Borough manager Debra Schnabel said Gov. Mike Dunleavy’s deep cuts in public services will make living in Alaska more difficult and she expects a mass exodus from the state due to dwindling services.

“I think who’s going to be hit the hardest are elderly people and families with young children,” she said. “Many of the things that we have that enhance our community will not be tended to or just won’t be there, period.”

Low-income Haines residents will be affected by deep cuts to Medicaid funding and almost 100 senior citizens will lose monthly cash benefits under the governor’s budget vetoes announced June 28. The cuts took effect with the start of the state fiscal year on July 1.

As of January, 86 Haines seniors received the monthly cash benefits, according to Alaska Commission on Aging spokesperson Denise Daniello. That’s 16 percent of the community’s 65-and-older population, a portion Daniello called “pretty significant.”

The benefits ranged from $75 to $250 a month, depending on a senior’s income. The program started in 2004 and served more than 11,300 seniors before Dunleavy vetoed the $20.8 million appropriation.

Other budget cuts imposed by the governor’s vetoes include state funding for local school construction debt, along with total elimination of state money for public radio and TV and the Alaska State Council on the Arts.

Dunleavy also eliminated the Ocean Rangers program, which puts marine engineers aboard cruise ships to ensure that vessel operators comply with state environmental laws. Though the decade-old program was funded by a per-berth tax on the industry, not state general fund dollars, the Dunleavy administration said it imposed an unnecessary regulatory burden on the industry. 

The vetoes will stand unless the Alaska Legislature, which reconvenes in special session on July 8, can muster a three-quarters majority, 45 of 60 votes, to override the governor’s actions. The deadline for a veto override is July 12. The Legislature could vote on the entire budget bill at one time or vote on individual vetoes item by item.

In announcing his $444 million in vetoes from the state operating budget, including early childhood education, Dunleavy added to $190 million in cuts already approved by lawmakers. The total is more than 10 percent of state general fund spending.

The governor said he will propose additional spending reductions next year as he strives to make good on his campaign pledge to cut state spending — without any new taxes.

The governor’s other campaign promise to pay a $3,000 Permanent Fund dividend is unresolved. Legislators, when they meet in special session, will continue to debate the merits and affordability of paying out about $2 billion to individual Alaskans while significantly cutting community services.

In Haines, the governor’s veto of half the state funding for local school construction debt payments will put the borough on the hook for about an additional $450,000 to cover the loss of state aid in fiscal year 2020, which started July 1.

The cut to school debt reimbursement is the largest hit to the borough from the vetoes. The state has helped the borough pay 70 percent of its school bond debt every year since Haines built its $17 million school in 2005. This year, the reduction in state reimbursement will be covered with higher property taxes.

Earlier this month, the borough assembly took a gamble when it raised the property tax mill rate by 0.17 mills in the townsite area to pay for the bond payments, banking Haines would lose half of the state aid. The governor had originally proposed a 100 percent cut in state funding for the reimbursement program.

Overall, the governor’s budget vetoes hit education hardest, with a $130 million cut to the University of Alaska budget, which the university president called “devastating,” adding, “we may likely never recover.” When added to the minimal $5 million cut already approved by legislators, the combined reduction totals a 41 percent slash in state funding for the university system this year.

The university’s board of regents has not yet decided how to spread the cuts across campuses statewide.

Additional cuts ordered by the governor include all funding for early childhood programs through the state’s Department of Education and Early Development. That money has paid for student enrollment at Haines Head Start and the Parents as Teachers program, which sends staff into homes to work with parents and children.

He also vetoed $800,000 to public libraries for Online with Libraries and Live Homework Help programs.

After education, the second largest collection of budget cuts was to health and social services programs, a $90 million hit, with most of that in Medicaid, including eliminating the adult dental care program.

The Care-a-Van service that transports Haines seniors will not be affected by the vetoes, according to Department of Transportation spokesperson Debbi Howard. She said the state has enough remaining money from previous grants to pay communities to continue the service.

Public radio station KHNS, which serves Haines and Skagway, will have to deal with the loss of $75,000 it normally receives in state funding. Station manager Kay Clements described it as “cutting fat off a lean machine.” Clements said the station is looking at switching to a less expensive national news provider and examining other money-saving strategies.

The Alaska State Council on the Arts, which lost all of its funding in Dunleavy’s vetoes, supplies grants to the Haines Sheldon Museum and the Haines Council on the Arts to bring musicians to the Chilkat Valley.

Helen Alten, museum director, said the Haines Sheldon Museum had expected to receive a $5,000 grant from the council that would have helped with personnel costs.

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