Alaska governor prevails over lawmakers in clash over his spending cuts


ANCHORAGE, Alaska (Reuters) – Alaska’s governor prevailed on Wednesday in a showdown with lawmakers trying to reverse his bid to slash higher education spending by 40%, a move the state’s main university has warned would force it into financial ruin.

Republican Mike Dunleavy, in his first year as governor, has pushed for drastic cuts to education and other programs to help pay for his chief campaign promise – sharply increasing the annual oil revenue dividend the state pays out to each Alaska resident.

Thirty-eight Democrats and Republicans who make up a controlling coalition in the Republican-majority legislature sought to block spending cuts, which Dunleavy enacted by way of dozens of line-item vetoes last month.

But they fell eight votes shy of the 45 needed to override him – a three-quarters majority of 60 members of Alaska’s combined Senate and House of Representatives.

The final tally was 37-1 in favor of an override, with one of Dunleavy’s original opponents, Republican Representative Tammie Wilson, ultimately siding with the governor and urging lawmakers to reopen budget talks seeking compromises one program at a time.

Twenty-two Republicans who backed Dunleavy refused to even attend the joint legislative session in Alaska’s capital, Juneau. They decamped instead to the governor’s hometown of Wasilla, where he had sought unsuccessfully to convene the special session in a local school auditorium.

Dunleavy has said his cuts are necessary to scale back what he sees as bloated spending and to cope with a long-term decline in state oil industry receipts undermining Alaska’s economy, even as he has proposed increasing the oil revenue dividend to individuals to $3,000 a year.

Critics say the reductions, totaling about $440 million, are so draconian they will only worsen the state’s economic slump.

“I cannot fathom why the governor is purposely throwing Alaska into a severe economic recession,” Republican state Senator Natasha von Imhof said just before the vote.

The University of Alaska system would be especially hard it, accounting for $130 million of Dunleavy’s vetoes, an amount equivalent to the entire budget of one of its three main campuses – Anchorage, Fairbanks and Juneau.

The university system also includes the International Arctic Research Center in Fairbanks, home to some of the world’s most renowned climate scientists.

University officials have warned the institution faced virtual bankruptcy if the spending cuts went through, forcing shutdown of entire programs and layofffs of up to 40% of faculty and staff.

Dunleavy, a former teacher and outspoken supporter of U.S. President Donald Trump, said he believed the university was resilient and would emerge in a healthier state.

Other programs targeted by Dunleavy’s cuts – 182 line-item vetoes in all – include the state’s Medicaid program, social services, law enforcement and services for the poor and elderly.

Reporting by Yereth Rosen in Anchorage; writing by Steve Gorman; editing by Bill Tarrant and Lisa Shumaker