Dunleavy building Alaska budget 'from the bottom up'
Alaska lawmakers have been discussing the state’s finances for nearly a full month without Gov. Mike Dunleavy’s true budget. That changes Wednesday morning, when Dunleavy says he will unveil his plan to close what he says is a $1.6 billion budget gap.
“What we’re doing with this administration is, we are not cutting,” Dunleavy said. “We are building a budget from the bottom up, from zero up. We’re going to build that up to where we reach our revenues.”
Dunleavy met the Dec. 15 constitutionally-mandated deadline of submitting a budget proposal, but he said it was a template from former Gov. Bill Walker, and changes were immediately promised. After taking office Dec. 3, Dunleavy had only a few weeks to submit the initial proposal, but his budget team has been working to meet the Wednesday deadline for an amended budget.
In a recent 20-minute interview with KTVA, Dunleavy wouldn’t discuss budget details, saving them for Wednesday. He did say Alaskans can expect new approaches to how state government operates.
“You’re going to see a whole slew of different approaches to not just budgeting but in services and what can we do as [the] state of Alaska in terms of enlisting the private sector,” he said.
Last week may have offered a glimpse at Dunleavy’s plans for privately held companies managing state-run. On Friday, the Department of Health and Social Services announced that it has contracted management of the Alaska Psychiatric Institute to a private firm, Wellpath Recovery Solutions.
“When you partner with private enterprise, you have to make sure the state’s concerns are first and foremost,” Dunleavy said. “And that they are written into any contracts and any expectations, and we have the oversight of the implementation of those contracts.
“That one situation with API was not managed well. Everyone agrees with that. What we want to do is put something in place that is going to be managed well and be a benefit to the clients seeking that service as well as the people that work there.”
Another glimpse into Dunleavy’s budget priorities can be found with public safety. Even with the state’s budget gap, Dunleavy has proposed four crime bills that will cost the state at least $40 million more per year.
“You’ll probably see budgets related to public safety grow not just this year but next year,” Dunleavy said. “But we are also going to get better at public safety. Nonetheless, you’ll see more money going to public safety to protect Alaskans.”
Budget wrangling is not unique to the Dunleavy administration. The state has faced chronically low oil prices since late 2014 when Walker was elected, and oil revenue drives nearly 70 percent of the state’s budget.
On Aug. 29, 2014, North Slope oil sold for $100.47 per barrel. It hasn’t been more than $100 per barrel since.
Five months later, when the Legislature gaveled in, oil had fallen by more than half to $47 per barrel, and lawmakers have struggled with crafting budgets that rely largely on the volatile oil markets.
“What has happened in Alaska over the years is that oil has rebounded; the issue is it hasn’t rebounded in the manner than it has in the past,” Dunleavy said. “We don’t have the revenue to support the budgets that we’ve had in the past.”
New taxes are not up for discussion, according to the new governor. Dunleavy says they are unnecessary, and he has fought against them even while serving in the Senate for five years before stepping down in January 2018 to focus on his campaign.
Alaska has neither a sales nor an income tax. The nation's next lowest state tax regime is in New Hampshire, which still levies a 5 percent tax on dividends and interest.
“I don’t believe we need to form a budget based on additional revenues,” Dunleavy said. “That’s why we’re not. I believe government is best if it’s kept small and focused and out of the lives of people. That’s what I truly believe.”
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