Clash over deep spending cuts faces another round in Alaska

[July 11, 2019]  By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - Alaska's governor won a showdown on Wednesday with lawmakers trying to reverse his bid to slash spending on higher education by 40%, but opponents vowed to keep fighting the unprecedented cut, which university officials have warned would wreak havoc.

Republican Mike Dunleavy, in his first year as governor, wants deep cuts in education and other programs to help pay for his chief campaign promise - a sharp increase in the annual oil revenue dividend Alaska pays to each resident.

A group of nearly 40 Democrats, Republicans and independents that forms a controlling coalition in the Republican-majority legislature sought to block the cuts, which Dunleavy pushed through last month, using dozens of line-item vetoes.

But the coalition fell eight votes shy of the 45 needed to override him - a figure representing a three-quarters majority of the 60 members of the Senate and House of Representatives combined.

Twenty-two Republicans backing Dunleavy stayed away from the joint legislative session in the capital, Juneau, going instead to his hometown of Wasilla, where he had sought unsuccessfully to hold the special session in a school cafeteria.

The final tally in Juneau was 37-1 for an override.

Legislative leaders said they would try to bring the matter back for a second vote on Thursday, hoping to persuade some holdouts to join their cause before Friday's deadline to act.

"We're not done fighting," House Speaker Bryce Edgmon, a political independent, told a news conference late on Wednesday.

"There should be further opportunities to ... consider to a fuller extent the impact of the vetoes, and what we might do to roll some of those, if not a good many, back."

Dunleavy says his cuts are needed to rein in spending and cope with a long-term decline in Alaska's oil industry receipts that is undermining its economy, even as he proposed nearly doubling the oil revenue dividend to a record $3,000 a year.

Downtown Anchorage sits on a coastal plane between Cook Inlet and the Chugach Mountains, in Alaska, June 24, 2015. REUTERS/Mark Meyer/File Photo

Critics say the cuts, totaling about $440 million, are so harsh they will worsen the state's economic slump.

"I cannot fathom why the governor is purposely throwing Alaska into a severe economic recession," Republican state Senator Natasha von Imhof said before Wednesday's vote.

Edgmon suggested the governor and his staff failed to fully grasp the impact of the cuts.

Especially hard-hit would be the University of Alaska system, accounting for $130 million of the vetoes, or the equivalent of the budget for one of its three main campuses at Anchorage, Fairbanks and Juneau.

University regents will meet on Monday to consider a declaration of "financial exigency," allowing swift shutdowns of programs, dismissal of tenured faculty and other major cutbacks, President Jim Johnsen said.

Dunleavy, a former teacher and outspoken supporter of U.S. President Donald Trump, has said he believed the university was resilient and would emerge healthier.

His cuts also target the state's Medicaid program, social services, law enforcement and services for the poor and elderly, among others.

(Reporting by Yereth Rosen in Anchorage; Writing by Steve Gorman; Editing by Lisa Shumaker and Clarence Fernandez)

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