Alaska Gov. Mike Dunleavy signed the Fiscal Year 2023 state operating and capital budgets into law on Tuesday.
The spending plan moves Alaska into a new direction with prudent and fiscally responsible investments in public safety, public education, the University of Alaska, and infrastructure projects that create jobs and economic development, his office said. It also saves $1.6 billion dollars, which is being paid back to the Constitutional Budget Reserve for future use, when oil prices gyrate lower.
In addition, the budget includes a historical 2022 Permanent Fund dividend for every eligible Alaskan.
“This budget is more than a spending plan; it’s a blueprint for Alaska’s future,” Dunleavy said. “Budgets should reflect the values and ambitions of the people they are designed for, and I believe this legislation accomplishes that. It strikes the right balance by continuing my administration’s commitment to rebuilding state services like public safety while holding spending in check, adding to our savings, and pointing the economy in the right direction.”
The Dunleavy Administration’s fourth state budget invests in the following:
Protecting all Alaskans – Public Safety, People First Initiative, Missing and Murdered Indigenous Persons
Protecting Alaskans has been Governor Dunleavy’s number one public policy priority since taking office in December 2018. His public safety budget reflects his unwavering commitment to keeping all Alaskans safe from crime.
· The budget authorizes 10 new Alaska State and Wildlife Troopers and 10 Village Public Safety Officer positions
· Higher salaries for VPSOs and Troopers to attract the most qualified and motivated candidates to a career in law enforcement
· New housing for public safety officers in rural communities
· Additional funding to hire more criminal prosecutors and support staff
· Creates an innovative Crisis Stabilization Center test program to treat Alaskans experiencing a mental health crisis
Public Education – Accountability
The FY23 budget not only increases funding for Alaska’s public school and university systems; it also brings long-overdue accountability for students’ and parents’ sake.
· $117 million investment in education, including funds dedicated to the Alaska Reads Act, a comprehensive reading intervention program so all students can read at grade level by the end of third grade. Increased resources include $57 million in one-time funds to schools, $2.5 million for Pre-K and an increase to the BSA.
· The Alaska Reads Act will be culturally responsive to rural and Alaska Native students
· Forward funds K-12 education in FY24 with $1.2 billion
· Delivers tax relief for local taxpayers by funding school bond debt reimbursement
· Enhancements to Alaska’s student loan program
· Innovative research in drone technology, critical minerals, heavy oil, and mariculture at the University of Alaska
Investing in Alaska: Ports, Bridges, Airports and More – FY23 Capital Budget
· Funds critical repairs to the Port of Alaska
· Invests in a new deep-water port in Nome – a strategic Arctic port for the United States
· Upgrades and improvements for multiple airports across the state
· Funds repairs for roads and bridges statewide
· $117.3 million in state and federal funds for the Village Safe Water program, so more rural communities have safe, clean drinking water and sanitation
· Sets state on course to pay off oil tax credits once and for all by this year. This honors the state’s commitment to pay off debt abandoned by a previous administration
· Invests in the Alaska Marine Highway System with a new mainline vessel and maintenance funds to keep ships on the water serving coastal communities
Fiscal Responsibility – Savings, Endowments and Line-Item Vetoes
Governor Dunleavy carefully examined the increased spending made by lawmakers this year. His objective was to preserve the temporary surplus from higher oil revenues to the greatest extent possible. Reductions were made without harming essential state services. The line-item vetoes total $400 million, and those unspent funds will be deposited into the Constitutional Budget Reserve, a rainy-day savings account for years when state revenues are down. Funds taken from the CBR have to be repaid, which has not been done for several years.
· All state agency budgets, except Public Safety and Education are down 10% from 2019
· The FY23 budget deposits $1.6 billion in the CBR
· The bottom line: Alaska’s CBR account balance more than doubled, from $1.3 billion to approximately $3 billion – enough to cover the state budget if oil prices collapse
Alaskans Accessing Alaska – Agriculture and Mariculture
· Funds the development of a mariculture industry in Alaska
· Increases food security with the Nenana-Tokchaket Agriculture Project to produce more food, fuel, and fiber for in-state consumption
The FY23 budget addresses many long-standing issues with infrastructure, public safety, and technology in rural communities.
· Broadband technology – an integral part of today’s world
o Up to $1 billion anticipated for Alaska to connect all Alaskans with at least 100/20 mbps internet service
o $3 billion for the Tribal broadband program
o Establishes a new State of Alaska Broadband office scheduled to open July 1, 2022
· Replaces the K-12 public school in Napakiak threatened by erosion
· Fully funds the Power Cost Equalization program for the fourth straight year
· Fixes a technical problem in the state’s school funding formula so the Hooper Bay School receives it fair share of education funding
· Funds plowing of ice roads in rural communities off the road system
· As stated before, funding for new Troopers and VPSOs in rural communities, housing for public safety personnel, the Village Safe Water program, a deep-water port in Nome and upgrades to rural airports
2022 Permanent Fund Dividend
· The PFD is, and will always be, Alaskans’ rightful share of the state’s enormous mineral wealth.
· 2022 marks the return of substantial PFD payments to all eligible Alaskans and this year’s payment will be the largest in state history. It couldn’t come at a more critical time.
· Based on Dunleavy’s 50/50 PFD plan, it divides the annual draw from the Permanent Fund equally between state services and the dividend
· Families need help now with rampant inflation, record-high fuel costs, and the economic damage caused by the pandemic
· Dunleavy will announce the distribution plan for the PFD soon
“As Alaskans, we all know the surge in oil revenue is temporary. What it buys us is time to continue working together on a fiscal plan that smooths out the inherent volatility in oil revenue. The result will be that Alaskan families will not experience diminished services when revenues are down, and the business community is assured that Alaska’s fiscal house is in order. The first step in that legislative and public policy process is to end the arbitrary political process for funding the PFD that was used starting in 2016 to this year when lawmakers turned to the 50/50 formula. However, a permanent, sustainable solution requires giving the people of Alaska a chance to vote on any change in the formula to be protected in the Constitution. I look forward to working with lawmakers and Alaskans on a long-term, sustainable fiscal plan,” Dunleavy said.
The budget documents are at this link.