Lawmakers Bicker as U. of Alaska Inches Closer to Historic Budget Cuts

Updated (7/10/2019, 9:27 p.m.) with results of an initial vote, reaction from several university leaders, other legislative developments, and analysis.

With the fate of a vast budget reduction for the University of Alaska hanging in the balance, state lawmakers who oppose the cuts delivered impassioned pleas to their colleagues on Wednesday to override the governor’s vetoes.

Alaska legislators have until late Friday to override Gov. Michael J. Dunleavy’s 182 line-item vetoes in the budget they passed last month. Dunleavy’s cuts would wipe out 41 percent, or $130 million, of the university system’s state funding for the 2020 fiscal year. Lawmakers took a vote on an override on Wednesday, and it failed to get the 45 votes required to succeed. But it was a largely symbolic vote, as only 38 of the 60 lawmakers were present in Juneau, the state’s capital. The margin was 37 to 1 in favor of the override.

The legislature could vote again by Friday. In the meantime, university leaders say they’re planning for the funding debate to drag on past this week. But as the new fiscal year has already started, the officials will have to make some cuts right away, if the override effort fails.

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Complicating the budget fiasco was that two-thirds of the state’s lawmakers were in one place, and one-third were in another. Dunleavy said last month that a special session to consider the vetoes would take place in Wasilla — his conservative home town — and suggested a middle school as the venue. He said legislators had spent enough time in Juneau and needed a change.

About a third of the lawmakers — mostly Republican supporters of Dunleavy who oppose the override — heeded his call and headed to Wasilla, while the rest stayed in Juneau, which they argued was the only appropriate place for the session. As floods of emails and calls continued to warn of the dangers of the budget cuts, the two camps dug in their heels and refused to move.

On Wednesday, as floor debate went on in Juneau, protesters in Wasilla disrupted the other group of lawmakers, who were meeting in the middle school. Activists chanted and sat in the lawmakers’ seats. Eventually, those lawmakers left.

“They appear to be of another mind and in another place — both physically and from a policy perspective,” said James R. Johnsen, the university system’s president, in an interview on Wednesday.

‘A World of Hurt’

Anxiety continues to run high for Johnsen and other university leaders. Professors are wondering whether their jobs will be safe. Students are worrying about the state of their programs when classes start next month.

“I worry for the students we serve,” said Richard Caulfield, chancellor of the University of Alaska Southeast. “They’ve invested their time, money, and hopes into the university system.” If the budget cuts stand, he said, “there is no way in which those cuts will not have a dramatic impact on faculty, on staff, and on the programs that those students are enrolled in.”

Some students were sent letters by the state on Tuesday warning that they will probably lose their publicly funded scholarships, due to an earlier failed budget vote in the Legislature that’s not related to the current debate.

Students who were counting on those scholarships “are seeing their financial aid evaporate” weeks before the semester begins, said Maria Williams, a professor of Alaska Native Studies and of music on the Anchorage campus. “They’re in a world of hurt,” said Williams, who is also chair of the University of Alaska Faculty Alliance. Some, she said, “are starting to apply to other universities.”

Daniel M. White, chancellor of the flagship campus, in Fairbanks, said that if the override effort failed this week, lawmakers could approve a one-time allocation to the university. The danger, of course, is that the governor could once again veto it. And even if the university got that money, Johnsen said, he doesn’t expect it to be much.

White said he expected the budget cuts to involve “a drawn-out process” and that any program cuts on his campus would probably happen in the spring semester.

His message to faculty members who might be considering leaving, he said, is to “hang tight — this is not the time to give up on the university, or to give up on Alaska.”

In a message to students posted on Facebook, White said the university would look different next year as it repositioned itself to become more efficient. He urged them to be “part of the change and look for opportunity in uncertainty.”

Johnsen said he believed the lawmakers who were holding out in Wasilla would travel to Juneau “soon.” But if an override didn’t happen this week, he said, he would on Monday present plans to the university system’s Board of Regents for absorbing the $130 million in cuts. He will also propose a declaration of financial exigency, which would allow the universities to more easily cut programs and tenured faculty members.

“We can’t wait,” he said. “We’ve got students showing up.”

‘Save Our State’

There are three options for managing the huge budget cuts. One, Johnsen said, is to ask each of the system’s three universities to figure out what they would cut. That would be a challenge. “The numbers are so big,” he said, “it’s questionable whether the campuses would be able to accomplish those reductions and remain viable.”

The second option would be to close regional campuses. The third is already being discussed by the university’s board, he said, at the urging of the Legislature: Consolidate the three universities into one.

If there is no override of the budget cuts, Johnsen said, university leaders would spend the rest of the month assessing those options more fully and then reporting back to the board on July 30.

