Alaska State Capitol Building Photo by Jay Galvin via Wikimedia Commons

After months of back-and-forth with state officials over Alaska’s FY20 operating budget, Gov. Mike Dunleavy relented on a plan to cut funds for the University of Alaska (UA) by 41 percent. Rather than a one-year, $135 million cut, the university will see state funding cut by $70 million over the next three years—$25 million this year and $45 across the following two.

However, these cuts still spell hardship for UA and its statewide library consortium. And the Republican governor’s drastic slashing of other budget areas still threatens a number of other state services, including public library broadband access and the Live Homework Help program, as well as mental health, K–12 education, state Medicaid, services for the poor and elderly, child care, law enforcement, and transportation funding. Dunleavy’s line item vetoes to an already-contracted budget have alarmed policymakers and program administrators statewide, and state legislators have spent the summer working to counter the governor’s cuts.

CUTS TO PAY FOR CAMPAIGN PROMISE

On June 10, the Alaska legislature passed the smallest state operating budget in 15 years by a combined vote of 42–15; its $190 million in cuts to the previous year’s budget—including a $5 million cut to UA’s state support, or 1.5 percent of its FY19 funding—would have resulted in a total $600 million surplus for state coffers. But on June 28, Dunleavy proceeded to issue 182 line-item vetoes to the budget as passed, adding additional $444 million in reductions.

These included a $130 million cut to UA, which also administers a statewide, multi-type library consortium, and eliminating all funding to both the Alaska Online With Libraries (OWL) program that provides internet access to nearly 100 rural libraries across the state, and Live Homework Help, a remote tutoring and resource program for students across the state, as of June 30. The 41 percent cut to the university system alone was equivalent to the budget for one of its three main campuses.

Dunleavy’s drive to tighten the state’s belt stems largely from a promise made during his run for office in 2018 to issue the largest Permanent Fund Dividend (PFD) in the fund’s history. Since 1982, every adult or child who has lived in Alaska for at least a full calendar year receives a PFD check drawn from the Alaska Permanent Fund—a state-owned investment fund derived from oil revenues, as Alaska has no income or sales tax. Resident dividends have fluctuated from a low of $331.29 in 1984 to 2015’s $2,072 (in 2008, each resident received $2,069 plus an additional $1,200 Alaska Resource Rebate), but as part of his gubernatorial platform, Dunleavy promised a $3,000 PDF check for every Alaskan.

The extra dividend money would benefit Alaskans in the short run, but the governor’s budget cuts will have severe consequences across the state, particularly in the most remote towns. "The problem is, in his campaign he didn't really explain very much about the details of how he was going to fund that $3,000 check, and now people are seeing what's happening,” Steve Rollins, dean of the Consortium Library at UA Anchorage, told LJ. Dunleavy’s budget cuts take funding from state services ranging from ferry service to the arts council.

In some libraries, internet access will not be affected. However, in many smaller, rural communities, the OWL program provides libraries’ sole reliable connectivity—and is often the only digital access residents have. In Port Lions, on Kodiak Island, for example, the state’s contribution through OWL was nearly $7,000—more than a community of fewer than 200 people can easily make up through fundraising. Many small communities not only won’t be able to participate in the videoconferencing that OWL made possible, but will have no internet connection at all. While the Institute of Museum and Library Services (IMLS) and eRate provide a piece of the state’s internet funding, connectivity costs in Alaska are high and OWL bridges the often significant gap between federal funding and what small and rural libraries can afford.

"Live Homework Help provides after school homework help all the way up until midnight Alaska time…for students in kindergarten through college across the state,” said Alaska Library Association president Robert Barr. “That program, when you look at how much it costs on a teacher-hour-per-student basis, is far less expensive than what we pay our teachers to work with students.… That program is pretty critical from an education point of view."

Cuts to these public programs are still pending until Dunleavy signs off on the final version of the budget, although it is generally supposed that their funding will not be restored.

FINANCIAL EXIGENCY

The UA system, made up of three separately accredited universities on 19 campuses, serves nearly 30,000 full- and part-time students. The university also administers the Alaska Library Catalog, a free consortium of 87 public, academic, special, and K–12 libraries, as well as the state library, the Anchorage Museum, and the medical library at UA Anchorage. The Alaska Library Catalog links libraries across the state, provides databases through the Statewide Library Electronic Doorway (SLED), and offers interlibrary loan by courier and mail. Although the governor’s budget vetoes would not have shut down the consortium, it would have damaged the infrastructure, including forcing the system to cut one or more of its three full-time administrative positions.

“The library system at all three university campuses heavily supports library activity statewide,” Barr told LJ. “We have databases that, regardless of where you live or what community you live in, you can access. About 90 percent of the population is covered under one library catalog. There's nothing in the veto packages that would directly threaten that consortium. But a 140 million dollar cut to the university system would have huge rolldown effects to the libraries.”

The university has weathered six years of continuous budget reductions. The difference between those and Dunleavy’s precipitous cuts, said Rollins, was that they were gradual and could be planned around. He compared it to the difference between a plane making an emergency landing and crashing. The governor’s original 41 percent budget cut came without warning, with only one month to plan before the start of the academic year.

