After all the dust has settled, how much is the state of Alaska really spending in the current budget year? How does it compare with last year? How much more is it than Gov. Mike Dunleavy proposed in his shocker of a budget last February?
Despite all the political noise the actual reduction is relatively modest compared with what was expected, and Dunleavy’s vetoes were modest, again compared against expectations.
According to the final budget numbers assembled by the nonpartisan Legislative Affairs Agency, the spending plan approved for Fiscal Year 2020, the budget year that began July 1, is $390 million below Fiscal Year 2019, the budget year that ended June 30.
However, it is about $600 million over what Dunleavy proposed last February, a plan that kicked up big squawks. Late in the legislative session the governor had a hand in reducing the final spending with his veto actions but he did not go as far with his vetoes as some expected.
To get an apples-to-apples comparison, the FY 2019 totals considered should not include supplemental appropriations made this spring by the Legislature. These are budget adjustments, typically increases, which occur because of unforeseen expenses, wildfires being one example. This spring there was $73.1 million in operating budget supplemental appropriations for the FY 2019 budget.
There are as yet no supplemental requests for FY 2020, so it is proper to compare the total FY 2019 spending minus supplementals with the FY 2020 approved spending, which do not yet include any supplemental requests.
In that comparison, total operations spending for state agencies and various non-agency programs, totaled $4.18 billion for FY 2020 compared with $4.570 billion for FY 2019, the previous year, with the $73 million in FY 2019 supplemental appropriations subtracted so the comparison could be made apples-to-apples. The reduction in the current year compared with last year is $390 million.
With his vetoes the governor reduced the current year spending by about $200 million in spending, but the total of $4.1 billion, which the governor approved, is still $589.6 million above what he proposed in in his budget last spring, which was $3.59 billion in unrestricted general fund spending.
State capital budget spending, mostly for construction, is not included in the totals above, which are for operations. As the FY 2020 budget was finally approved the state general funding spending for capital projects totaled $144.3 million, down from $168 million in FY 2019. However, the bulk of the state capital budget consists of federal funds that finance major infrastructure projects like highway and airport improvements, and these were actually up a small amount for FY 2020. However, the total for all projects in the capital budget is $1.275 billion for the current year compared with $1.569 billion last year.
The federal money is mostly for specific projects included in the state’s long-range transportation plan. The state general fund dollars, which are reduced this year, provide the necessary state “match” for the federal money but also pay for routine maintenance on certain facilities, like public buildings, that are the state’s sole responsibility.
Steady reductions in state dollars for the capital budget means that a lot of deferred maintenance on buildings is not done and in fact increases. The state now has a backlog of about $2 billion in deferred maintenance on buildings, half of this it the University of Alaska. The backlog is growing by $150 million to $200 million a year, according to estimates by the state’s Office of Management and Budget.