Alaska governor reverses course on controversial budget cuts
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[August 20, 2019]
By Yereth Rosen
ANCHORAGE, Alaska (Reuters) - Alaska's
governor signed a budget bill on Monday rolling back most of the deep,
highly controversial spending cuts he imposed weeks ago on the
University of Alaska but rebuffed a renewed bid by lawmakers to restore
funding he slashed from health programs.
The partial funding restoration marked the latest in a pitched budget
battle between Governor Mike Dunleavy, a Republican serving his first
year in office, and a bipartisan coalition in the Republican-dominated
Dunleavy, who sought to slash state spending while seeking a record hike
in an oil-revenue dividend paid to state residents each year, said on
Monday he reversed course on higher education and some other programs
due to public sentiment.
"I understand that this budget approach and timing, being so late in the
legislative year, caused significant angst among Alaskans," Dunleavy
said in a video statement. "However, certain programs, programs we
value, got caught in a budget discussion that went on way too long."
A highlight of the revised budget bill signed by Dunleavy limited cuts
to the University of Alaska to $25 million in the current fiscal year,
compared with the $130 million line-item veto he announced on June 28.
The earlier reduction amounted to about 40% of the university's budget.
University regents declared "financial exigency" in July, a
bankruptcy-like status that allows for swift cost reductions, including
dismissal of tenured faculty and closure of entire programs and
Lawmakers tried to override the university cut and other line-item
vetoes last month but they fell short of the three-quarters majority
needed to do so. Instead, they passed entirely new budget bills that
restored most of the items the governor vetoed out, including the
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In signing the new operating budget, Dunleavy backtracked on a few
additional line-item vetoes aside from university funding. However,
he repeated earlier vetoes that slashed other parts of the new
budget, especially Medicaid and other health programs.
Dunleavy has argued that deep cuts are needed to pay for a big
annual dividend from the Alaska Permanent Fund, the state’s
He has pushed for a dividend of about $3,000, which would have been
the highest since payouts began in 1982. Alaska has no income tax
and has long been reliant on oil revenues.
The legislature's new budget set this year's dividend at $1,600, the
same as it was in 2018. Dunleavy criticized that as an "incomplete
dividend" but let it stand, citing his inability to add money to the
Dunleavy's budget decisions and other policies and actions have
spurred a backlash. A campaign to oust him from office is gathering
signatures for an official recall election.
(Reporting by Yereth Rosen; Editing by Steve Gorman and Paul Tait)
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