Senate Democrats continued to criticize Gov. Mike Dunleavy Monday, March 11, over his proposed cuts to seniors and other vulnerable Alaskans.

Dunleavy’s FY 2020 budget cuts the Department of Health & Social Services (DHSS) by about $800 million in unrestricted general funds (UGF) and federal funds.

DHSS contains programs that aid the most vulnerable populations of Alaskans.  One of those programs is the Alaska Pioneer Homes (APH).

Pioneer Homes residents must have a medical need to live in one of the six facilities statewide.  The average age of residents is 87, and over half require 24-hour care.

Dunleavy’s budget would cut UGF funding for APH by $18 million, more than 50 percent.

Members of the Senate minority said they are receiving concerned letters from Pioneer Homes residents after APH Director Clinton Lasley informed them that their rates will be doubled to compensate.

“It is incredibly difficult to listen to a constituent… who sits in the Pioneer Home worried, about in tears, about what happens next.  Will they get evicted?  Will they get kicked out?  Will they have to move to the Lower 48?” Sen. Scott Kawasaki (D-Fairbanks) said in a press conference.

Though AS 47.55.020 prohibits the State from evicting Pioneer Homes residents who cannot afford to pay, Kawasaki noted that residents with dementia may be unable to understand that or retain the information.

“Every morning when they wake up, they have to ask the same question, ‘Am I going to get kicked out?’  Because they just don’t understand what is going on with the potential place where they have lived for the last dozen years,” Kawasaki said.

Currently, the highest monthly rate at the Pioneer Homes is $6,795.  Under Lasley’s proposal, the top rate would be $15,000 per month for those with advanced conditions, like late-stage Alzheimer’s Disease.

“People that are suffering from Alzheimer’s and those kinds of things, my heart goes out to them,” commented Sen. Donny Olson (D-Golovin). 

Sen. Elvi Gray-Jackson (D-Anchorage) said she received a letter from a constituent whose wife will see such an increase.

“It makes me really sad reading that letter,” Gray-Jackson said simply.

She noted the top level of care at APH will now cost $180,000 per year.

“Let that number sink in,” Gray-Jackson told reporters.  “Maybe Governor Dunleavy’s OMB Director, Ms. Arduin, maybe she can afford it, but our seniors certainly can’t.”

Office of Management and Budget (OMB) Director Donna Arduin has become a popular target for the Senate minority due to OMB’s failure to justify its cuts.

Olson said Monday that Arduin has been “slashing the budget with a buzzsaw without any regard to the impacts and implications.”

“His budget is just unreasonable,” Olson said of Dunleavy.  “I think we’re always hoping that the governor will go ahead and come to his senses once he’s out of the spell of this OMB director that has him kind of handcuffed mentally from a financial standpoint.” 

Olson said a balanced budget has to include new taxes.  Instead, Dunleavy has sought to balance it through cuts alone, like the elimination of the $20 million Senior Benefits Payment Program that supports low- to moderate-income elder Alaskans.

“Eliminating Senior Benefits disproportionately hurts those elders that are out in rural Alaska, where you’ve got high energy costs, high food costs, transportation costs are significant,” Olson explained.  “What this budget does is rips off the life support of these elderly people and says, ‘Thanks for all you’ve done for us, but now, good luck.  You’re on your own.’” 

“This entire budget, not just the Health & Social Services part, has really sown uncertainty, anxiety, and fear amongst Alaskans,” Kawasaki said.  “This budget that is based on fear has really damaged, I think, the relationship that this government and the State of Alaska has with the people that it represents.”

Last week, OMB Chief Economist Ed King presented an economic analysis of Dunleavy’s budget that disappointed legislators from both parties because of its lack of specificity.  

“I think that there was no analysis done,” Kawasaki commented.  “I think that they looked at two numbers: income in and expenditures out.”

“I’ve never seen a governor do something like this,” Kawasaki said of the budget, pointing out it was released on the last possible day.  “I can’t even classify it as anything more than window dressing.”

“I think it’s an incredibly poor way to run a state and a government and a budget,” he concluded.

“There just seems to be a lack of vision, and you can’t lead without a vision,” Olson agreed.

In contrast to King, Institute of Social and Economic Research (ISER) economist Mouhcine Guettabi analyzed the budget and concluded it will cost the state more than 7,000 jobs, even with the positive impacts of Dunleavy’s proposed $3,000 Permanent Fund dividend (PFD).

“Are we headed toward a recession?” Kawasaki wondered Monday.

A loss of 7,000 jobs would more than offset the growth of 1,400 jobs the Department of Labor has forecast for 2019.

The PFD is likely to become a sticking point in budget negotiations, based on comments Senate minority members made.

“Reductions to the PFD particularly hurt rural Alaska,” Kawasaki noted.  “They particularly hurt the people who are in poverty, seniors, folks on fixed income, and children.  We are thinking about that as we proceed discussing this budget and what its implications are.” 

ISER research has shown a cut to the PFD would disproportionately hurt areas of western Alaska, which Olson represents.

“I don’t know of any scenarios that I would go for anything less than a full dividend,” Olson declared.

That could prove tricky, as a statutory PFD would cost $1.9 billion.  Senate majority members see at least a portion of that as money that could replace budget cuts while avoiding taxes.

Dunleavy, who supports a statutory PFD, holds line-item veto authority.  Any money the legislature adds to his proposed budget outside the PFD is likely to be struck.

The greatest opportunity legislators have is to pass a budget with 45 or more members in support, indicating there is already a veto-proof majority.

But the 15 members of the House minority are unlikely to vote for a budget much larger than Dunleavy’s. 

That means the Senate would need to unanimously pass a budget if they want to send a message to Dunleavy.  And that is assuming all House majority members support the budget, as well.

If surviving the veto is part of budget negotiations, Senate minority members will be placed in the awkward position of choosing how best to support vulnerable Alaskans- government programs or a full PFD.

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