Governor cuts Alaska tourism marketing agency funding, putting its campaign on hold

Legislators are unpacking $215 million in vetoes made by the governor to see their potential impacts
Alaska State Capitol.
Alaska State Capitol.(KTUU)
Published: Jul. 2, 2021 at 6:57 PM AKDT
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JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy has said he wants to market Alaska as a safe travel destination during the COVID-19 pandemic. On Thursday, he vetoed $10 million from the state’s tourism marketing institute.

Sarah Leonard, CEO of the Alaska Travel Industry Association, said an ongoing Alaska marketing campaign is now on hold after the governor’s vetoes were announced.

“ATIA’s current marketing efforts, and those by the Governor’s office, to attract travelers are starting to pay off this summer,” Leonard said by email. “However, without a funding allocation for statewide destination marketing of Alaska, the momentum that’s been created will be cut off and there will be no funding to market Alaska to potential travelers in 2022 and beyond.”

Corey Young, a spokesperson for the governor’s office, said via email that the ATIA has received significant federal funding allowing it to market Alaska during the COVID-19 pandemic.

Another veto of a $4 billion transfer to the constitutionally protected part of the Permanent Fund was not completed correctly by the Dunleavy administration. The budget sent back to the Legislature has that transfer intact.

The governor sent a letter to legislative leaders on Friday, saying that was an error caused by the “unusual time constraints” the administration encountered while reviewing the budget bill. He said it was his intent that the transfer be vetoed.

Rep. Zack Fields, D-Anchorage, cited the cut to tourism marketing, along with several others, as perplexing.

“What’s so strange about it is that these are projects that the governor’s own administration told the Legislature that they wanted us to fund,” Fields said. “So he’s eliminating jobs, but he’s eliminating jobs from projects that he identified — that’s just bizarre.”

There was $650,000 cut from two hatcheries benefiting sportfishing. The governor also vetoed funding to start building a hiking trail from Seward to Fairbanks that he himself proposed. Other vetoes would see planned construction projects at Alaska State Parks halted.

Just over $17 million was cut from Medicaid that some legislators expect the federal government will require to be paid back in 2022 as has happened in the past. The University of Alaska is also looking at a $31.6 million cut of funding that had been approved to tackle deferred maintenance.

The governor also vetoed the 2021 Permanent Fund dividend approved by the Legislature, calling it “a joke” and asked that legislators approve a new dividend when discussing a comprehensive fiscal plan. This year’s PFD would have been $1,100 if another three-quarter vote had passed.

Sen. Tom Begich, D-Anchorage, said these vetoes could effectively blow up negotiations between legislators.

“Now we’ve got to look at all these vetoes, determine the damage the vetoes are going to cause,” Begich said. “And we have to negotiate with all four caucuses how we’re going to resolve those vetoes. That is going to put the fiscal plan discussion on the backburner.”

Three quarters of the Legislature is needed to overturn any of the governor’s vetoes. Legislators can also pass another appropriation bill that funds the cut spending items through a simple majority vote, sending them again to Dunleavy’s desk for his consideration.

Some legislators say they are generally happy with the governor’s $215 million in vetoes.

Sen. Shelley Hughes, R-Palmer, applauded Dunleavy’s decision to cut one quarter of legislators’ per diem payments, saying that could encourage the Legislature to forge a permanent fiscal plan.

“We have to make some tough decisions and I think legislators are getting ready to do that and perhaps yesterday’s veto actions by the governor are a bit of a wake-up call,” she said. “And we need it.”

Some legislators are saying these vetoed spending items could become bargaining chips and could be restored during upcoming fiscal debates.

Vetoes for mental health spending are concerning for Begich.

He said they raise the specter of lawsuits by potentially breaching a 1994 settlement with the state over the role of the Alaska Mental Health Trust Authority and how mental health services are funded.

“Overall, it’s a really cruel budget,” said Jim Gottstein, one of the attorney’s from the 1994 case and the author of the Zyprexa Papers.

He said there have long been examples where the settlement has been breached, but this might rise to the level of an Alaska Mental Health Trust Authority beneficiary choosing to sue.

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