On July 22, the UA Board of Regents voted 10–1 to declare financial exigency, which would have allowed the system to downsize quickly if needed—closing programs, laying off tenured faculty, and possibly shutting down some of its campuses or consolidating the system into a single accredited university, which would make programs inaccessible to its more far-flung students. At the same time, legislators were working to roll back Dunleavy’s vetoes or, failing that, to introduce measures that would restore some of UA’s funding. Their efforts offered state officials hope, but also contributed to what Rollins referred to as “this roller coaster ride.” (The Board of Regents is expected to revoke the financial exigency proclamation at its September 12 meeting in light of Dunleavy’s new funding plan.)

“The uncertainty is absolutely the worst part of what's going on,” Rollins told LJ in July. “That makes things very difficult to plan for, and it makes it very difficult to even keep morale high. I think the biggest price that we've paid—and we're talking about six years of reductions in Alaska, six years of cuts at the university—is this uncertainty about whether or not I'm going to have a job next month, or am I going to be on furlough in 60 days. There's a psychological cost that people are paying here and it's quite severe."

LEGISLATORS PUSH BACK

Beginning on July 8, a coalition of nearly 40 state Democrats, Republicans, and independents met in a special joint session in the state capital of Juneau, seeking to block Dunleavy’s cuts. “I cannot fathom why the governor is purposely throwing Alaska into a severe economic recession,” Republican state Senator Natasha von Imhof said in a statement before the vote.

However, although the legislature voted 37–1 in favor of the “reverse sweep,” it fell eight votes short of the three-quarters majority needed from the combined state Senate and House. (Another 22 legislators were not in the capital at the time, but in Dunleavy’s hometown of Wasilla, where he had attempted to convene a special joint session of his own.)

In the wake of the failed override, on July 29 the state legislature passed S.B. 2002, a funding bill that would restore 70 percent of the capital funding vetoed by Dunleavy by drawing from the state’s $2 billion Constitutional Budget Reserve, as well as a second bill, H.B. 2001, that would add $110 million to the UA FY20 operating budget. However, the measure would fund Alaska residents’ 2019 PFD payment at $1,600, just over half of the governor’s $3,000 target—a move he has said he would oppose. Both bills were transmitted to the governor’s office on August 7; he signed S.B. 2002 on August 8 and has until August 30 to sign or veto H.B. 2001.

REPRIEVE FOR UA

On August 13, Dunleavy unveiled a proposed three-year allocation for UA that sharply reduced his cuts to state university aid. The three-year budget plan, signed by Dunleavy and UA Board of Regents chair John Davies, comes more than a month into the fiscal year and about two weeks before the start of classes.

The governor—who received his master’s degree from UA in 1991—is expected to sign H.B. 2001 into law and confirm his plan for the university, barring any further action by the state legislature. The next two years of the plan are subject to the legislature’s action on the budgets each year. Under state law, each year the UA Board of Regents suggests a budget to the legislature, which then sets the amount pending the governor’s approval; he can veto items but not increase the suggested budget.

While the new agreement is a vast improvement over the cuts proposed in June, not everyone is happy with it. University officials feel that the budget drama interfered with its ability to recruit students for the 2019–20 year and prompted a number of faculty members to leave. And some legislators expressed concern with the plan, stating that it added unnecessary drama to the budgeting process and noting it left university administration little choice but to comply.

“I think the regents, in the position they’re at, had a gun to their head and basically agreed to the words that were on the page,” Sen. Scott Kawasaki (D-Fairbanks) told the Anchorage Daily News. “But the Legislature ultimately has the ability to fund the university, and I hope the governor will respect that.”

According the Anchorage Daily News, Rep. Zack Fields (D-Anchorage) said that Dunleavy was like “someone who robs a house, then comes back three weeks later to return some of the stolen goods.”

Other legislators, such as Rep. Sarah Vance (R-Homer), feel that the proposed reductions weren’t enough to make the broad changes needed by the state. And still others felt that language included in the recent document gave the governor too much power going forward, and that he is “overstepping his responsibility,” according to Sen. Gary Stevens (R-Kodiak).

In a letter to UA colleagues dated August 13, Johnsen stated that he would follow up with a plan for funding distribution once the budget is finalized. The new budget means that the university will not need to impose furloughs as planned, although it will continue with its plans for restricted hiring, travel, and procurement; eliminating subscriptions and memberships and consolidating licenses and contracts; and consolidating some administrative functions. “People around here are feeling quite a bit of relief,” Rollins told LJ. “If you're going to cut us, this seems to be a manageable way of going at it.”

Still, enrollment is down at least six percent, he pointed out, and four members of his library staff have either retired or gotten another job since May. “It’s going to take a while to get people back on their feet” at UA, he said.

Even with UA’s reprieve, and the possibility that the budget as it stands will pass in the next month, this is only Dunleavy’s first year in a four-year term. Barr encouraged Alaska residents continue reaching out to their elected officials and advocate for their library services.

"Alaskan legislators are generally fairly responsive to these issues,” noted Barr. “Our state population is smaller than most, so our legislators often have the capacity to directly engage with [the people] they represent, which makes it all the more important for people to reach out and share their views and opinions."