Uncertainty is bad for business

Governor Dunleavy’s proposal to gut Alaska’s Medicaid program has already hurt Alaska’s economy, and is stalling private sector investments while putting hundreds of jobs at risk.

The Dunleavy budget has stalled a $14.5 million project by Mat-Su Regional Hospital to expand emergency treatment facilities, and a $4.5 million project, also by Mat-Su Regional Hospital, for new inpatient psychiatric beds. Alaska Regional Hospital has suspended an $8 million project for a 24 bed behavioral health unit. Particularly at a time when Alaska is struggling with epidemic levels of mental health issues, these projects not only would have created Alaskan jobs, they also would help to accommodate Alaska’s epidemic levels of mental illness.

Leaders from Alaska’s health care industry have warned that the Dunleavy budget endangers jobs. Becky Hultberg, the President of the Alaska State Hospital and Nursing Home Association said that the Dunleavy’s budget plan is “not well thought out, realistic or achievable,” and that “it is simply a blunt instrument developed in response to the mathematical exercise required by the Office of Management and Budget.” Victor Joseph, the Chief Chairman of the Tanana Chiefs Council said that if the budget as proposed is passed, it would take his organization “years to recover.”

Over the last few years, one of Alaska’s strongest industries has consistently been health care. Despite the lack of fiscal stability and low oil prices, health care providers have continued to grow their businesses and create Alaskan jobs. But even an industry as durable as the health care industry has a point in which they start to think twice about investing further, and we seem to have found that point after the Dunleavy Administration released its budget in January, which cut the State’s Medicaid program by about $250 million. Cutting State funding would lead to a forfeiture of $465 million in federal funds, pulling a grand total of $714 million from Alaska’s health care system. And all that is before you consider the effect that upending Alaska’s health care system could have on public safety across the state. Throughout time and across countries, evidence shows again and again that healthier communities are safer communities.

Business leaders from other industries across Alaska have also expressed their concern. At a House Finance Committee hearing, Northrim Bank’s CEO Joe Schierhorn voiced his concern at the budget’s “magnitude of cuts to education, health and human services and transportation.” Bill Popp, the CEO of the Anchorage Economic Development Corporation said in an interview that the AEDC board, composed of leaders from a broad cross-section of businesses around Anchorage, does not support the Governor’s budget.

Providing access to health care isn’t just morally right, it’s also good for business. According to the Alaska State Hospital and Nursing Home Association, Alaska is currently covering 79,000 more health care enrollees while spending 11% fewer State dollars than it did 4 years ago. Medicaid expansion has been a great deal for Alaska, and tearing that money out of Alaska’s economy is not just cruel to the thousands of families that rely on it, but also foolish for the uncertainty it creates in Alaska’s health care community. It would be an ironic twist if an Administration that entered office promising “Alaska is open for business,” and promising to unleash the private sector, ended up creating so much uncertainty that it destroyed businesses’ abilities to invest with confidence and sent our best and brightest looking elsewhere for jobs and opportunity.

Rep. Zack Fields (D-Anchorage) represents District 20.