Senior Policy Analyst
Alaska’s legislature is convening this week to debate whether to override Governor Mike Dunleavy’s vetoes of more than $400 million (about 10 percent of state spending) from the budget — 85 percent of which comes from education, public safety, and programs that serve low-income Alaskans. These cuts would pull Alaska’s economy into a recession, the state’s economists warned, and inflict great hardship on low-income Alaskans at a time when the state already has the nation’s highest unemployment rate.
Dunleavy’s veto of $130 million in state university funding (about 40 percent of what the system gets from the state) has received the lion’s share of attention. It would force the system to close some campuses that serve parts of the state with smaller populations, cut personnel, and lower enrollment, according to university officials.
But the governor’s vetoes would also make large, harmful cuts to health care, housing, and other basic assistance programs.
Dunleavy says the budget vetoes are necessary to help close a budget deficit. But the state has far better ways to address its fiscal challenge and build for its future. The state has no income tax and 80 percent of its revenue comes from oil taxes. Oil production in the state is at historic lows (and is expected to remain flat in the coming years) and world oil prices are low as well. That means the state will find it increasingly hard to fund government services without additional sources of revenue.
Alaska policymakers should restore the funds the governor vetoed and look for ways to raise the necessary revenues to invest in schools, health care, and infrastructure to promote long-term and broad-based prosperity and economic growth.