Governor Mike Dunleavy has officially signed Alaska’s annual budget plan into law, but not without making significant cuts totaling more than $122 million.
These reductions are particularly pronounced in the education sector, where over $50 million was eliminated from the state’s per-student funding formula.
In addition, tens of millions allocated for major school maintenance projects were also vetoed.
Lawmakers and education officials expressed deep concern over the governor’s decision, which has left school districts facing months of financial uncertainty.
Senate President Gary Stevens and Speaker of the House Bryce Edgmon indicated that an override of the veto is unlikely until January at the earliest, intensifying worries among educators.
Jharrett Bryantt, superintendent of the Anchorage School District, described the situation as an “education emergency,” emphasizing the immediate need for districts to find ways to cut costs equivalent to $200 per student.
This marks a historic decision, as it is the first time a governor has not fully funded the education formula in Alaska.
This action draws a parallel to former Governor Bill Walker’s controversial 2016 veto of part of the Permanent Fund dividend, which had previously been regarded as untouchable.
The governor’s office announced the vetoes without a formal news conference, stating responses to media inquiries would be provided at a later date.
Despite these cuts, the overall size of the state budget remains largely unchanged, and the amount vetoed by Dunleavy is less than in previous years.
Rep. Jamie Allard, a member of the House Finance Committee, expressed her desire for more reductions, stating that fewer grants to nonprofits could have been cut instead.
In a prerecorded message released prior to signing the budget, Dunleavy explained that his vetoes stemmed from declining oil prices, which have negatively impacted state revenues.
He indicated that the state’s financial obligations could not be met without reductions in the budget, stressing that these choices were necessary.
It is notable that his decisions were based on a revenue forecast that legislators did not have access to while drafting the budget.
Typically, lawmakers depend on a spring forecast from the Alaska Department of Revenue, which indicated a surplus of approximately $56.5 million.
However, after the vetoes were executed, an updated revenue estimate released by the Department of Revenue revealed a projected decline in oil revenue by $222 million.
This approach to budget adjustments is considered atypical, as Senate President Stevens highlighted the performance expectations tied to oil price fluctuations.
He argued there was no need for such cuts given the balanced budget they had achieved earlier in the session.
The timing of this announcement was peculiar, as it coincided with international events affecting oil prices; just before the veto announcement, Israel had commenced bombing Iran, which led to an increase in oil futures.
Dunleavy’s vetoes on education were anticipated following lawmakers’ efforts to override a previous veto aimed at raising the base student allocation by $700.
The recent veto effectively reduces this year’s increase to $500 per student, which is seen as detrimental by many officials within the education sector.
Stevens voiced that this reduction would have devastating impacts on school districts and students.
Rep. Rebecca Himschoot characterized the funding cuts as “catastrophic,” foreseeing possible school closures in both rural and urban areas.
As budgetary adjustments have to be made swiftly, many school districts face critical decisions in the interim, with hopes that lawmakers will address the governor’s cuts come January.
Rep. Jeremy Bynum pointed out that Dunleavy’s vow to potentially cut education funding was not unexpected, but he acknowledged that the scale of the cuts exceeded his expectations.
In addition to the cuts to the Base Student Allocation, significant funding aimed at diverting resources from transportation projects to school maintenance was also abolished.
This decision was justified by the governor’s office, which claimed that funds earmarked for certain expenses had already been allocated prior to lawmakers’ budget approval.
Lawmakers had also approved nearly $554,000 for a teacher incentive grant program, which was subsequently vetoed by Dunleavy.
Rep. Andy Josephson expressed his disappointment with the governor’s cuts to education, urging him to demonstrate his commitment to educational advancement.
Furthermore, the governor’s vetoes also affected other areas outside of education.
Lawmakers previously had planned to draw $200 million from the state’s higher education investment fund and resources from the Alaska Industrial Development and Export Authority for essential state operations like maintenance and repairs.
However, Dunleavy vetoed the $100 million allocation from AIDEA, necessitating that all funds now come from the higher education investment fund.
While Stevens maintained that the plan is to replenish the higher education fund next January, he conveyed concerns regarding other vetoes, including the $5 million appropriation for the Alaska Seafood Marketing Institute.
This organization plays a crucial role in promoting Alaska fishers in international markets.
Additional minor vetoes included cuts for disaster relief, childcare grants, and funds supporting infant learning and mental health initiatives.
Comments from elected officials reflect a general discontent with the implications of these vetoes, anticipating adverse effects across the state.
With lawmakers not scheduled to revisit these vetoes until January, both education officials and local governments brace themselves for the potential outcomes of the governor’s budgetary decisions.
Although an attempt to reverse some of these cuts may be on the horizon, the uncertainty created by Dunleavy’s actions leaves many in Alaska wondering how they will adapt to this new financial landscape.
image source from：https://www.governing.com/finance/alaska-gov-slashes-millions-from-education-funding
