Sen. Stevens says Dunleavy budget is “far from balanced,” pulls too much from state savings

Governor Dunleavy proposed a budget for the Fiscal Year 2021 last week. It relies heavily on state savings, and it leaves much of the balancing decision-making up to the legislature.

“Pretty much the governor has placed it in our hands and said ‘Figure it out’,” said state Sen. Gary Stevens. Stevens represents a number of Gulf communities including Kodiak.

He says he’s concerned about the proposed budget, which he says is far from balanced. “He has not really reduced the budget this year, he has added to it … Unlike the federal government, we have to have a balanced budget, we have to make sure that you know, income equals outflow.”

In a repeat of one of last year’s major budget sticking points, the governor’s budget includes a full $3000 permanent fund dividend. On top of that, Stevens says, Dunleavy would like to see a retroactive payment to Alaskans to make up the difference in this year’s $1,600 dividends.

Stevens says this would drain about three-fourths of the Constitutional Budget Reserve and go well beyond the 5 percent limit on the Permanent Fund Earnings Reserve.

“That would really, really damage the permanent fund itself. It would not be growing as it should be. And it would be the first time we’d see a reduction in the corpus itself.”

Dunleavy’s other increases to the budget include another $19 million for prisoners’ healthcare as prison populations have risen. Preventative dental care under Medicaid was added back after originally slated to be cut, that’s $8.3 million. And the budget also includes an $11 million boost for public education.

The Alaska Marine Highway System budget was increased slightly, in part to reduce the 9-month gap in ferry service expected by Cordova this year. Stevens says, that’s still not enough.

“We need to put more money into it. And we also need to address the fact that vessels are getting older. We need to replace the Tustumena, that’s over 50 years old. If you’ve noticed that at this point, over half the fleet has been tied up for various reasons. And it’s it’s not just us. It’s not just Kodiak and Cordova and in our villages that gets service but it’s also southeastern.”

In addition to hammering out budget details, Stevens says he has two education bills he’s planning to bring to the floor next month. The next legislative session begins January 21.