Capital budget vetoes leave gap for homeless services in Anchorage

Gov. Mike Dunleavy’s decision to veto millions of dollars from homelessness assistance will have consequences in the coming winter, charities are warning, even though the cuts are not as severe as originally planned.

Last week, the governor vetoed $34.7 million from legislation intended to fix the state’s capital budget. The Alaska Housing Finance Corp. received the brunt of those vetoes, as the governor eliminated a combined $11.1 million in state support from four AHFC programs.

The $3.6 million removed from AHFC’s Homeless Assistance Program, even though it’s not the largest cut among them, is the most significant, several social service organizations said. Of the 35 agencies receiving grants this year, nine are in Anchorage and will collectively receive more than $2.1 million, according to AHFC documents.

“This is a threadbare system,” said Lisa Aquino, executive director of Catholic Social Services in Anchorage. “This is a system that is not funded at a level that’s really needed to solve homelessness.”

Last week’s cut amounts to half of the program’s funding in the fiscal year that started July 1. AHFC has mitigated some of the cut by diverting money from a separate grant program intended to fight homelessness, but the end result is still a 20% reduction.

Aquino warned that at present levels of funding, she is not sure Anchorage’s Clare House, an emergency shelter for women and children, will be able to stay open. Patrick Anderson of RurAL CAP said he’s not sure of the future of Sitka Place, which provides housing for homeless families and individuals.

In addition, the lengthy fight between the Legislature and governor over the size of the budget has left anti-homelessness groups adrift in uncertainty. Many have been forced to furlough or lay off staff, or cut services.


“Some of the damage has already been done," said Dave Rose, coalition coordinator of the Mat-Su Coalition on Housing and Homelessness.

“To hear that 80%, 81% is going to be funded, that’s wonderful news. Don’t get me wrong. That’s awesome news, but at the same time, I don’t want to minimize the damage or the near damage that’s already been done.”

Jasmine Boyle, executive director of the Anchorage Coalition to End Homelessness, said that when dealing with homelessness, there is a difference between “shelter” and “housing.”

“Shelter is about putting you in a safe, warm place. … Housing is about finding you a sustainable, long-term place for the remainder of your life,” she said.

The state has four main grants for reducing homelessness, she said, but when it comes to short-term shelter, the grant halved by Dunleavy is the most important.

“BHAP is really front-line emergency help,” Boyle said, referring to the formal abbreviation of the Homeless Assistance Program.

AHFC itself stated in February the consequences of a cut: “Inadequate funding will increase the number of homeless families in Alaska and force existing shelters to either exceed capacity or turn away clients. Families in areas where no shelter exists will be forced to live in substandard and/or overcrowded conditions, known to foster higher degrees of domestic violence and substance abuse. Low-wage earning households experiencing a family crisis will also have to contend with the likelihood of homelessness if emergency rental assistance is not available. In some cases, the homeless will cycle into the correctional or mental health system due to lack of adequate housing.”

The Municipality of Anchorage is already under a civil emergency declaration that has unlocked stopgap funding for homelessness services. Boyle said that while the city is helping matters, “the municipality has limited funds to invest.”

Since February, Dunleavy has said his intention is to balance the state’s budget without raising taxes, reducing the Permanent Fund dividend or spending from savings.

“My intention was never to cause angst,” the governor reiterated in a speech Tuesday.

But pursuing his strategy requires extensive budget cuts, and while angst might not have been the goal, it has been the result for some.

“It’s a house of cards,” Aquino said. “With one piece gone, we all have to really scramble to pull it back together.”

Because of those consequences, AHFC reacted quickly after the governor’s vetoes last week.

“All of our attention has been focused on the homeless shelters," said Stacy Barnes, director of governmental relations and public affairs for the corporation.

Though the governor cut $3.6 million from homeless assistance, he left untouched another $2 million intended for a separate special-needs housing grant program. AHFC diverted that money to partially cover the gap in homeless assistance, sent out a preliminary note to charities on Friday, and a final grant award on Monday.

“I think that AHFC did a nice job of taking the money that was available," Boyle said.

After the vetoes were announced last week, the governor’s office released information that indicated AHFC still had millions of dollars left unspent for homelessness issues. Diane Kaplan, head of the Rasmuson Foundation — the state’s largest charitable organization — responded with an email to the governor’s press secretary and several reporters saying that much of that money has already been reserved for future payments, and it is misleading to simply say that it is still unspent.


“Plain and simple, the information in your press release is completely false,” Kaplan wrote.

Kaplan also disputed some of the specific figures used by the governor’s office, which responded by saying that they were based on a December 2018 report.

Barnes confirmed that the figures are accurate if 2018 is the baseline, but that it is also correct to say much of the money has been reserved.

Following initial publication of this story, the governor’s press secretary, Matt Shuckerow, said by email, “The Governor’s office is under no impression that these funds are not already largely dedicated to organizations, however the fact remains that significant funds remain unspent and in a pipeline for services and care. The information and number shared last week are according to December 2018 reporting.”

The issue of the Homeless Assistance Program is not the final word on possible cuts. Other housing-program grants that were vetoed in June are in a separate piece of legislation, and the governor is expected to decide their fate this week.

Additional AHFC vetoes:

• When it comes to the $5 million cut to weatherization, Barnes said that although the program is known for home insulation, it also pays for “life-safety improvements.” She added that AHFC still has access to $2 million in federal money for the program.

• The elimination of $750,000 for the nonprofit Cold Climate Housing Research Center in Fairbanks, as previously reported by the Fairbanks Daily News-Miner and Arctic Sounder, likely means the closure of the center starting Jan. 1.


• Barnes said AHFC doesn’t yet know the effects of the $1.75 million cut for teacher, nursing and police housing. That program is a matching-effort program with local municipalities and their school districts. Barnes said a $500,000 contribution from the Rasmuson Foundation is still available for the program. Following the publication of this article, Rasmuson Foundation spokeswoman Lisa Demer said by text message that the $500,000 is a matching grant, and the foundation will seek to withdraw the money.

Related stories:

Dunleavy budget vetoes will mean a sharp increase in people living in camps and cars, service providers say

Dunleavy budget veto cuts services to the homeless statewide, hitting Anchorage hardest

James Brooks

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