vetoes, there was no significant recall effort. After the vetoes, an organic response grew into the most serious recall effort in state history.
Last summer, the Legislature responded to the vetoes with outrage and action. After attempting to override all the vetoes, it used a July special session opportunity to try to restore most of the cut items. Through House Bill 2001, the Legislature attempted to restore $290 million in operations spending which, by itself, constitutes 79% of the total state operations appropriations vetoed the previous month. The governor re-vetoed a large amount of this, but let stand $163 million in general fund spending he had originally vetoed on June 28. Clearly, the Legislature responded swiftly to public will and anger over the original vetoes. Programs that saw restored funding from the efforts of legislators of both parties included Alaska Legal Services, the Arts Council, Human Services and Community Matching Grants, Online with Libraries, Pre-K programs, Senior Benefits, and some university dollars (though not nearly enough).
However — and here’s the key — the story of a budgetary year cannot be known until the fiscal year expires. The 2020 fiscal year did not end until June 30 of this year. Until it closed out, the egregious $416 million in total vetoes (essentially reduced to about $270 million through the insistence of some in the Legislature last July), while presumptively final as of June 28 last year were, in fact, not the final word. Instead, a supplemental budget was added to last year’s expenditures, part of it associated with the worst fire season in memory. And, because the governor could not make cuts to Medicaid and Adult Public Assistance as he desired, we added back a total of about $136 million, much of it vetoed twice last summer! So, while the governor wanted to reduce spending by $1.3 billion, he actually reduced spending by closer to 10% of that, largely because of public and legislative resistance to his plans. The net effect of vetoes and add-backs, in the end, was in the range of $135 million.
The third most critical date was April 7 of this year. On that day, the governor issued 113 vetoes, a combined $262 million in funding from the fiscal 2021 operating and supplemental budgets. Included in this painful round of vetoes were monies for community assistance, school bond debt reimbursement and $30 million to public schools. The governor again, for what I believe is an unconstitutional purpose, vetoed the court system’s budget. Did the Legislature respond with equal dismay to a total of $262 million in vetoes? After all, this number easily exceeds the final impact of last year’s vetoes.
Sadly, we did not respond with the same fervor. Nor did the public. Why not? I believe there are four factors that changed the legislative response to the April vetoes: First, legislators have their own level of individual fear of contracting COVID-19. Second, some legislators are faced with primary elections that pressure them into conforming with the governor’s position. Third, the public response was far more muted. The public is, understandably, distracted with economic and health concerns, and it may be inured to additional cuts. Finally, the governor declared, mistakenly, that CARES Act dollars could be used to backfill his vetoes. Two weeks later, he conceded that he was wrong.
Just as justice delayed is justice denied, the Legislature must see to it that the appropriations it wants are delivered in a timely way. If it waits until the 11th hour to fix things, their value diminishes. And, as things stand now, the vetoed $262 million is far more impactful than the ultimate fiscal 2020 cuts.
Rep. Andy Josephson was elected to the Alaska State House of Representatives in 2012 and represents residents in Midtown, the university area and East Anchorage.
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