Gov. Dunleavy announces proposed amendments to state budget

Gov. Mike Dunleavy announced $117 million in undesignated general fund budget amendments to his proposed budget on Wednesday.
Published: Feb. 15, 2023 at 4:07 PM AKST
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JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy announced $117 million in undesignated general fund budget amendments to his proposed budget on Wednesday.

Dunleavy’s budget amendment proposals include increases to the Office of Public Advocacy and Public Defender agency, the Division of Public Assistance in the Department of Health, and matching federal funds for the Alaska Marine Highway System, as well as numerous other amendments to increase funding for items such as wildfire suppression, seafood and travel industry marketing, village public safety officers and Alaska State Troopers, and Medicaid programs.

With the amendments, a fiscal summary provided by the Office of Management and Budget shows a deficit of $433.5 million.

“It’s hard to tell what this budget is going to look like in the endgame, but we believe that what we’ve presented can be covered right now with existing revenues and the CBR,” Dunleavy said. “We get the carbon stuff going, we believe that that new revenue stream can address a number of issues going forward so that’s, right now that’s the plan.”

Contract attorney funding increase

Included in Dunleavy’s budget amendments is $8.3 million over two years to increase funding for the Public Defender Agency and the Office of Public Assistance. Early in February, Alaska Public Defender Sam Cherot announced that staff in Nome and Bethel had too many cases to represent any additional Alaskans charged with Class A felony and unclassified felony cases. That shortfall began this week on Feb. 13.

“That’s been a long-running issue for OPA, is attracting private defense attorneys willing to take on these difficult cases for the rate of pay that we offer,” Office of Public Advocacy Director James Stinson said. “This is a solution to that issue. I think that this will go a long way in helping address the case backlog, this will go a long way in finding representation for conflict cases.”

The funding would provide a 20% raise in pay for attorneys contracted by the state to represent Alaskans who require legal representation from the Office of Public Advocacy or the Public Defender Agency.

“With the support of the governor and the legislature, the agency can create solutions to long-term staffing shortages. We hope the current position we’re in is very temporary and short-term, as we really are just two to three experienced attorneys away from being able to accept these appointments in the most serious cases in Nome and Bethel,” Cherot said. “I think these funds are critical to being able to offer more competitive pay to private attorneys to hopefully take some of these cases in the interim to provide some relief for our already overburdened attorneys.”

Division of Public Assistance

Dunleavy’s budget amendments also include $9 million in the operating budget to be directed to the Division of Public Assistance within the Department of Health. An additional $54 million is included in the capital budget.

A press release detailing the budget amendments said that the capital budget amendment was to “fully finish migrating the Division’s eligibility system from the outdated legacy system and into AIRES, a database, for full implementation into one, more modern system.”

“We have talked several times about what caused the backlog issues which, is really our legacy IT systems,” Acting Department of Health Commissioner Heidi Hedberg said. “We’re incredibly thankful for $54 million that’s in the capital budget that will deal with our systemic issues. Again, we need to get off of the mainframe and move those, the SNAP program and the Medicaid program off of the eligibility information system into AIRES, so I think that’s a big focus area. We know with the modernization of our IT systems and with the additional support with our temporary staff — we’re going to always continue to reevaluate — but we believe that our permanent positions are sufficient.”

Ferry system funding

Department of Transportation and Public Facilities Commissioner Ryan Anderson said that federal matching funds would be utilized for myriad improvements to Alaska’s ferries and ferry systems.

Anderson said that Alaska was awarded $285.6 million in federal discretionary grants, as well as six individual grants. Of those funds, $44 million was awarded to the operation of ferries, $68.4 million will go toward the replacement of the M/V Tustumena, and $8.6 million will be spent on planning and design of a replacement ferry in the future. Anderson said that the remaining $163.7 million will fund the construction of an electric ferry, upgrades to infrastructure at docks and modernizing the existing ferry fleet.

However, $40.9 million in matching funds are required to access federal dollars, which Anderson said would come from a federal program which has not been used in Alaska previously: toll match credits. The Alaska Marine Highway System is classified as a toll facility.

“To meet this requirement, the state is proposing to use an innovative federal aid highway tool that allows the state to use existing federal dollars to capture these new federal dollars,” Anderson said. “This tool allows the state to use other federal funds in lieu of state funds as match on the $163.7 million of federal funding for the electric ferry and the upgrade of dock infrastructure and vessel modernizations.”

Anderson said that the toll match credits allows for toll revenues that were reinvested into maintenance and improvement of a toll facility to be used for required state matching funds of certain projects.

Additional amendments proposed by Dunleavy include:

  • $10 million ($5 million each) to Alaska Seafood Marketing Institute (ASMI) and Alaska Travel Industry Association (ATIA)
  • $7.5 million for Alaska Energy Authority (AEA) Renewable Energy Grants
  • $8 million for wildfire suppression
  • $24.4 million for Medicaid rates and match
  • $5 million for State assumption of Section 404 Permitting Primacy
  • $2.8 million for 10 more VPSOs and housing allowances
  • $250,000 to assign a dedicated Alaska State Trooper to investigate in-custody inmate deaths and reported felony and misdemeanant criminal cases within the correctional facilities.

Dunleavy’s budget was released on Dec. 15 last year. The governor’s amended budget and proposed budget can both be viewed on the state website.