Mike Dunleavy is heading into his first legislative session as Alaska’s governor, faced with trying to implement campaign promises involving politically thorny issues.<\/p>\n
During the campaign, the Republican former state senator said he wanted to reduce state spending and limit government growth. He said he wanted to pay residents a full dividend from the state’s oil wealth fund following years of reduced payouts and give them the amount they missed out on during those years.<\/p>\n
Dunleavy also said he wanted to repeal a sprawling criminal justice overhaul that he said the public had lost faith in. The legislative session starts Jan. 15.<\/p>\n
Budget<\/strong><\/p>\n Lawmakers have struggled in recent years with how best to address a budget deficit exacerbated by low oil prices, blowing through billions in savings amid gridlock before deciding in 2018 to begin using earnings from the oil wealth Alaska Permanent Fund to help fill the hole.<\/p>\n [State departments have an eye toward budget hikes]<\/a><\/ins><\/p>\n This was significant because, while legislators had long been able to take money from fund earnings, the same pot used to pay dividends, they were reluctant to do so for fear of being accused of raiding it.<\/p>\n Dunleavy’s initial budget draft works off the budget his predecessor, former Gov. Bill Walker, handed off before leaving office.<\/p>\n But it’s different from Walker’s plan in key ways: It is based on a more conservative oil price and calls for paying out a full permanent fund dividend this year. Most Alaska residents qualify for the annual check.<\/p>\n Dunleavy’s draft was billed as a starting point, released to comply with a statutory deadline that arrived less than two weeks after Dunleavy took office.<\/p>\n Dunleavy’s budget office said the draft leaves a $1.6 billion deficit.<\/p>\n During the campaign, critics said Dunleavy provided few specifics on what he would cut. During the last session, there was pushback that spending in some areas already had been cut too far.<\/p>\n Dunleavy is expected to propose amendments in the coming weeks. His budget director said all areas of spending are subject to review.<\/p>\n Incoming Senate Finance Committee co-chair Republican Natasha von Imhof said she was awaiting more details.<\/p>\n Democratic Sen. Bill Wielechowski suggested looking at eliminating or significantly reducing per-barrel oil tax credits to help ease budget concerns.<\/p>\n Dividend<\/strong><\/p>\n Lawmakers in 2018 passed a law that seeks to limit how much can be taken from permanent fund earnings for dividends and government spending but did not specify how the split should be made. Under the new law, a withdrawal of $2.9 billion is expected for the coming fiscal year, though critics have said legislators can ignore that. Dunleavy’s draft plan would earmark about $1.9 billion of that amount for dividends.<\/p>\n