Governor Dunleavy’s Budget Plan
Alaska Republican Governor Mike Dunleavy has unveiled a budget plan that includes a $3,400 oil-wealth dividend for residents in the coming year. However, the budget does not include any increase in per-student K-12 school funding. Dunleavy, a former educator, expects education discussions to take place during the upcoming legislative session. The budget plan also includes funding for staff to address a backlog in food stamp benefits.
Challenges and Choices
Governor Dunleavy has criticized the federal government and groups that have opposed oil, mining, and other development projects. He argues that these challenges have left the state with difficult choices, such as making budget cuts, imposing taxes on residents and businesses, or reducing the size of the yearly dividend. Alaska currently has no state sales tax or personal income tax, and lawmakers have long discussed the need for a fiscal plan that moves away from the state’s reliance on the volatile commodity of oil.
The Yearly Dividend Debate
At the center of the fiscal plan is the question of how much the yearly dividend should be. Until 2015, the dividend was paid according to a formula that many lawmakers now view as unsustainable and unaffordable. Since then, the amount has been determined by what can gather enough votes to pass a budget, often overshadowing other issues. This year’s dividend was $1,312, with a potential for a bonus check of up to $500 next year if oil prices exceed forecasts. Governor Dunleavy has proposed a dividend for next year at approximately $3,400 per resident, based on the formula last used in 2015.
The Budget Process
It is important to note that the budget proposal presented by Governor Dunleavy is just a starting point. Both the House and the Senate will have the opportunity to craft their own versions of the budget, which will then be reconciled through negotiations near the end of the legislative session. The House, with a Republican-led majority, has 40 members, while the Senate is controlled by a bipartisan majority and has 20 members.
Education Funding Disappointment
Education leaders expressed disappointment that Governor Dunleavy’s budget proposal did not include an increase in the school funding formula. Jharrett Bryantt, superintendent of the Anchorage School District, highlighted the struggles faced by Alaska districts in attracting and retaining teachers due to wages and benefits that cannot compete with those offered in the Lower 48 states. He emphasized that this directly impacts student outcomes and leads to larger class sizes.