Dunleavy points to university budget cut agreement as a model

Governor Mike Dunleavy and UA Board of Regents chair John Davies sign a compact detailing three years of cuts to the university system. (Photo by Wesley Early, Alaska Public Media – Anchorage)

Gov. Mike Dunleavy said his agreement with University of Alaska leaders to reduce the university budget can be a model for funding other agencies and nonprofits. Nonprofit leaders have said they’re open to working with the governor. But it’s unclear how the approach will work in practice.

Dunleavy said the university agreement could be a model for the state in working with other organizations to help close a gap of more than $1.5 billion between what the state spends and what it brings in.

“If we can work with an institution like the University of Alaska, and this is a model, I think we can work with other agencies going forward — other nonprofits,” he said. “How can they contribute? How can they help us all work together as Alaskans to deal with this fiscal issue?”

University leaders said the agreement to reduce spending by $70 million over three years provides a “glide path” for the university, compared with Dunleavy’s original plan of cutting $135 million in a single year.

University President Jim Johnsen gave credit to the governor, legislators and others.

University of Alaska President Jim Johnsen delivers the State of the University address at a Juneau Chamber of Commerce luncheon in Juneau on Feb. 16, 2017. (Photo by Skip Gray/360 North)

“This is an opportunity to pivot to the positive,” he said.

But the agreement follows an initial veto that Johnsen described as devastating. And even as the university president said the veto is in the past, he said the damage in recruiting top staff from the veto will last.

“I believe it’s also damaged the university’s ability to enroll students,” he said. “No question about that. But that’s done.”

Dunleavy’s mention of working with nonprofits is welcomed by Diane Kaplan. She’s the president and CEO of the Rasmuson Foundation, the state’s largest private foundation. She said the foundation had reached out to Dunleavy’s office many times since he was elected, but he hasn’t met with them.

“We have a lot of business with the state,” she said. “We really don’t know what the governor’s vision is going forward with a lot of the programs that we have invested in with the state. So I hope he follows through on that and is willing to meet with people who are trying to do good to make Alaska better.”

Diane Kaplan, president and CEO of the Rasmuson Foundation, addresses a crowd at the Yukon Kuskokwim Ayagnirvik Healing Center on Jan. 11, 2017. (Photo by Dean Swope/KYUK)

Rasmuson has provided funding for the Alaska State Council on the Arts, which Dunleavy vetoed all funding for, and the Alaska Housing Finance Corporation, which operates programs Dunleavy twice vetoed funding for this year.

While Dunleavy’s agreement with the university is leading to cuts, the state tried a different approach with another publicly-funded nonprofit on Wednesday. Alaska Legal Services Corporation won’t face a second veto of more than $750,000 in state funding, but the agency agreed to limit the use of state money to assist victims of domestic violence and sexual assault.

Nikole Nelson, the corporation’s executive director, said the state money is important to the corporation’s overall budget.

“It’s critical to helping us maintain our statewide footprint and our offices throughout Alaska, including in the rural communities,” she said.

Nelson said the state provides 15% of the corporation’s funding. She said the organization is still reviewing what the impact on legal services will be from the state dedicating its funding to a specific area.

“What I can say is that we as an organization continue to be committed to providing legal aid on a full range of civil legal issues,” she said.

Dunleavy is weighing what to veto in House Bill 2001, which would reduce his vetoes and pay permanent fund dividends at a reduced, $1,600 level this year.