Governor releases 2021 budget

WASIILA — Gov. Mike Dunleavy announced his Fiscal Year 2021 budget at a press conference on Wednesday afternoon. Dunleavy continued to say that the budget is a process that needs the input of the legislature and Alaskans and that robust, vigorous discussions that linger from his 2020 budget release in February need to continue.

“We have to work together to form a budget that’s going to make sense for all of Alaskans,” Dunleavy said. “We believe that we should engage the people of Alaska.”

In similar fashion to the budget roadshow that occurred following the 2020 budget release, Dunleavy said that in January he will begin visiting Alaskan communities to discuss the budget around the state. Dunleavy stressed the themes of enforcing fiscal discipline with no overall budget increases, honoring the law of the Permanent Fund Dividend and providing a truthful budget process to Alaskans.

“Last year we rolled out the budget with the $1.6 billion in reductions. We had a conversation with the legislature. The legislature themselves saw the need for reductions. They agreed to several hundred million dollars in reductions. We vetoed further, we reduced further because we believed that the gap was just way too large. This summer, this fall we’ve had time to work with our commissioners, work with the people in the various departments, talk with folks across Alaska, talk with groups that are recipients of our spending and our services and our programs and so we put together a budget this year that reflects those discussions,” Dunleavy said.

Dunleavy spoke for 12 minutes before leaving the press conference for a meeting. Dunleavy’s commissioners answered the remaining questions from media members in the room and on the phone. When asked what meeting Dunleavy needed to attend that was more important than the state’s budget rollout, Deputy Communications Director Jeff Turner said Dunleavy had another obligation. When Dunleavy focused on formula driven programs, noting that over half of the budget is driven by such programs and highlighted that the $1.3 billion capital budget with $143 million in Unrestricted General Fund as that state portion that is designed to maximize federal funding. The 2021 budget draws $1.5 billion from the Constitutional Budget Reserve leaving a $540 million balance.

“We no longer can rely on savings. We’re drawing down on our savings and we know that our approach the last year was to reduce the size of government. Our approach this year was to absorb the $160 million that would’ve been growth within the budget through efficiencies. We’ll continue to look at efficiencies and keep the government as tight and small as we possibly can,” Dunelavy said.

Dunleavy’s budget includes $4.39 billion in general fund spending, looking at the long term fiscal outlook focused around formula programs. Dunleavy’s commissioners answered specific questions on department funding, stressing that changes to formula based programs would coincide with constitutional amendment discussions that began with Dunleavy’s 2020 budget proposal. Continued budget discussions by Alaskans and the legislature that will convene next year will ultimately define the final numbers on the budget, and Dunleavy’s budget serves as a springboard for those continuing discussions.

“What do they want Alaska to look like going forward. What kind of programs do they want. What kind of services do they want and how are we going to go about paying for those services,” Dunleavy asked.

Prior to exiting the press conference, Dunleavy said that no cuts to education funding would be featured in his 2021 budget. With an increasingly crowded Alaskan prison population, Department of Corrections Commissioner Nancy Dahlstrom addressed increases to DOC funding.

“We have a $24 million increase and that is specifically for population management, reducing recidivism and our ongoing recruitment efforts,” Dahlstrom said.

Department of Administration Commissioner Kelly Tshibaka focused on efficiencies and effectiveness within the budget process, answering a question about moving positions to Anchorage from Juneau to reduce travel by stating that the mission is to continue to increase efficiencies and effectiveness within government.

“W’ere not focusing on input of money. We’re focusing on output of results across the board,” Tshibaka said.

Among other programs to receive additional funding was the Department of Health and Social Services with DHSS Commissioner Adam Crum discussing increases to Pioneer Home funding for seniors.

“We are still going to have these rate increases in place but now we’re getting a realistic picture of those who are living in the homes. It should be noted that we have as robust a waiting list as ever for individuals to get into the Pioneer homes,” Crum said.

Questions about if the introduction of taxes would be put on the table were met with answers about the continuing process of the legislature’s appropriation of the budget funding. ‘

“There’s a robust conversation that needs to be had with the legislature and all of Alaskans again about what we want to be as a state, what we want to provide and how we want to pay for it. I think the Governor is open to all conversations with legislature and the public and we’re looking forward to having them,” Senior Policy Advisor Brett Huber said. “The Governor trusts Alaskans and trusts the legislature to have this discussion to have this input. We’ve not identified a single source. We’ve not identified a single answer. It’s the Governor’s job to help lead us through this discussion.”