Dunleavy launches lottery plans and more in second State of the State speech

JUNEAU — Alaska Gov. Mike Dunleavy used his second State of the State address to propose new programs, push for smaller government and boost private-sector business in front of the Alaska Legislature on Monday night, but did not suggest a fix for the state’s expected $1.5 billion deficit.

The governor announced plans for a state lottery, the creation of a state inspector general, new Alaska-hire programs, anti-crime efforts and a program that would award Alaskans land instead of cash for their annual Permanent Fund dividend.

The governor also advocated for some priorities from last year: constitutional amendments limiting spending and taxes, resource development, and improving education.

The governor is facing a campaign to remove him from office but did not mention that effort during his speech. Instead, he focused on the accomplishments of the past year and his goals to come.

Speaker of the House Bryce Edgmon, I-Dillingham, said afterward that the speech represented a “a different tone, a different approach” from a governor who unsuccessfully proposed unprecedented cuts to the state operating budget last year.

He and other members of the multipartisan House majority have opposed many of Dunleavy’s past actions but conditionally praised his speech, saying they await details from the governor.

Budget and amendments

The governor acknowledged that his budget proposal last year “caused many Alaskans discomfort” but that the state still has “a fiscal imbalance.”

“The budget was not crafted with the intent to hurt Alaskans,” he said. “But pulling back the reins on spending certainly caused many Alaskans discomfort — I recognize that. I didn’t run for governor to hurt the state that I love, and the people I care about. No governor wishes to do that. But with that said, we still have a significant fiscal issue that needs to be addressed for the long term.”

This year, the governor proposed a “flat” budget and a Permanent Fund dividend using the traditional formula in state law. Preliminary estimates indicate that would result in a payout of between $3,100 and $3,200 per person and a deficit of $1.5 billion.

Dunleavy has suggested using savings to cover that deficit this year, a plan that House and Senate leaders have already rejected.

In Monday’s speech, Dunleavy urged the Legislature to consider his proposed constitutional amendments that would guarantee the Permanent Fund dividend, tighten the state’s spending cap and require voter approval of new taxes.

The Legislature did not advance those proposals in Dunleavy’s first year, and Edgmon said he does not believe they have sufficient support.

Rep. Neal Foster, D-Nome, said with the focus on future spending, the governor failed to address the budget debate happening this year.

“The budget that he introduced has a $1.5 billion deficit, and how do you cover something like that?” Foster said.

The lone revenue measure mentioned by the governor is the proposed creation of a state lottery, something that Rep. Steve Thompson, R-Fairbanks, suggested could raise on the order of $10 million per year, or less than 1% of the deficit with the traditional dividend.

While not proposing major cuts or revenue, the governor did say he intends to tackle waste and inefficiency, proposing the creation of a state inspector general’s office.

The governor also said it is important to ensure the money the state spends on fighting homelessness is being used effectively but that Alaskans must have compassion for the homeless.

Rep. Chuck Kopp, R-Anchorage, and Rep. Jennifer Johnston, R-Anchorage each said they were uncertain what the governor meant, considering the confusion he caused last year by vetoing funding for programs intended to aid the homeless.

Criminal justice

Dunleavy opened his address by talking about public safety, saying the oft-criticized Senate Bill 91 was repealed “as I promised,” and that he intends to follow that success with additional efforts to fight sex trafficking and the number of people who return to prison after release.

Education

The governor further endorsed early literacy legislation he announced before the start of the legislative session. Senate Bill 6, co-authored with Sen. Tom Begich, D-Anchorage, also includes support for pre-kindergarten programs and is scheduled for hearings in the Senate Finance Committee.

The governor also said that the state needs to improve its teacher retention rate and that he has ordered the creation of a task force to address the problem.

New legislation

To increase the amount of land in private hands, the governor said he will introduce legislation allowing Alaskans to receive land certificates instead of cash for their Permanent Fund dividend. A similar idea with limited eligibility was suggested last year by Rep. George Rauscher, R-Sutton, whose bill is in the House Rules Committee.

The governor also said he intends to charter new incentives for contractors and businesses to hire Alaskans, replacing legislation that Attorney General Kevin Clarkson said is illegal.

Watch the speech (it begins about 10:55 into the video):

Invited guests

The governor invited five Alaskans to attend this year’s State of the State address:

• Bryan Quimby of the Gannett Glacier wildfire crew, one of many who fought last summer’s wildfires.

• John Sturgeon, who successfully fought a legal campaign against the federal government, twice winning cases at the U.S. Supreme Court. (Dunleavy appointed Sturgeon to the state mental health board of trustees last year.)

• Anchorage fifth-grader Levi Shivers, whom Dunleavy emphasized as a reading success story.

• Judy Norton-Eledge, a steadfast supporter of the governor, attended in her role as the state’s literacy council coordinator.

• Posie Boggs of the Alaska Reading Coalition, whom Dunleavy referenced in his push for legislation reforming literacy education.

By the numbers

Dunleavy delivered his 4,600-word speech in 31 minutes, seven minutes more than his 3,500-word speech in 2019 that needed 24 minutes.

The last State of the State given by former Gov. Bill Walker was 49 minutes and 6,200 words long.

Dunleavy was escorted into the chamber by Rep. Gary Knopp, R-Kenai, and Sen. John Coghill, R-North Pole.