While I know not everyone agrees with me politically, one thing I hope we can agree on is that the past few years have been unlike any other in Alaska’s history.
From a 7.1-magnitude quake in 2018 before I took office, to the most expensive wildfire season in state history in 2019, followed by the worst pandemic in more than a century in 2020, we’ve faced some challenges that are downright biblical.
Alaskans are tough, we are resilient, and I’m proud that we’ve faced these challenges together. We’ve been knocked down, and we’ve gotten back up.
Like any family, we’ve also had our arguments along the way. A $1.6 billion-deficit when I took office led to painful conversations about deficits and spending, and the size of the PFD. Nor was Alaska an exception to the passionate disagreements about how best to respond to the pandemic.
Today, Alaskans are facing new challenges with inflation at a 41-year high and record energy prices driving up costs everywhere from the gas station to the grocery store.
We’re also dealing with a federal administration in Washington, D.C., that is determined to prevent us from developing our vast natural resources that would create jobs and lower energy costs for Alaskans and our fellow Americans.
Turning from natural disasters and extremist policies that are difficult if not impossible to change, the budget I signed on June 28 reflects what we Alaskans can control.
First, the PFD in this budget is projected to be the largest in state history. No matter what their financial situation, it will be Alaskans, not the government, who will decide how to spend this money that will represent a $2.1 billion injection into our economy. Another $330 million in municipal school bond debt relief will help taxpayers and local governments as we continue to emerge from the pandemic.
Second, we are rebuilding our savings accounts that were nearly drained when I took office. Based on current projections, we’ll be able to put $1.7 billion into the Constitutional Budget Reserve, use additional surplus to fund K-12 education for the 2024 fiscal year, and put more than $340 million into the Higher Education Fund. Combined with royalty back payments to the CBR, we’re saving about $3.6 billion.
Third, we’re investing in infrastructure to address some of our most vital needs for our ports, harbors, airports, bridges and roads. After years of minimal capital budgets, these projects will create jobs, facilitate economic activity and growth, strengthen our state, and position us for future opportunities from the North Slope to Southeast.
Fourth, we’re holding spending in check. The state operating budget, which has traditionally been the most difficult place to find reductions, reflects my efforts since taking office to make government more efficient.
Excluding our debt service payments, and the increased resources we’ve placed into education and public safety, all other state agency spending is down 10% from the budget I inherited in 2019.
Spending restraint applies to my office as well, despite what you may have heard. Day-to-day operating expenses are down 4.5% from the budget I inherited. One-time spending this year in my office includes $1 million to establish a state infrastructure office to coordinate our efforts managing the massive federal bill that passed last year, and $1.3 million for election security efforts.
I’m a small government guy, but that means I believe government should stick to its core responsibilities that include public safety, education, and infrastructure.
I’ve been working on a bipartisan basis on education reform since I was in the Legislature, and I was pleased that worked paid off as 41 legislators from across the political spectrum approved the Alaska READS Act, which links accountability in outcomes to increases in spending for the first time.
Our public safety efforts have been paying off since we started my term by repealing the disastrous Senate Bill 91. Crime rates have fallen, in some cases to historic lows, and our State Trooper numbers continue to increase.
We have 41 more troopers than when I took office, 10 more Village Public Safety Officers, and another full Academy starting soon in Sitka that will add dozens more troopers and VPSOs to our ranks.
Finally, we accomplished all of this without raising taxes.
There was broad recognition from legislators and myself this year that this revenue windfall must be transferred back to the people who are paying for it through high energy prices. In the long run, more production, not higher prices, is what Alaska and the rest of America needs right now.
There was also broad agreement on saving this windfall, while making necessary investments in infrastructure, education and public safety. Beginning to refill the CBR and forward funding education are responsible steps to guard against the next downturn in prices.
We’re in an election year, so broad agreements in Juneau may be short-lived. To the everyday Alaskans we serve: I’m proud to say this budget does represent significant actions achieved on a bipartisan basis that will pay positive returns both now and in the future.
Mike Dunleavy is the 12th governor of Alaska.