Alaska Legislature

Sen. Murkowski urges lawmakers to carefully consider cuts to protect federal support

Alaska’s senior senator on Friday recommended that state legislators meeting in a special session in Juneau keep in mind the big picture as they consider the governor’s $444 million in vetoes and consider completing a capital budget tied to nearly $1 billion in federal funds.

Sen. Lisa Murkowski said lawmakers should look for ways to “soften the impacts” of any reductions and take measured steps that maximize federal matching funds for transportation, Medicaid, the University of Alaska and other programs.

“I think it is fair to say that not all cuts of state dollars are equal because of what they may be able to leverage for other federal resources (and) grants,” said Murkowski, speaking with reporters following a civic group’s luncheon in Anchorage.

She said she’s “very fearful” about what may happen to the University of Alaska system, facing an unprecedented $130 million veto, atop a $5 million cut by the Legislature.

[Legislators: Fixing budget and dividend likely requires ‘full package’ of compromise]

Alaskans and lawmakers have feuded sharply over the size of the budget and the Alaska Permanent Fund dividend, after Gov. Mike Dunleavy’s vetoes last month threatened to reduce or eliminate a wide swath of services.

A bill in the House seeks to restore the funding cut by the vetoes, and would pay an annual dividend to Alaskans smaller than the $3,000 payment the governor supports. The governor has called lawmakers back into special session in Juneau, where they must complete the unfinished capital budget by the end of the month or risk losing more than $900 million in federal matching funds for road and airport construction.


Murkowski said she’s been struck by the intensity of the debate playing out in Alaska.

“It has been a challenge as an Alaskan to see how divided we have become over the amount of a dividend,” she said. “It’s probably been a conversation that has been a long, long time in coming, but it’s been very painful to see the anxiety that we feel and the concerns in families.”

Murkowski said it’s not her role to tell state lawmakers how to do their job. But it is important to explain what may be lost at the federal level. She said she stays in touch with state lawmakers on that and other topics.

She’s been focused in D.C. on looking at “those state-match issues” to help make sure everyone understands how much is at stake if federal matching funds are lost, she said.

The timing of how cuts are made is important to understand, she said.

“It may be that you are able to roll some of these state budget reductions out over longer period of time that won’t impact your ability to leverage those federal funds," she said.

“You really have to map it out,” she said.

“Budget reductions, yes, but making sure there is an implementation that is smart is important,” she said.

High-profile areas that could lose significant federal support, such as Medicaid or in transportation, are just some areas of concern, she said. The governor has vetoed $50 million in Medicaid services, which is expected to result in at least another $50 million loss in federal funds. That comes atop a $70 million cut by the Legislature.

Lawmakers should also understand overall impacts to smaller programs, too, she said.

“With early childhood education (programs), Head Start, there are also federal dollars at play there," Murkowski said.

[A partial list of Gov. Dunleavy’s line-item vetoes]

How the cuts might impact federal support for the university is something she’s wary of, she said.

“The research that is going on at the University of Alaska, when it comes to the Arctic, when it comes to climate, when it comes to better understanding some of the implications of the environment, we are doing some pretty great stuff up there,” she said.

“I want to make sure that our university system is good and sound and strong,” she said. “I want to make sure those federal dollars that are able to come to the university because of the research, because of the name we have built in the space, I don’t want to see them eroded. I don’t want to see that research go away."

“It is again, important to understand how these budget reductions will (have an) impact and is there a way to arrive at the same place, which is having tighter reins on your government spending, but allowing us as Alaskans an opportunity to have healthy people, educated people and a strong economy,” she said.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or