Alaska Gov. Mike Dunleavy speaks during a news conference on Friday, March 15, 2024. (Photo by James Brooks/Alaska Beacon)
Alaska Gov. Mike Dunleavy signed the state budget into law on Friday, while vetoing more than $230 million in operating and capital spending.
The total operating budget funding state agencies is $12.2 billion, including $914 million for Permanent Fund dividends, while the capital budget, money designated to build and repair roads, buildings and other infrastructure projects, is $3.5 billion. The share of spending from the Permanent Fund, oil royalties and taxes was $5.9 billion for the operating budget and $250 million for the capital budget, with most of the rest covered by federal money.
In a news release, Dunleavy noted the power given the governor in the state constitution to veto individual line items.
“The framers of Alaska’s Constitution codified a strong chief executive to ensure responsible budgeting,” he said. “This budget reflects their intentions.”
The Permanent Fund dividends this fall will be approximately $1,718 per resident, according to the governor’s office, slightly higher than the Legislature’s estimate of $1,655.
Dunleavy did not veto any of a $175 million one-time increase in school funding after vetoing half of a similar increase last year.
The decision drew praise from leaders of the Anchorage School District, who said in a statement that they are “grateful for the Alaska State Legislature making education funding a priority this past legislative session. Today’s approval by the Governor of this one-time investment is much-needed, however, school districts are also in dire need of a long-term solution.”
The largest veto was $20 million to replenish the Community Assistance Fund, which aids municipalities with their budgets. Other vetoes included $11.9 million to fulfill a payment required by the federal government to school districts that the state is disputing; $11.2 million to assist schools with broadband, roughly a third of what the Legislature budgeted; $10 million for ferry operations, which the governor’s office said would be reevaluated after the ferry system receives federal grant money; and $10 million for seafood marketing. Smaller vetoes included $1.2 million for rural public radio stations.
The announcement of the budget signing highlighted several areas increased in the spending plan, including $87.5 million for university operations and maintenance deferred from previous years; $62.8 million for major school maintenance; $53.2 million for Alaska Housing Finance Corp. programs for home buyers, owners and renters; and $3.5 million for 10 additional village public safety officers and VPSO salary increases.
The constitution requires that the governor provide an explicit reason for his budget vetoes. For most, Dunleavy said they were to “preserve general funds for fiscal stability.” If the state spends less than it raises, that money will be deposited into the Constitutional Budget Reserve, a fund that was depleted over the past decade to balance the budget.
Education cuts
While Dunleavy’s veto pen did not touch the one-time increase to education, which equals $680 per student in the state’s funding formula, he did reduce funding for high speed internet for rural schools and cut a boost to the state’s Head Start programs in half.
Dunleavy also vetoed $5.4 million of $20 million slated to increase the graduate program at University of Alaska Fairbanks so that it can achieve a status as a top-tier research university. The sum was the state’s general fund contribution — he did not veto the remainder of the money, which would be paid for by the university’s federal funding and money it raises from other sources.
The University of Alaska praised his approval of a $331.3 million state appropriation. Combined with other sources, the state university’s operating budget for the next year is just under $934.5 million.
Senior reporter Claire Stremple contributed to this article.
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