‘It’s gonna kill this community’: Cordova and others in the state brace as governor guts budget

CORDOVA — The fishing town of Cordova, perched next to the Copper River Delta in Prince William Sound, is no stranger to the cycles of catastrophe, hardship and recovery.

Within living memory, this marine-dependent community of 2,316 people has seen the collapse of the salmon market in the 1950s after overfishing by canneries; the 1964 Good Friday earthquake, which raised the sea floor by 6 feet, decimating the town’s precious razor clam beds; the ecosystem- and economy-wrecking Exxon Valdez oil spill of 1989; and other calamities.

But residents say Alaska’s current budget crisis, which has pitted a Republican governor and his red pen against legislators — and inspired a bipartisan recall campaign — is unlike any threat they’ve ever faced. Cordovans are especially worried about cuts to the ferry system, their highway to the outside world.

“I’m very, very afraid — we’re all afraid,” said 66-year-old Sylvia Lange, an Alaska Native leader (Tlingit and Aleut) from Cordova who skippered a pioneering, all-female-crewed fishing boat in the 1980s and now, along with her husband, runs The Reluctant Fisherman restaurant and hotel.

The monthslong budget battle between Gov. Mike Dunleavy and the Republican-dominated legislature has been a complicated nail-biter, with the governor maneuvering to gut a broad spectrum of government-funded programs covering an Alaskan lifespan, from Head Start early education to senior benefits, and scores of things in between: Medicaid, cruise-ship pollution oversight, mental-health and homelessness services, a national-headline-generating 41% cut to state funding for the University of Alaska and more.

The governor made those cuts, in part, to fulfill a campaign promise to pay a full Permanent Fund dividend using the traditional formula, which this year amounts to about $3,000.

“The governor’s approach is tough,” said Matt Shuckerow, his press secretary. “But it’s necessary.”

Others disagree — vehemently — and some economists estimate Dunleavy’s cuts would lead to 4,000 jobs lost in the short term, plunging Alaska into recession.

“This is a dismantling of our state: economically, emotionally, morally,” said Kodiak Rep. Louise Stutes, a Republican who represents parts of Southcentral Alaska, including Cordova. “It’s unreal. It’s just stinking unreal.”

Also deeply cut in the ongoing back-and-forth between Dunleavy and legislators, and the most immediate threat to Cordovans: $43.6 million from the Alaska Marine Highway System, the state’s web of ferry routes, which forms a transportation backbone for coastal communities.

That cuts the ferry system’s budget by roughly a third, thinning service across the network all the way to its southern terminus in Bellingham, Washington. The current schedule shows big gaps from autumn until spring, including a seven-month ferry blackout between Oct. 1 and April 30 for Prince William Sound — meaning towns like Cordova, which has no roads to the outside world, will be isolated.

How isolated?

“Take away I-5,” said Republican Sen. Bert Stedman, who represents parts of Southeast Alaska, including Ketchikan and Sitka. “Then ask people in Western Washington how they like their transportation system.”

The ferry cuts, Cordova residents say, are a microcosm — just one example of what might happen statewide, across different sectors.

‘This ferry hauls everything’

Down by Cordova’s dense network of floating docks, where durable-looking seiners and gill netters park snugly together, a cast-metal statue of a fisherman in foul-weather gear punches his fist at the horizon — the town monument to sailors lost at sea. Some memorial plaques, with faded plastic flowers, are just a few years old.

Up on First Street, seasonal fishing crews and cannery workers jostle into the 111-year-old Alaskan Hotel and Bar, speaking Serbian, Somali, English and Tagalog. Next to the Alaskan, the three-story, boarded-up CoHo building stands like an economic tombstone. Across the street: the fresh-looking Cordova Center, home to city council meetings and the Cordova Northwind Quilters, and built in 2016 with long-awaited settlement money from the Exxon Valdez oil spill.

The two major topics of conversation in town these days: this summer’s salmon runs and the state budget.

“It’s coming at us on a lot of fronts,” Lange said. “Our community medical center is under serious threat with cuts to Medicaid funding. Our school is looking at the state reneging on its promise to help with 50% of its bonds.”

But the ferry is the most urgent.

