Gov. Dunleavy trims $220 million from state’s FY 2020 budget through vetoes

By Tim Bradner

Alaska Legislative Digest

Through line-item vetoes to HB 2001 made Aug. 19 when he signed the current year state budget, Gov. Mike Dunleavy reduced spending in the FY 2021 state budget by $220 million, offsetting part of the $375 million added to the budget by the Legislature in the FY 2020 (current year) budget. With these vetoes, the FY 2020 operating and mental health budget, including previously enacted legislation, now totals $4.193 billion in Unrestricted General funds (UGF), $883.6 million Designated General funds (DGF), $702.1 million Other State funds, and $2.7 billion Federal funds according to an analysis by the governor’s office.

Key programs and services vetoed in HB 2001:

• Public Broadcasting: $2.716 million cut  

Note: Emergency broadcasting and satellite service to rural communities will remain

• Dept. of Environmental Conservation: $3.42 million cut

Note: This mainly “program receipts” in the Dept. of Environmental Conservation budget for the Ocean Ranger program to monitor cruise ship pollution. The program is paid for by passenger fees, and the state actually earns more than is spent. The passenger fees will remain but will be spent for other purposes, as yet undefined

• Medicaid: $50 million cut

Note: This is a $50 million reduction of state funds for Medicaid. How the department will deal with this is unknown. Since Medicaid services to low-income Alaskans are federally-mandated unless the state receives a waiver, program costs will continue to be paid. There is likely to be a Medicaid supplemental budget request in the 2020 session

• Behavioral Health Treatment and Recovery Grants: $6.1 million cut

Note: The state administration points out that since 2015 state funds for behavioral health treatment and grants have increased by approximately $58 million due to changes in Medicaid and improved access by providers to Medicaid

• Adult Public Assistance: $7.47 million cut

Note:  Payments will be reduced beginning Jan. 1. Access by recipients to the Supplemental Nutrition Assistance Program (SNAP), or food stamps, will be enhanced

• Nome Youth Detention and Treatment: $2 million cut 

Note: The administration claims the facility is underused. Youths now being served can be relocated to secure facilities in Fairbanks, Anchorage, Bethel or Juneau

• Medicaid adult enhanced dental: $27 million cut

Note: Limited emergency dental services will be offered for Medicaid recipients after Oct. 1. Routine dental services will be offered through nonprofit health centers

• Village Public Safety Officer (VSOP) program: $3 million cut

Note: The administration claims that new federal money is now going to tribes and the state Dept. of Public Safety to enhance security in rural communities

• Alaska Community Assistance Fund: $30 million cut

Note: This was an appropriation to further capitalize the Alaska Community Assistance Fund which the administration claims is not needed. It will not affect a $30 million distribution in FY 2020. However, with reduced capitalization the FY 2021 community assistance payments will be reduced by one third

• Lesser amounts were vetoed from appropriations for rural airport maintenance ($46,000); the Alaska Marine Highway System ($5 million)

Key programs and services restored in HB 2001:

• $21.5 million to Senior Benefits Program
• $110.25 million to the University of Alaska
• $8.8 million to Early Learning Programs, including Head Start, Early Childhood Grants, Parents as Teachers, and Best Beginning
• $759,100 to Alaska Legal Services Corporation
• $809,100 to Online with Libraries and Live Homework Help
• $3.8 million to Alaska State Council on the Arts
• $100,000 to Office of Veterans Affairs for an additional Veterans’ Services Officer
• $2.2 million to Human Services Matching Grants and Community Initiative Grants
• $533,500 to reopening the Utqiagvik Law Office
• $2.7 million to Agricultural Programs*

* Much of the agricultural program restoration is in program receipt authority, for examples where farmers pay for state crop inspections needed to sell farm products to major grocery chains. The program receipt authority had been vetoed earlier but was restored after farmers in the Mat-Su valley complained