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Alaska Legislature

Budget in his hands, Gov. Dunleavy has a little over two weeks to make changes

  • Author: James Brooks
  • Updated: June 15, 2019
  • Published June 14, 2019

JUNEAU — Alaska’s state operating budget is now in the hands of Gov. Mike Dunleavy.

Hours after Alaska legislators adjourned their first special session of 2019, they transmitted the state’s $8.7 billion annual operating budget to the governor. The Alaska Constitution allows the governor up to 20 days — excluding Sundays — to veto specific line items before signing the bill into law. The Alaska Legislature’s tardiness this year, however, means the governor is on a shorter time frame to approve the budget by July 1, the start of the state’s fiscal year.

If a budget is not in place before July 1, the state’s government would shut down.

In a press conference Friday, the governor said his plan is to finish work before that deadline.

“We’re not going to be sending out pink slips,” he said, referencing the contractual requirement that unionized state employees be notified two weeks before layoff.

Dunleavy press secretary Matt Shuckerow also confirmed that the governor will not veto the entire operating budget as a means to force the Legislature into agreement on a Permanent Fund dividend amount this year.

“It’s safe to say that he is not going to do a complete veto of the operating budget,” Shuckerow said.

That said, the governor will take advantage of his power to eliminate specific items within the operating budget.

“It’s very safe to say that the governor will be exercising his constitutional authority and looking for additional savings,” he said.

Those vetoes are likely to stand up, said Speaker of the House Bryce Edgmon, I-Dillingham, during a Thursday interview.

“If the governor vetoes the budget back to the neighborhood of the legislation we got on Feb. 13, I think that’s going to cause great concern. That could change the landscape, which at the point does not seem to favor the 45-vote threshold,” he said.

The Alaska Constitution requires 45 of Alaska’s 60 lawmakers to agree in order to override a line-item budget veto. With the 15-member Republican House minority largely in favor of the governor’s actions, and several Republican senators also generally supportive, a veto override is unlikely.

That leaves a big question: What will the governor veto?

While the state has more than enough revenue to pay for government services, it does not have enough to both pay for those services and pay a traditional Permanent Fund dividend, which the governor has said is a priority. To make money available for that dividend, the governor is expected to cut services.

Sen. Bert Stedman, R-Sitka and co-chairman of the Senate Finance Committee, said he would not be surprised if the governor makes additional cuts to the budget of the Department of Health and Social Services. Lawmakers did not accept all of the administration’s suggested cuts to that department.

Cuts to public radio and the Alaska State Council for the Arts are also expected. As a senator, Dunleavy proposed eliminating state support for public radio every year he was in office.

Other possible veto targets include the Alaska Marine Highway System and the University of Alaska. Both were targeted for extensive budget cuts by the governor’s administration earlier this year, but the Legislature rejected most of those cuts.