Former Mat-Su state senator Mike Dunleavy became Alaska’s governor Mike Dunleavy at noon today. Dunleavy was sworn into office in Kotzebue after his plane to a Northwest Alaska village, Noovik, was unable to fly because of weather.
All of Dunleavy’s commissioners appointed as of Monday took over their new jobs that day.
As governor-elect, Dunleavy had been busy over the weekend with matters related to the Friday, Nov. 30 earthquake in Anchorage, which caused damage but no injuries or loss of life. He worked closely with outgoing Gov. Bill Walker in an assessment of damage to infrastructure and coordination of state and federal assistance to Southcentral communities including those in the Matanuska-Susitna Borough.
Meanwhile, Dunleavy continued to build out his cabinet.
With the cliff-hanger Fairbanks House District 1 apparently settled, and won by Republican Bart LeBon by one vote, the state House will be working to get itself organized with selection of presiding officers and committee chairs. The Senate completed its organization earlier, selecting Anchorage Republican Sen. Cathy Giessel as president.
None of the new legislative positions are official until the new Legislature convenes in Juneau in mid-January, however.
Coming in the door, the new governor inherits a FY 2019 budget that is basically balanced thanks to higher oil prices and enactment of SB 26 earlier this year, a new law that shares Permanent Fund earnings with the budget. However, oil prices are now dropping and production is also down, so the hopes for a small surplus for FY 2019 may be premature. Despite that, the state’s fiscal situation is now far better than it has been in recent years.
The state Department of Revenue issued the annual revenue and production forecast on Monday, Dec. 3. With the expected draw from Permanent Fund earnings excluded, Alaska’s revenues, mostly from oil, are expected to be up $1.2 billion for FY 2019, the current budget year, and up $700 million for FY 2020, the budget year beginning next July 1. Earlier, a $700 million deficit had been projected for FY 2019 but thanks to higher oil prices the deficit will be eliminated and there could be a small surplus.
Meanwhile, the new governor continues building his new leadership team. On Monday Dunleavy named Doug Vincent-Lang as Acting Commissioner of Fish and Game, and late last week he named Bruce Tangeman, a former deputy revenue commissioner, to head the Department of Revenue, and Julie Anderson, an Anchorage business consultant, as Commissioner of Commerce and Economic Development.
Dunleavy also said he will retain Michael Johnson as Commissioner of Education.
Tangeman was a revenue deputy commissioner for tax and was deeply involved in changes in the state’s complex production tax law in 2012 and 2013. More recently he worked with the state-owned Alaska Gas Development Corp. as a finance and commercial manager, and mosty recently as a fiscal policy advisor to the Senate Republican Majority.
Anderson is with Denali Management Services in Anchorage and previously worked with the Alaska Energy Authority and Alyeska Pipeline Service Co. Vincent-Lang is a fish and game department veteran with a background in wildlife and sports fish management.
Earlier, Dunleavy named Donna Arduin as his budget director and head of the Office of Management and Budget. An import from the Lower 48, Arduin is well-known in national conservative circles and has advised several Republican governors. Until her appointment she headed Ardiun, Laffer & Moore Econometrics, a consulting firm.
Dunleavy also names Jonathan Quick, chief of staff to Kenai Borough mayor Charlie Pierce, as Commissioner of Administration; Adam Crum, a vice president of Northern Industrial Training in Palmer is Commissioner of Health and Social Services; and Jason Brune, Cook Inlet Region, Inc.’s director of land and resources, will be Commissioner of Environmental Conservation.
Earlier, the new governor had appointed Tuckerman Babcock, head of the state Republican Party, as Chief of Staff; Corri Feige is Commissioner of Natural Resources and John MacKinnon as Commissioner of Transportation and Public Facilities.
Feige is a past director of the state Division of Oil and Gas. MacKinnon, until recently head of the Associated General Contractors’ Alaska chapter, is also a former deputy commissioner at DOTPF.
Also, Anchorage Assemblywoman Amy Demboski will take a position as Deputy Chief of Staff under Tuckerman Babcock. Demboski, known locally as a conservative firebrand, resigned her seat on the assembly and is giving up her afternoon radio talk show. She represented the Chugiak area north of the main city area.
During his campaign, Dunleavy made promises to cut the state budget and to issue larger Permanent Fund Dividend, or PFD, checks to citizens. Alaskans will now be watching closely to see how these commitments are fulfilled.
Specifically, the new governor made promises to “fully fund” the PFDs in the future according to a state statute that sets out a formula for calculating the dividend and to issue retroactive PFD checks for the amount of the dividends in 2016, 2017 and 2018 that were below the formula amount. This year’s PFD was set at $1,600 by the Legislature. Had the formula been followed it would have been $2,900, according to an analysis by Juneau economist Ed King. The PFD for 2019 would be $3,007 if the formula is followed.
To fulfill this promise Dunleavy will have to persuade the Legislature, however, because while the state’s executive can propose spending only the Legislature, under the state constitution, can actually appropriate funds.
As for “fully funding” the PFD, basically the statute sets a formula for how the dividend is calculated if the Legislature approves one. The formula provides that half of the Permanent Fund’s realized (cash) earnings averaged over the previous five years, are paid out in PFDs.
However, this is not a guarantee that the formula amount will be paid because only the Legislature appropriates funds, despite the formula in statute says. In 2017 and 2018 lawmakers appropriated less than what the formula amount specified, and Gov. Bill Walker vetoed part of the appropriation in 2016.