Gov. Mike Dunleavy

Gov. Mike Dunleavy, seen here during a press conference at Wasilla Middle School, announced his state budget vetoes June 28.

Gov. Mike Dunleavy will sign a new state budget bill passed by the Legislature on Monday, Aug, 19, also indicating parts of the bill he will veto. The governor was originally expected to sign the bill Friday, but this was delayed.

House Bill 2001, passed by the House and Senate in the recent special session, restored most of the spending reductions made earlier by the governor’s veto of items in the state budget approved during the regular 2019 legislative session. Dunleavy is expected to veto funds again but in recent days has indicated that he will ease up on some reductions.

On Friday, Aug. 16 the governor announced he will restore certain education funding cuts. Previously he said he would back off on sharp reductions to the University of Alaska budget, senior citizen benefits and certain education programs. The final tally of cuts will be known when the budget bill is signed Monday.

HB 2001 also authorizes a Permanent Fund Dividend of $1,600, which is lower than the $3,000 PFD the governor had pushed for. Legislative leaders have asked for another special session late this year to consider changing the formula under which the PFD is calculated.

Dunleavy may have to call the special session as he did earlier this year because it is uncertain that the Legislature can muster the 40 votes out of 60 members in the House and Senate for the Legislature to call itself into special session. If he initiates the call for another special session the governor might add the PFD amount on the agenda, giving him another chance for a $3,000 dividend. If it happens, this would have to be paid as a supplemental payment because the regular PFD, likely $1,600, would have already gone out.

On Friday the governor restored a $670,000 reduction to the OWL program, or Online with Libraries. This provides state funds that together with federal and local funds builds capacity in public libraries around the state to support broadband internet services and supply videoconferencing capability. Thie program also helps students who need access to computers after school hours by having access at public libraries.

Dunleavy also said he will not veto $138,200 for Live Homework Help, which provides online tutoring services to help students better in courses and help them prepare applications for Alaska Performance Scholarships.

“Like funds restored earlier in the week for Head Start, Early Childhood Grants and other early learning programs, these decision were made after significant input from Alaskans,” said Dunleavy. “While we hoped to have these issues cleared up months ago, it’s important we announce these items now before the start of the school year.”

While it’s unknown just what the governor will veto Monday he is widely expected to once again to veto 50 percent of the state school debt reimbursements for municipalities who sold school construction bonds in years when the state was offering to pick up 50 percent to 70 percent of the bond debt service. At its regular funding level the program would have paid $19 million of the Matanuska-Susitna Borough’s $26 million due in debt service on outstanding bonds. Previously the governor had vetoed half of that, passing about $9 million in added costs to the borough.

The Legislature restored it to $19 million, or the original amount, in HB 2001. If the governor again vetoes funds to 50 percent of that it would return the $9 million in extra costs to the Mat-Su Borough. Mat-Su officials say they can absorb that this year by having made budget cuts elsewhere in the budget and using some reserve funds but if the $9 million is again cut next year, in Fiscal 2021, there may have to be increases in property taxes.

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