As Dunleavy defends budget, nonpartisan analyst questions whether it was designed ‘to create chaos’

Gov. Michael Dunleavy during a press conference before his third cabinet meeting, on Tuesday, Jan. 8, 2019, in Juneau, Alaska. (Photo by Rashah McChesney/Alaska’s Energy Desk)

Gov. Michael Dunleavy’s budget is facing criticism — in legislators’ town halls across the state last weekend, and in a Senate committee on Tuesday. That’s where nonpartisan budget expert David Teal said the administration hasn’t provided justification for many of its far-reaching proposals.

But in an interview, Dunleavy stood behind his plan to cut more than $1.5 billion from the budget. While lawmakers have been hearing a lot of criticism of the budget, Dunleavy said he heard good things in a visit to Matanuska-Susitna Borough and Anchorage last weekend.

“Their message to me was: This was why you were elected,” Dunleavy said. “We want to see you continue to have a discussion with the people of Alaska on a balanced budget, one that revenues and expenditures meet without having to take the PFD or tax Alaskans.”

Dunleavy said national news has reinforced his reasoning for the budget. He cited news reports that New York Gov. Andrew Cuomo has expressed concern about upper-income residents leaving the state as a result of taxes. And congressional Republicans want to declare the national debt a security threat to the U.S.

“Those are indicative of, once again, spending that’s out of control, individuals that are leaving states that are high-tax states,” he said. “So for me, it makes it even more important that we get our fiscal house in order this year than let it linger, because we are running out of savings, and it’s going to be a problem for the state.”

Legislative Finance Director David Teal speaks during a House Finance Committee meeting in the Alaska State Capitol in February 2018. Teal criticized the lack of justification provided for major proposal in Gov. Michael Dunleavy’s proposed budget. (Photo by Skip Gray/360 North)

The budget received tough criticism during Tuesday’s Senate Finance Committee hearing from Teal. He’s the director of the nonpartisan Division of Legislative Finance, which advises the Legislature on budget issues.

Teal wasn’t criticizing the content of the budget, but he said the Dunleavy administration hasn’t offered an adequate explanation for the proposed changes. He noted that committee members have raised similar concerns.

“It seems apparent that many of you share my disappointment in the lack of evaluation and analysis to support the governor’s proposals,” Teal said.

Teal is known for his normally measured tone when delivering budget analyses to lawmakers. But he didn’t hold back about his reaction to the lack of supporting documents that were included with Dunleavy’s budget.

“Looking at the lack of justification, I began to wonder whether the budget was designed in some way to create chaos,” Teal said.

Teal said it’s unrealistic for the Legislature to analyze and pass the budget by the scheduled end of the session on April 14, given how little information it includes.

“Maybe there’s some hope on the governor’s part that you’ll just throw up your hands and say, ‘We don’t have time to evaluate this. We’ll just go along with what the governor proposes because we don’t have much of a way to come up with alternatives. We don’t have the time,’” he said. “Or maybe, creating chaos is just a clever way to force a conversation that needs to happen.”

Dunleavy said his budget proposal includes enough justification for the cuts. He rejected the criticism and said Teal has been part of the process as the budget has grown out of control. The governor said a lot of thought went into preparing the budget, “probably more this year than at any time in the past.”

“We’ve tipped over every stone,” Dunleavy said. “We’ve looked under every layer that we possibly could to come up with places where we could save money — to come up with places we believe may not impact the majority of Alaskans.”

Dunleavy acknowledged that cuts to the public schools and ferries affect a large portion of Alaskans. And he repeated that the budget closes a $1.6 billion gap without using a broad-based tax or reducing permanent fund dividends.

Senate subcommittees are meeting this week to consider the effect of the proposed cuts on each state department.