PALMER — Residents and employees at the Alaska Veterans and Pioneers Home in Palmer received a dire warning late last week as the Legislature grappled with the state's $3 billion fiscal gap.
More than $6.5 million in state Senate budget cuts could shutter Palmer's state-subsidized senior facility by the end of the summer, according to an email from the director of the Alaska Pioneer Homes Division.
The planning for the Pioneer Homes stems from the latest round of budget-fighting between Alaska Gov. Bill Walker and the Senate, which subtracted $5.7 million from the homes' budget in their latest spending plan approved last week.
Leaders of the Republican-led Senate majority have been battling Walker's administration for the past two years over so-called "unallocated reductions": lawmakers reduce the state budget without specifying programs to be cut, forcing the executive branch to decide instead.
Walker's administration has opposed the technique, saying lawmakers are responsible for determining spending levels themselves.
But the effect of the Senate's latest budget proposal is to give the administration a choice.
It can interpret the budget literally and apply the $5.7 million cut directly to the Pioneer Homes. Or, as the Senate has suggested, it can treat the cut as an unallocated reduction and spread the $5.7 million across other areas of the health department.
Legislative budgets are traditionally tightly written to stop cuts to one area of a department from being applied to another, but the Senate wrote special language into its spending plan this year to give Walker's administration more flexibility.
Similar cuts — $16.8 million in total — were written into specific areas of other agency spending plans, as well as for the state university system and the Legislature's own budget.
Walker's administration is refusing to spread the cuts across the departments, saying that lawmakers should be specifying programs to reduce.
Walker himself took to Twitter on Monday afternoon: "I want to correct some misinformation that has been circulating about the Pioneer Homes. My budget includes funding for them."
The Senate already proposed additional cuts to the state health department for next year, leaving few options for further reductions, said Pat Pitney, the director of Walker's Office of Management and Budget.
"All of them are bad choices and they've specified their choice," Pitney said in a phone interview. "That's their budget, and it's their responsibility to allocate it."
Senate leaders argue that Walker's administration is deliberately inciting fear among Alaskans about a budget process that isn't finished. Differences between the budgets passed by the Senate and the House still must be negotiated in a conference committee, and the House's proposal kept the Pioneer Homes' budget intact.
The topic surfaced during a hearing Monday morning of the Senate Finance Committee, where committee co-chair Anna MacKinnon assured members that no specific decisions have been made regarding the Palmer home.
Instead, MacKinnon said, the current budget identifies Alaska Pioneer Homes as a large area for discretionary spending in the Department of Health and Social Services. The bill doesn't direct the state to close the Palmer facility but provides language giving the Walker Administration "latitude for them to evaluate where those cuts should be."
"I would ask the people of Alaska to stay tuned," the Eagle River Republican said. "We are talking with the governor, wondering why they're actively pursuing this course of action."
Sen. Lyman Hoffman, the Bethel Democrat whose office writes the state operating budget, wouldn't discuss the Pioneer Homes when approached Monday.
He later called a reporter to deliver a statement criticizing Walker's administration and hung up without answering questions.
"In all the years that I've been working on the operating budget, I've never had one time where the director of OMB has come forward — before we start the budgetary process and the conference committee — and say that they are going to be doing something that's in a specific part of the state that hurts some of the most vulnerable people of Alaska. That's all I have to say on that issue," Hoffman said.
Alaska Department of Health and Social Services Commissioner Valerie Davidson said in an interview Monday that she authorized the email to "prepare residents for the worst" even though the closure is not certain.
The Senate's more than $6.5 million cut to the Pioneer Homes division can only be achieved by closing a home, Davidson said.
Palmer is the leading choice because it's the only one of Alaska's six Pioneer Homes with other housing options including placement at the Anchorage Pioneer Home or other facilities within driving distance of Mat-Su, she said. It's possible the Juneau Pioneer Home might also need to be closed to meet the budget target.
"To be frank, these are cuts that nobody wants to see," Davidson said Monday. "We recognize this puts families in a terrible position. Governor Walker is really going to fight to ensure that seniors aren't displaced from their homes."
Longtime Palmer resident Linda Combs, the city's deputy mayor and a member of the Alaska Commission on Aging, said worried texts and emails starting pouring in from staffers and relatives of residents late last week.
Combs and another commission member crafted a response pointing out that the Legislature hasn't specified any such cuts, the budget has yet to pass the House and Senate, and the Palmer home gets federal funding for veterans, complicating any closure.
"It's not definitive by any stretch of the imagination," she said Monday morning.
Sen. Shelley Hughes, R-Palmer, posted a message on Facebook over the weekend saying Davidson has the ability to move $25 million around in her budget.
"She and the governor can completely protect the Pioneer Homes if they choose to," Hughes wrote. "It is SO WRONG for this issue to be used as a political football to try to push an income tax and other taxes. So wrong to use our precious senior population this way."
Davidson on Monday said the Senate specifically proposed the cuts to Pioneer Homes.
"I think the Senate's intent was clear," she said. "If they didn't specifically want it in the Pioneer Homes budget, then they probably shouldn't have put it there."
Yes, the $25 million number is accurate, Davidson said. But the Senate cut another $38.2 million below the House budget proposal, she said, so under that budget version the DHSS cuts total more than she is authorized to "move around."
The first Pioneer Home was established in 1913, when a home for prospectors and other pioneers was created in an old U.S. Marine barracks in Sitka, according to a state website.
Built in 1971, Palmer's Pioneer Home is the only one of five state-subsidized homes around Alaska that also gets federal funding to take care of veterans. Seventy-five percent of the 79 beds in the facility are designated for veterans, according to its website.
There were 68 residents and 101 employees at the Palmer home as of March.
Donna Anthony's father, a Vietnam War veteran, finally got into the Palmer home in June after seven or eight months on a waitlist. The family gets regular updates on his care and condition.
Non-veterans wait up to two years to get a place in Palmer, said Anthony, a former Palmer police investigator who owns a firearms and self-defense training business.
If the facility closes, she and her sisters would need to find the next VA-approved location for him.
"He doesn't have much money," Anthony said. "It sounds like it's only Anchorage, but then what's that waiting list going to be?"