Politics

Dunleavy says his plan for Alaska’s future will depend on the budget

JUNEAU — Gov. Mike Dunleavy said Tuesday his plan for Alaska is to balance state revenue and expenses, then figure out a path forward for the state’s education, health care and other programs within the bounds of that narrower budget.

The governor’s spending plan cuts overall state expenditures $1.8 billion from the current year to pay a larger Permanent Fund dividend without new taxes or spending from savings, but it has been criticized for potential effects on public schools, the University of Alaska, Medicaid and other state services.

While the governor has repeatedly said he wants to make sure spending doesn’t exceed revenue, he has not explained his plans for delivering those services under a smaller budget.

On Tuesday, in an interview with the Daily News, he said that vision doesn’t yet exist. His first priority is setting the bounds of the state’s budget, he said.

“My vision when we started this was a mathematical issue. This, first of all, was not judging programs and based upon outcomes, per se, or how people value the programs. This was a mathematical issue first to get our expenditures in line with our revenues,” he said. The interview was one of several with Alaska news media on Tuesday, and the first time Dunleavy has spoken at length since his proposed budget was unveiled earlier this month.

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When pressed for specifics, the governor said, “I want to have effective education. That’s what I want to have. I want an education where all kids can read and do mathematics at least at the algebraic level. That’s what I want. What does that look like? I think we have lots of room for discussion on what that looks like and how we get there."

During his campaign for governor, Dunleavy said he would seek efficiencies in the state budget rather than make broad cuts. He specifically pledged to not cut the state ferry system.

Dunleavy said he was forced to break those promises because of the price of oil.

“If the numbers that were given to us during the campaign, $75 a barrel oil, were accurate, we would probably have a little bit larger budget. That could have addressed some of those issues, but that wasn’t the case,” he said.

[Read the full interview with Gov. Mike Dunleavy]

In addition, he said Tuesday he was “outside of the administration” and didn’t have a full picture of the state’s budget. Dunleavy served as a member of the Alaska Senate’s finance committee before he resigned to run for governor but said that position didn’t give him that picture.

“We would ask for presentations and we would get presentations, but we didn’t get inside and weren’t able to see the nuts and bolts and actually what was going on,” he said.

He said he doesn’t enjoy the cuts he’s proposing, but he sees them as necessary.

“Am I looking forward to cutting, am I looking forward to impacting the lives of of individual Alaskans and groups of Alaskans? No. But because of the $1.6 billion (deficit) and because of revenue not at 75 but at 64 (dollars a barrel for Alaska oil), we’ve had to make some decisions,” he said.

A significant portion of that deficit is due to the governor’s pledge to pay a Permanent Fund dividend using the traditional formula, which had been used since 1982. Former Gov. Bill Walker and the Legislature cut dividends from 2016 to 2018.

Dunleavy feels obligated to use the traditional formula, he said, and also feels obligated to pay back portions of the dividend that were cut by Walker and legislators. The new governing coalition in the Alaska House of Representatives is unlikely to advance the governor’s payback legislation, and Dunleavy said that’s “a bad idea.”

He believes the House wants to reverse some of his proposed budget cuts.

“I think they’re going to have to justify a higher spend in this budget. I’m assuming that’s why they’re not going to pass it,” Dunleavy said.

The governor’s interview with the Daily News was one of several he did Tuesday with reporters. Press secretary Matt Shuckerow said by email that the interviews are “part of a continued conversation with Alaskans over the budget proposal. Much has been discussed about the what and how of the budget, but people are forgetting about the why; and that’s something the governor believes is important.”

James Brooks

James Brooks was a Juneau-based reporter for the ADN from 2018 to May 2022.

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