Walker: Budget slashed to protect state savings

Gov. Bill Walker has vetoed $1.29 billion from the budget passed by the 29th Alaska Legislature, including a line-item veto cutting Permanent Fund dividend checks to $1,000, saying this is a necessity to protect the state’s primary savings.

“Drawing down from limited savings to fund the budget is not a viable plan,” Walker said at a news conference in Anchorage on June 29, where he announced a number of substantial cuts in the state budget.

“We have a $4 billion deficit, which means the status quo is not on the menu. Despite the Legislature’s inaction, I’m still going to make sure Alaskans get a sustained Permanent Fund dividend.”

Walker’s line-item veto actions include providing for a PFD check of $1,000 per person by reducing the $1.362 billion Permanent Fund dividend appropriation to $695.6 million.

Walker also used his veto power to reduce the $430 million appropriation for oil tax credits to his original proposal of $30 million, which is the statutory minimum requirement. He noted that the budgets of the 12 executive branch departments of state government have already been cut 20 percent or more in the last two years.

Other major cuts included an additional reduction of $10 million from the University of Alaska budget, and an additional $58.3 million in reduced education funding.

Walker said that to minimize direct impact to classrooms, base student allocation funding was reduced $6.4 million, while school debt reimbursement and rural school construction were cut by 25 percent, or $30.5 million and $10.4 million respectively.

The complete summary of cuts and full list of vetoed items are online at:

Walker said none of the decisions on where to cut were made lightly. “I especially struggled with the funding to education, which I have consistently prioritized,” he said.

“But a $4 billion deficit means nothing can be insulated. What’s disappointing is this was completely avoidable.

“My team and I introduced a balanced plan in December that fairly distributed the burden across all demographics. Not a single measure of that plan was passed by the Legislature, nor was another plan even introduced.”

Walker also thanked the Senate “for having made the fiscally responsible decision to pass the Permanent Fund Protection Act, a vote some House members refused to even take.”

University of Alaska officials responded by saying that to meet the $10 million reduction to their funding, approximately $8.5 million would be trimmed from areas set to receive a modest increase this year. These include research, the K-12 partnership, workforce development, the Alaska Native Science and Engineering Program, Title IX compliance, and initiatives focused on development, degree completion and student recruitment and retention. Title IX is a comprehensive federal law that prohibits discrimination on the basis of sex in any federally funded education program or activity.

The remaining $1.5 million would come from reducing high level administrative positions at the university, said UA President Jim Johnsen.