State budget trimmed back close to size Dunleavy originally proposed



Gov. Mike Dunleavy today announced he is signing a budget that is about the same size as the one he proposed in mid-December.

He trimmed back two-thirds of the $314 million in additions that the bipartisan Senate and Democrat-led House put in for things like school bond debt reimbursement, community assistance, the university system, and public broadcasting.

With these vetoes, the FY 2021 operating, mental health, and capital budget, including previously enacted legislation, is $4.5 billion, which will be paid, in part, with $3.85 billion in federal funds.

Most of entities will qualify for federal funds through money that is coming in through the CARES Act, which is the major stimulus package requested of Congress by President Donald Trump to address the COVID-19 crisis. School bond debt reimbursement, for example, had $30 million added by the Legislature, but was cut in the final budget. However, the state can use the anticipated CARES Act money to shore up that line item.

The governor also vetoed the $1.5 billion that the Legislature had moved from the Permanent Fund’s Earnings Reserve Account to the corpus of the fund, where it would not be able to be tapped for spending this year. Dunleavy said that with so much uncertainty due to the COVID-19 crisis, it was more prudent to keep that money available to meet the needs of the state operations.

Gov. Dunleavy also called on the Legislature to come back out of recess and pass an additional PFD or stimulus check for Alaskans, who he said are reeling from the effects of a government-imposed economic crisis due to the COVID-19 virus response.

The current budget is predicated on oil prices that could remain in the mid $30s per barrel, far from what is needed to run state government. This, most analysts agree, will force a very difficult budget conversation next year.

The Permanent Fund is expected to transfer $2.9 billion to the general fund in FY 2020 and $3.1 billion in FY 2021, according to the Department of Revenue. These amounts include funds for both payment of dividends and general government spending.

Key programs and services funded in the operating budget, HB 205:

  • $99M to COVID-19 response and relief
  • $135.6M to Alaska State Troopers
  • $14M to Village Public Safety Officer Program
  • $5M to Disaster Relief Fund
  • $5M to Fire Risk Reduction Funding
  • $34.8M to Pioneer Homes
  • $54M to the Alaska Marine Highway System
  • $1.26B to fully fund Education Foundation Formula
  • $28.5M to Behavioral Health Programs
  • $7.2M to Homeless Assistance Program
  • $65M for Capital Federal Match Program to Highways and Aviation

Line-item vetoes include:

  • The reduction of debt payments on behalf of other entities, which are not a core function of the State while facing fiscal uncertainty;
  • A reduction in funding to the University of Alaska to the level agreed to in the 2019 compact between the University of Alaska Board of Regents and the Office of the Governor; and
  • The elimination of one-time State general funds for programs that may qualify for funding under the Federal CARES Act.
  • Elimination of the Alaska Marine Highway funding to install crew quarters on two of the ferries day boats.
  • Public broadcasting: Radio $2,036,600, TV $633,300.

Click here for FY 2021 budget items of interest.

Click here for additional information on the enacted House Bill 205.


  1. I love our Governor. I feel like he’s doing a better job than any Governor in Alaska since I was born, 56 years ago. There’s not much he’s done that I disagree with…. EXCEPT, not standing stronger against the “law-breakers” that would not honor his special session in Wasilla and those same “law-breakers” that have been disrespecting him since he was voted in. He’s a man of his word and has stayed the course of the platform he ran on. Keep it up Governor!!!

  2. Good Job Governor Dunleavy, two recommendations:

    1. Pay back 2019 PFD $1304.00 NOW!!!
    2. Pay 2020 PFD PER 40 year Statute in October…
    Hold the Budget hostage until the Legislature changes the 40 year Statute by a Vote of the People…
    The D in PFD stands for Dividend not an Appropriation. ?
    Thank You

  3. $100 million for the C-19 response with 23 people hospitalized and less than a half dozen dead?
    If anyone thinks someone is pocketing a bunch of money from this current crisis than you are probably correct.
    The medical industrial complex is bankrupting our country and this latest virus outbreak only goes to show exactly how.
    Less than 2 percent infected yet the entire economy is in shambles?
    Not sure how many years the federal government will fund AK’s state bureaucracy, but just like NY & CA…this year the check is “picked up” by the feds.
    “$4.5 billion, which will be paid, in part, with $3.85 billion in federal funds.”
    Where exactly is ALL this federal money coming from?

