Alaskans would get big PFDs but no per-student education funding increase in governor’s budget

Alaska Gov. Mike Dunleavy last week announced his budget plan for the next fiscal year, which would leave the state with a roughly $1 billion deficit. It’s a hefty document at more than a thousand pages long.

Reporter Nat Herz with the Northern Journal waded through those hundreds of pages and notes that the largest areas of spending would be for Medicaid, education and Permanent Fund Dividends.

Herz said it appears unlikely that last item — what the governor calls a “full” statutory PFD — will survive the Legislature’s budgeting process.

Listen:

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This interview has been lightly edited for length and clarity.

Nat Herz: The big news in these big areas of the governor’s budget was that he, you know, still wants to pay an enormous Permanent Fund Dividend. It shows you how seriously I think people are taking this proposal that I don’t even know how much that is, because I think everyone expects the Legislature to take a look at the governor’s proposed Permanent Fund Dividend and say, “This would create a $1 billion deficit for us, and so we’re probably going to cut it in half, if not smaller than that.” I would expect a Permanent Fund Dividend — it’s an election year — of, you know, $1,000 to $1,500, as opposed to, I’m guessing the governor’s is in the probably $3,000 range, because it’s based on a sort of traditional legal formula that’s tied to investment returns. That’s one major proposal, and that dividend would be way bigger than the one approved by the Legislature last year. 

And then the other major piece of news in the governor’s budget is that, again, he’s actually not proposing an increase in per-student spending on public education. Which really prompted a pretty significant backlash from school superintendents, from representatives of teachers and folks working in public schools who say that their spending power in the past many years, where the per-student spending formula has barely been increased at all — that, you know, inflation has absolutely gone over and above the budget that Alaska has authorized, basically, the status quo level for the spending over the past several years.

Wesley Early: So beyond those big-picture items, there are a lot of smaller budget items that you scanned through when you looked through the budget. What were some that jumped out to you?

NH: As a reporter, I always really get excited about this stuff. You know, in my story, I kind of compare it to Christmas Day, or maybe Easter, because there’s a little bit of an Easter egg hunt. There are some really big components of the budget that everyone immediately becomes aware of and talks about when the budget is released. But, you know, this is a sprawling plan for state spending. It lays out how each of these 15 departments is going to run their programs in the next fiscal year starting July 1. And also all the capital construction projects that the state is going to undertake over the next year, or at least, or at least the ones that the governor wants to undertake.

So there are all these smaller projects that are kind of buried in these documents that you really have to sift through literally hundreds of pages of documents to be able to find. Because, you know, a lot of these items in the budget, the governor is happy to talk about, like how much money he wants to spend on writing checks to individual Alaskans, but some of this stuff is actually kind of polarizing. You know, relatively small amounts of money, but you can see that this is a way that the governor’s priorities are kind of coming through in this document. 

You can see he wants to spend $300,000, basically to hire new people at the Department of Fish and Game to basically fight the federal government’s position on subsistence. This is sort of part of an ongoing fight between the state and the federal government over whether urban Alaskans should be able to subsistence-harvest fish and wildlife in rural parts of Alaska or whether those subsistence harvests, as is set out in federal law, can and should be prioritized for rural residents. So that was one interesting element.

You know, there’s another pro-development item in the Division of Insurance’s budget where they basically want to run a public relations campaign for $100,000 that fights back against insurance companies that are essentially saying, “We will not insure any oil development in the Arctic National Wildlife Refuge.” I thought that stuff was really interesting.

You know, there are some other interesting proposals. Like in the capital budget, they want to spend several million dollars to basically convert the old railway between Cordova on the coast of Prince William Sound, and Chitina, the old mining hub town in Interior Alaska. They want to convert that 100-year-old rail bed that’s been defunct for almost 100 years into a trail for Alaskans to access the Copper River for recreation and harvesting fish and stuff like that. So that’s fun. 

And you know, you see also an item in here where the medical examiner’s office, which does official autopsies of dead people, is saying, “We need a significant budget increase because more Alaskans are dying, driven in part by the opioid epidemic, and our budget is not enough to keep up.” So, you know, always really interesting to go into the details of these documents and see sort of what are the true priorities for the administration as far as how they’re born out and how they want to spend state money, and also how our bigger picture trends, national global trends coming to bear on the way we run our government and Alaska.

WE: So you posted in your outlet, the Northern Journal, the day after the governor’s budget came out, noting of the 1,000 pages of the budget, here were some key items that you wanted to talk a little bit more about. And I guess for the average person reading 1,000 pages of a very lengthy budget document doesn’t sound particularly easy. How did you do it?

NH: Yeah, that’s a good question. You know, I’ve been going through budgets for close to 10 years now, sort of trying to identify the key components and key changes. And it’s true, I mean, basically, you do have to sift through hundreds of pages of documents, because  these plans, the way they’re laid out are kind of technical. Each page has dense, single-spaced, small font type about individual agency programs and agendas and position counts and stuff like that.

But I’m not reading every page. I’m kind of using some search functions that I’ve developed over the years to basically identify, OK here’s where you can see specific areas where the governor is proposing changes or increases or decreases from how things had been done before. So it still takes actually, you know, several hours to go through each of the operating and capital budgets, but it’s more of a skim or a review. I probably went through close to 1,500 pages by the time all this was said and done, but not, you know, meticulous detail of each one. In total I probably spent five hours reading budget documents and another five hours analyzing and writing up what I pulled out of them.