UA president: Dunleavy veto unprecedented, ‘devastating’

Gov. Mike Dunleavy on Friday slashed $130 million in state support for the University of Alaska, a cut the UA president said could result in the elimination of academic programs, massive layoffs and tuition increases.

UA President Jim Johnsen said the university system will begin planning for the “devastating” and “unprecedented” reduction, while also advocating that the state Legislature overturn the governor’s line-item veto. State legislators have until July 12 to do so, but three-fourths of them would have to agree to throw out the governor’s cut.

“There’s no question this budget — if not overridden by the Legislature — would be devastating to the university and to our mission and to the state and to our economy now and for years to come,” Johnsen told the UA Board of Regents at an emergency meeting Friday.

Dunleavy’s veto of $130.25 million in state funding for UA is on top of a $5 million cut already approved by the Legislature. In total, that’s a 41% reduction in state support to the public university system compared to last year.

It’s the largest cut in the university’s 100-year history, UA officials said.

The veto was announced by Dunleavy on Friday, three days before the start of the state’s fiscal year. In total, Dunleavy cut $444 million from the state’s operating budget, slashing services beyond the cuts already made by the Legislature. Dunleavy said the cuts were necessary to balance state revenue with state spending without raising taxes or reducing the Permanent Fund dividend.

[Related: Gov. Dunleavy vetoes $444 million from Alaska state operating budget]

[Related: Here’s a rundown of Gov. Dunleavy’s line-item budget vetoes]

Dunleavy said UA cannot “be all things to all people,” and he believed the university system could work through the reduction.

“I do believe the University of Alaska is resilient. I do believe they have good leadership, and I’d say give them a chance,” Dunleavy said. “ I believe that they can turn the university into a smaller, leaner, but still very, very positive and productive university here in the northern hemisphere.”

John Davies, chairman of the UA Board of Regents, called the veto “completely irresponsible.” A cut that massive must be phased in over several years — not days before the fiscal year starts, he said.

“To ask us to take a $135 million cut in one year? It’s just beyond the pale,” Davies said. “Whole chunks of the university are going to have to disappear, that’s the only way we can possibly balance the budget. We don’t have any slush funds anywhere.”

Dunleavy’s veto is similar to the cut included in his budget proposal in February when he suggested axing $134 million in state support for UA. Still, Johnsen said, he didn’t expect a cut that deep after the budget worked its way through the state process. He said UA had planned for cuts up to $60 million.

"While severe, these were manageable,” he said. “The cut is more than twice the most extreme cut that we anticipated.”

The University of Alaska system includes the University of Alaska Anchorage, the University of Alaska Fairbanks, the University of Alaska Southeast in Juneau, community campuses and statewide administration.

This year, about 40% of UA’s budget came from state funding, and the rest came from sources that include students’ tuition and fees, research grants, donations and proceeds from land development.

According to a document distributed by the governor’s office, Dunleavy’s veto primarily impacts UAA and UAF, while funding for UAS and the community campuses remain intact. Johnsen, however, said that’s impossible since there are shared costs between campuses.

Johnsen didn’t offer specifics Friday about what would be cut to reduce UA’s budget by $135 million. He said “everything is on the table." The size of the veto equates to the elimination of roughly 1,300 full-time faculty and staff jobs, he said.

Immediately, Johnsen said, UA will freeze any travel and hiring. Also, all staff will receive furlough notices, he said.

In a letter to UA faculty, staff and students Friday, Johnsen asked them to join him in contacting legislators and advocating for a veto override.

If legislators don’t override the veto, UA regents are poised to declare “financial exigency” the week of July 15. That basically means UA’s expenses exceed its revenues, and it would allow for expedited cuts. For example, instead of providing tenured faculty a year’s notice of a layoff, the notice period is 60 days, Johnsen said.

The veto is a “major disruption” to students, Davies said. He said he had concerns about spiraling negative impacts such as the loss of tuition money from students who decide UA is too unstable and enroll in another university, and the loss of faculty members who decide to leave for jobs at other institutions, taking their research grants with them.

“It will be a giant downward spiral,” Davies said, “and it will take decades for the university to recover from that.”

ADN reporter James Brooks contributed to this story from Juneau.