    • I agree with questioning where the heck this $99,399,999.00 (100 million dollars) is going for “Covid-19”. If it is going to line the pockets of the most profitable and STILL growing industry in our State (Health Care), then this is disgusting and wrong. That Covid relief number works out to about $125 per every living person in Alaska, except its not going to them, is it? And while you have your calculator out, do the math on law enforcement and other subsidized costs for a few straggling hold-outs in rural Alaska. We can’t afford this stuff anymore. Cut! And it is also time for the Corporations controlling land and mineral rights in rural Alaska to start footing the bill to support the people in those regions with the wealth that is being extracted.

  4. Gov. Dunleavy also called on the Legislature to come back out of recess and pass an additional PFD or stimulus check for Alaskans, who he said are reeling from the effects of a government-imposed economic crisis due to the COVID-19 virus response.

    I feel that this is the key and that the legislature needs to fund at the very least a full PFD and additional missing payments to bring us through the storm of COVID. We have been diligent while the over-bloated government has not reduced in any way. They need to take the same precautions as we have done and not receive pay for the same amount of time..

  5. Big Mike,
    Please do the following.
    Immediately order a 20% pay cut for you and all appointed positions within State Government.

    Order a comprehensive working group to quickly formulate a plan to reduce the cost of Government by merging State Divisions and eliminating Director/ Deputy Director/ Special aides to your office and so forth positions. Post a deadline for this task to be accomplished. Follow through with it prior to the start of the next fiscal year. Granted, the savings here will not balance the loss of oil revenue but it will set the tone during this economic Apocalypse. Recall that last week alone 14,000 people filed unemployment claims.

    Challenge the Legislative Body to follow your example. When did first year Representatives get staffers and an office? I can tell you Sir, prior to Oil wealth very few had staff and even fewer an office.

    I commend your leadership dealing with the UA system, however the 600 pound Gorilla in our midst is EDUCATION. Damn the Torpedo’s and RE-Call sappers Sir, do it for the Children!

    Thank you!

    • Oh please! You’re wanting Mike to fall on his sword when he isn’t the cause. Unemployment folks haven’t suffered a pay loss. Education didn’t get folks sick, nor did the government’s size. Its the programs that we could afford when oil was up, but can no longer afford are the problem. Yes, UAA should be shut down. Producing an 8% graduation rate is not a good return on our investment.

  6. He’s an interesting paradox. He can definitely count which appears to be outside the scope of our legislative corpus. He also seems to back down whenever challenged.

  7. Let’s cut some more. Not enough cuts. Like the libs say, never let a crisis go to waste. Give back to the people what was stolen from them.

  8. Not a good look, Gov. I was really hoping to see a full veto of this budget with a $1k PFD. Disappointing…

  9. Unless voters make some big changes in the Legislature this Governor will continue to be our only defense against state government growing ever larger, destroying our economy on the trip. Maybe it’s something in the drinking water in Juneau; Alaskans send sensible, reasoning people to Juneau. Then lobbyists, bleeding hearts, socialists, and especially the 80,000 government employees have their way with them. In one news report today Senator Olson had disparaging remarks about anyone who thinks the budget can be cut; Donny, it must be cut; we cannot pass the same dollars around and somehow believe that all the food, vehicles, clothing, chemicals and consumables that constitute our quality of life today will magically appear. Alaskans have no farms and factories but we consume as if we were the most productive people on earth. Dollars taken from the economy to spend on government necessarily take away from our productivity. It’s our production, and only our production, that supports the life we all enjoy. We cannot live on myth and misappropriation (someone please break this news to Bryce Edgmon). Finally we have a Governor who both understands this and is willing to do something about it.

  10. Cut more, and then cut some more. Oil is less than a third of what this budget can support. The time for cuts is right now.

    • @Steve-O You need to be in charge. You clearly have foresight and an intimate understanding of how to get ahead of the pending crisis.

      I can’t wait to wave goodbye to those Alaskans that have spawned often enough that their family PFD take is strategic and meaningful. Good riddance to them and other societal parasites that are shouting recall and the like.

  11. Wait until inflation hits from the $6 trillion the government prints, then our dividends are worth much less, the money would be better sooner then later, so smart people can prepare themselves and families for the very hard times ahead!

  12. Also the government should make it illegal to dump outdated food from the stores and make it available to the people out of work through charity organizations. If they didn’t have to buy so much food, they wouldn’t need as much money! But instead they waste as much as possible, can you imagine how much will be thrown away soon because people at home aren’t able to buy it before it is outdated!

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