He implored lawmakers to be open to gradual reductions in the university system’s state funding “that are predictable and that are manageable,” instead of one sudden big hit.

The system has already laid off 1,200 employees over the past five years, he said. He estimated that 2,000 more would have to be laid off as a result of a budget cut this large, given the future’s expected enrollment declines and lost tuition revenue.

Thousands of Alaskans have attended rallies against the cuts in the past few days, imploring lawmakers to “Save Our State.” They shouted “override” 45 times — one for each override vote needed. A famous rock band from Wasilla — Portugal. The Man — even made an appearance in Anchorage.

Dunleavy’s vetoes would cut $444 million from the state’s budget. Higher education would take the biggest hit by far, but his actions would also slash funds for Medicaid, early education, legal services, and other public-assistance programs.

Dunleavy maintains that cuts are needed to help plug a state deficit without raising taxes or reducing the payout each resident receives from a state fund that draws from oil and gas profits. He has vowed to increase the payout from $1,600 to $3,000 for each Alaska resident. Some residents who are counting on those checks have been pressuring lawmakers not to overturn Dunleavy’s budget cuts.

Mouhcine Guettabi, an assistant professor of economics at the University of Alaska at Anchorage, has warned that the cuts, if sustained, could plunge Alaska back into a recession.

An analysis he co-wrote found that cuts in the university system would account for about 2,000 of the 4,200 jobs that could be lost. That considers both university layoffs and indirect job losses resulting from reduced spending by those affected.

‘Significant Risk’

Among those urging lawmakers to reconsider the budget cuts was the president of the university’s accreditor, the Northwest Commission on Colleges and Universities.

The proposed cut for Alaska’s public higher-education system “poses a material and significant risk to the quality of education” for its students, wrote the commission’s president, Sonny Ramaswamy.

“If student success and achievement are demonstrably affected, it could potentially jeopardize the accreditation status of these institutions,” he wrote. If a university loses its accreditation, its students will no longer be eligible for federal financial aid, which would be a devastating blow to any university.

“Failure to properly fund these institutions could have disastrous effects, including the potential loss of accreditation, that could be felt for generations,” Ramaswamy wrote.

When universities experience significant cuts in funding or eliminate academic programs, they are required to report to their accreditors about the expected impact of such changes.

The university system is made up of three separately accredited universities, based in Anchorage, Fairbanks, and Juneau, with 16 campuses spread out over a geographically enormous and diverse state. Some have argued for consolidating the three into a single accredited university, while others have said that the state’s different regions have unique needs and challenges that couldn’t be met by a single accredited institution.

Ramaswamy reminded lawmakers that the university system has been hit with repeated budget cuts for much of the past decade, and has responded by consolidating programs, using more online technology, and joining forces with the private sector to deliver critical programs in health care, education, and other areas that are particularly important to Native people.

During recent evaluation visits to the University of Alaska Southeast, whose main campus is in Juneau, the accreditor reported that faculty, staff, and administrators were developing innovative approaches to dealing with the budget challenges. Their efforts have helped improve retention and graduation rates, Ramaswamy wrote.

In an interview on Wednesday, Ramaswamy said he had decided to speak out before the override vote after considering the University of Alaska Southeast’s progress in dealing with declining enrollments and budget cuts. The commission voted last month to renew the university’s accreditation, he said, and the accreditor sees its role as supporting, not “beating up,” a university that’s making progress in tough times.

“I thought quite a bit about when to say something,” he said. “Do we wait for something to be done and say, ‘Oops, we should have done something sooner,’ or do we inform people about the intended and unintended consequences” of such draconian cuts? “At the end of the day, the authority we have from the Department of Education is about protecting the interests of the students.”

Natasha von Imhof, a Republican state senator from Anchorage, said during floor debate in Juneau on Wednesday that she “can’t fathom why the governor is purposely throwing Alaska into a recession” at a time when, she said, the state can afford to avoid it.

People who are looking forward to $3,000 checks may be surprised to find that their universities, roads, preschools, and social services will be decimated, she said. “You’ll have $3,000 in your pocket,” she said. “You’d better make it last because it’s all you’ll have.”

Ivy Spohnholz, a Democratic member of the House, said that with a third of the state’s lawmakers missing, any override vote would be symbolic. Those who stayed in Wasilla, she said, “failed to make a courageous decision. It’s difficult to stand up to your party, to your governor, but the cost to the state of Alaska is huge.”

Sarah Brown writes about a range of higher-education topics, including sexual assault, race on campus, and Greek life. Follow her on Twitter @Brown_e_Points, or email her at sarah.brown@chronicle.com. Katherine Mangan writes about community colleges, completion efforts, and job training, as well as other topics in daily news. Follow her on Twitter @KatherineMangan, or email her at katherine.mangan@chronicle.com.