Gov. Mike Dunleavy unveiled an austerity budget Wednesday featuring widespread cuts to state spending, offering specifics on how he plans to reconcile a $1.6 billion deficit.

The governor spoke in Juneau Wednesday morning, taking questions on the budget even as reporters first laid eyes on new budget documents released by the state Office of Management and Budget. A KTVA live stream of the governor’s news conference was briefly interrupted and was posted on Facebook in two parts.

 
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Dunleavy had vowed to submit a budget that doesn’t increase expenditures beyond revenues or call for new taxes from Alaskans, saying Wednesday’s plan sharply differed from one he submitted in December based on previous Gov. Bill Walker’s proposal.

OMB’s director, Donna Arduin, said the only new spending in Dunleavy’s budget was in support of his four crime bills meant to address Senate Bill 91’s shortcomings. She also noted that the Department of Corrections is considering sending 500 prisoners out of state, under a plan that would save the state $12 million.

There were few details on any further privatization proposals from the administration, after the management of the troubled Alaska Psychiatric Institute was privatized earlier this month.

Arduin confirmed that the administration has briefed University of Alaska President Jim Johnsen on a proposed $155 million cut to the UA budget, as its Anchorage campus struggles with accreditation issues in its education program.

A UA statement Wednesday afternoon said Dunleavy's proposed cut wiped out a proposed funding increase under Walker's budget, in addition to cutting $134 million from the UA system's current funding levels.

Additional savings, Arduin said, would come from eliminating state travel and capping exempt state employees’ salaries.

The governor said little about his stance on Medicaid expansion, a cause backed by Walker, when asked about it Wednesday.

The state also plans to consolidate various investigators under a new unit in the Department of Law, Arduin said.

In response to successive questions, Dunleavy said he thought his budget’s steep cuts and its commitment to no new taxes would make the state more appealing to residents and investors alike.

"Folks aren't going to want to stay in a state that they think is unstable," he said. "I think people want to know if they invest in Alaska, are we going to be predatory, are we going to hit them with taxes as they hit the ground running?"

In a final appeal for the budget Wednesday, Dunleavy said it attempts to reconcile decades of previous overspending by the state.

“The can has been kicked down the road for some time, but we’re going to solve it this year,” Dunleavy said.

Editor's note: University of Alaska information has been added to this story regarding its budget cut.

Lauren Maxwell, Steve Quinn and Daniella Rivera contributed information to this story.

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