Latest departure part of major shakeup in the governor’s office

Gov. Mike Dunleavy is cleaning house.

Donna Arduin’s departure as state budget director, following Tuckerman Babcock’s removal as Chief of Staff, signals a major shakeup in the Alaska governor’s office after a rough first eight months for the new governor. However, while the names may change Dunleavy’s goals of leaner government are likely to remain.

“Alaskans are happy Donna Arduin is gone,” said Rep. Chris Tuck, D-Anch. “She has learned that Alaskans are a lot tighter community than she is used to, quick to rally and expose what she is,” a promoter of a harsh conservative and libertarian budget cutting-regimen imported from other states where Arduin has worked.

The changes will allow Dunleavy to be more in charge, Tuck said. Ben Stevens, the new Chief of Staff, is conservative but more a traditional Republican.

Dunleavy’s overall goal of leaner government won’t change, sources in the state capitol building said, but Stevens, a former Senate President, will have better relations with the Legislature and could be more effective in carrying out Dunlevy’s vision.

House and Senate leaders declined to comment on Arduin’s departure. She has been offered a policy advisory position, which has not yet been accepted, but this is seen as a way station en route to the exit door. Babcock’s departure followed a similar path, first a temporary policy job and then a “retirement.”

Some lawmakers, speaking off the record, were delighted Arduin is gone at OMB because it signals a likely shift from her strict policy of not allowing commissioners to defend their agency budgets, or even to provide information, in legislative budget hearings. Only she, or OMB staff following carefully-worded scripts, could speak to legislators.

“The budget cuts she proposed were huge and there was never any discussion of their justification other than ‘we have a deficit’ and as to impacts of the cuts, all she would say is not our problem,” one lawmaker said. Commissioners were not asked for advice by Arduin as she prepared Dunleavy’s first budget last spring.

Arduin, Babcock and Jeremy Price, the Alaska chapter director of the conservative “Prosperity for America” group, were the architects of Dunleavy’s harsh budget cuts.

The governor ultimately backed away from some of the most drastic reductions, such as mothballing the state ferries for the winter and a 41 percent reduction of state funds for the University of Alaska. Dunleavy compromised and allowed limited winter ferry service and agreed to the university reduction being spread over three years.

Babcock and Arduin are gone, leaving only Price in a policy advisory job in the governor’s office. Lois Kramer, a veteran finance staff person in the Legislature and Deputy OMB director, is acting budget director until Dunleavy names a permanent replacement. That will come soon, sources indicate, because agencies are now finalizing their budgets for the next state fiscal year, which the governor must release Dec. 15.

Anna MacKinnon, former Republican state senator from Eagle River, is being spoken of as a possible replacement for Arduin. The prospect delights legislators who were bruised by budget fights earlier this year.

“Anna understands the Legislature and would be a calming influence,” said one lawmaker. Although a conservative, it isn’t clear whether she will come out of retirement to fight for Dunleavy’s agenda, however. MacKinnon has not commented on the reports.

While some are celebrating Arduin’s departure, some veterans in the capital building said that her tenure was expected to be short anyway. “She was brought in to do a job, and she did it, shaking up the system,” one person said.

Despite the rough and tumble through the spring, many legislators credit Dunleavy for having caused a serious public discussion of the budget. “Former Governor Walker wanted to downsize the budget too but he could never get the public’s attention focused. Dunleavy has accomplished that,” one legislator said.

Still, the proof of whether the governor has really changed course and backed off from draconian budget cuts will come Dec. 15, when the new budget is released. Arduin had issued instructions for agencies to cut their budgets by 15 percent but it’s uncertain whether that will actually wind up in Dunleavy’s Fiscal Year 2021 budget.