Gov. Mike Dunleavy used his veto power to thwart a legislative effort to boost the state ferry system budget.
The governor cut almost $8.5 million from an overall appropriation of $190.7 million intended to cover the next 18 months of Alaska Marine Highway System operations.
The veto scales back the budget closer to last year’s level on a 12-month basis and frustrates legislative attempts to restore some of the service cuts under the governor’s administration.
This is the third budget Dunleavy has signed since he took office in December 2018, and the third time he has used his veto authority to reduce the Legislature’s spending plan for the ferry system.
Lawmakers this year, with the governor’s support, purposefully used tens of millions of dollars of federal pandemic aid to help cover the ferry system budget for 18 months, through Dec. 31, 2022, rather than the usual one-year end date of June 30, 2022, to allow more predictable scheduling and planning.
At a public event in Ketchikan this spring, Dunleavy said extending the appropriation to 18 months would help with ferry operations, “so that it’s not up and down one year to the next.”
Legislators used the opportunity of federal relief aid to restore a portion of the governor’s previous reductions to the ferry budget, but Dunleavy rejected the extra spending, cutting away the money as part of $215 million in vetoes of state spending announced July 1, the first day of the new fiscal year.
The budget item “was vetoed back to the amount that was in the Senate version of the bill, which is the amount we felt we had agreement on,” Dunleavy spokesman
Jeff Turner said in a July 1 email.
“The money that we discussed, the money that we agreed upon to put in the budget, is in the budget,” Dunleavy told reporters on July 1. “There was just more money on top. That was the money that we took off.”
A House-Senate conference committee that negotiated the final legislative spending plan last month added to the ferry system budget, bringing it closer to a larger appropriation the House had wanted.
“It was dismaying,” Ketchikan Rep. Dan Ortiz said of the governor’s veto.
“We’re trying to put the Alaska Marine Highway System on good, solid footing for the next 18 months,”
said Ortiz, who also represents Wrangell. “I’m happy to see he did not reduce it more.”
The veto will not have any immediate effect on ferry service, Ortiz said.
Robert Venables, of Haines, who served on a Dunleavy-appointed task force last year to consider long-term changes in ferry system operations, told the Anchorage Daily News that the additional money could have been helpful, but it’s not “debilitating” to lose the $8.5 million.
Ortiz commented that since the appropriation is for this fiscal year and half of the next year, the Legislature can try to add back the money when it convenes in January.
Or maybe before then. “I’m not saying the final verdict is there,” Ortiz said.
Because the governor also vetoed this fall’s Permanent Fund dividend — Dunleavy wants a larger payment for Alaskans than the Legislature appropriated — the House and Senate will need to adopt a new spending bill when they meet in special session in August to avoid a year without a PFD.
“You can do anything if you have an appropriations bill,” said Ortiz, a four-term lawmaker, who is a member of the budget-writing House Finance Committee.
Adding ferry system funding to an appropriations bill would require fewer votes than the three-quarters majority required for lawmakers to override the governor’s vetoes, though the special session focused on the size of the dividend will be contentious even without attempts to reverse Dunleavy’s budget cuts.
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