Governor approves state budget while vetoing funds for school districts and the university

Gov. Mike Dunleavy signed the Fiscal Year 2024 state operating and capital budgets into law but vetoed about $200 million, much of it for schools. Reductions include about $145 million in operating funds and $56 million in state capital projects.

The biggest reduction in education was in the Legislature’s appropriation of $176 million in one-time funding to help school districts deal with seven years of inflationary cost increases. This was cut to $88 million by the governor. Also, $10 million dollars were cut from a major maintenance fund for rural schools, reducing $29 million approved by legislators for major maintenance to about $19 million.

State Sen. Loki Tobin, who chairs the education committee in the Senate, said she was disappointed, but not surprised, at Dunleavy’s cuts. The governor is still working under the perception that school districts don’t need new money because they still show fund balances in their reserves, which they are required to keep, she said.

In reality these funds are mostly already spent although the state’s accounting systems do not yet reflect that, Tobin said. School districts have given their current balances to the Department of Education and Early Development as well as to legislators, but decisions are still being made based on the old information.

Other education cuts included $17.5 million for building system upgrades at the University of Alaska Anchorage along with major maintenance projects like roof replacements and safety code upgrades at the university’s Fairbanks, Juneau and rural campuses. University of Alaska System capital projects will experience reductions of approximately $36.7 million but other initiatives such as roof repairs at the Fairbanks campus, the drone program in Fairbanks and library funds for UAA were retained in the budget.

House Speaker Rep. Cathy Tilton, R-Palmer, said she supports the governor’s decisions. "It is important to adequately fund education and it is equally important to ensure those dollars are being used most effectively in the classroom, I believe the governor’s vetoes reflect that balance and the necessity of fiscal responsibility.

Tobin, however, has a different view. “Due to the Governor’s actions today, our public schools are going to have to make do with substantially less funding than they need to provide for reasonable class sizes and prevent teachers from leaving Alaska for better opportunities elsewhere,” she said.

“Inflation has made it much more expensive to keep the lights on and keep school buildings warm. Unfortunately, the Governor’s line-item veto will further shift that burden to local school districts, and in many cases, local taxpayers.”

Other programs saw cuts but at a smaller scale. A $5 million grant for tourism marketing was reduced to $2.5 million along with a $1 million reduction in support for public radio in rural communities, which are important for emergency communication. However, a $5 million appropriation for an industry and business promotion program proposed by Dunleavy in his December budget and approved by lawmakers, was approved by the governor.

A $5 million appropriation to the Alaska Seafood Marketing Institute, or ASMI, was also approved by the governor. ASMI works mostly with funding from its seafood industry members as well as federal funds. The one-time grant from the state will allow it to develop new foreign market opportunities since Russia’s war in Ukraine and tensions with China have shut off Russia and China as markets.

The governor defended his budget, including line-item vetoes, as representing prudent and fiscally responsible decisions to support public safety and economic development. The vetoes resulted from a thorough evaluation and consistent application of priorities to grow savings and ensure fiscal stability, Dunleavy said in a statement. “This budget is a responsible path for Alaska's financial future. Budgets should reflect the values of Alaskans; the FY24 budget accomplishes that. We continue to invest in public safety, public education, and economic development. While this is a responsible budget for FY24, I look forward to working with lawmakers and Alaskans to establish a long-term, sustainable fiscal plan." The governor said.

Some agencies and programs are seeing increases. From FY2019 to FY 2024, there is an $81 million increase and 187 new positions in the Department of Public Safety; a $75 million increase in support for the Department of Corrections, and a 45 percent increase in criminal prosecution support.

There was also support for education, even as reductions were made. Overall, there was a $65 million increase for the Department of Education that includes money for the new Alaska Reads Act, an increase of $5 million for the Alaska Native Science and Engineering Program at the university, partnership of $5 million; $1.5 million for Career and Technical Education incentive grants; $1.5 million for Teacher Recruitment, Retention, and Certification Support and $1.5 million for Head Start programs to Provide state matching funds to federal Head Start funds.