Mayor Clay Koplin thinks comparing Cordova’s ferry to Seattle’s I-5 might be an understatement. Without outside roads, railroads or a major airport, residents rely on ferries for almost everything, including occasional Costco runs to Anchorage, often coupled with trips to see a doctor.

“For us, the marine highway is basic infrastructure,” Koplin said. “It’s not only how we move people, it’s how we move food, services, freight.”

Weather permitting, Cordova has two flights a day (one northbound, one southbound) from its Merle “Mudhole” Smith Airport, and barges can bring some nonperishable goods — but they’re expensive. And some coastal towns, like Angoon on the Inside Passage, don’t have an airstrip or commercial barge landing.

“I guess the governor is OK just leaving them isolated,” Rep. Andy Josephson, a Democrat from Anchorage, said. “To some, it’s got to be a fatal blow.”

Koplin ticked off a list of things the ferry shuttles back and forth: groceries; lumber; plumbing; trucks; snowmobiles; fishing boats; seafood from small, local producers like 60° North (who ship too much fish for air transport, but not enough to justify a 43,000-pound cargo container); furniture; computers; the regional mammogram van; things you can’t check on an airplane (fire extinguishers, chain saws, stove fuel); other hardware and consumables necessary for the metabolism of a functioning town — and pregnant women in their third trimester.

“Here in Cordova, there is no option for a planned hospital birth, no practicing midwives and no road out,” said Amanda Wiese, a lifelong Cordovan whose third child is due in a few weeks.

Expectant mothers, she explained, are required to go to a hospital, usually in Anchorage, at 36-37 weeks and wait for the baby.

With the ferry, she could take her car, loaded with whatever she’d need for the next five weeks, plus a companion, for around $750. Flying, plus a rental car for the duration, would cost between $4,500 and $6,000. “You have to go to different doctor’s appointments around town,” she said. “Not having a car is not an option.”

Earlier this year, Wiese and her husband decided to put their house on the market and leave their childhood hometown.

“Honestly, my husband and I saw the writing on the wall when Gov. Dunleavy’s first proposed budget was released back in February,” she said. “As much as we don’t want to leave Alaska, with the radically slashed budget as it is, we feel it might be our best choice.”

Chantel Caldwell, who works for the nonprofit Copper River Watershed Project, is expecting her first child on Nov. 22 — in the middle of the proposed ferry blackout. She and her husband penciled out their options and found that going to Michigan, where her family is from, would be significantly less expensive than flying to have the baby in Anchorage.

Some of Caldwell’s friends are considering home birth. “But if something goes wrong, you’d be reliant on a Life Flight out — if you can get one,” she said. “Fall here is not known for great weather. I’d rather take the financial hit.”

Dr. Hannah Sanders, who practices in Cordova, worries about her patients. “For some, it’s absolutely a life-or-death issue,” she said. “I have patients who can’t fly on planes, people with chronic medical illnesses who need specialists, surgeries. It’s going to be a challenge for the community to pull together so not too many people will suffer — but people will suffer.”

Cordova, Mayor Koplin explained, has just begun to experience some growth after years in the long shadow of the Valdez oil spill, when businesses on Main Street were boarded up and the community drifted apart.

“This is a socioeconomic crisis,” he said. “Loss of the ferry is a pin that can hinge a community like Cordova back into decline.”

Commercial fisherman Kory Blake, who grew up in Cordova and has worked the Copper River Delta for 48 years, put it more starkly.

“This ferry hauls everything — it’s our road,” he said, sitting in his pickup outside the Alaskan, where his grandfather lived in a second-floor room with a view of First Street and the harbor below.

“Not having a ferry? It’s gonna kill this community.”

Vetoes, a schism and a recall effort

The most dramatic moment in the fiscal war came in June, when Dunleavy returned the Legislature’s budget — which offered a $929 Permanent Fund dividend — with an unprecedented 182 line-item vetoes totaling more than $400 million and his promised $3,000 PFD to each Alaska resident. (Last year’s PFD was $1,600, a reduced dividend amount set by lawmakers that diverges from the traditional formula supported by Dunleavy.)

“The governor has been forced to make a series of difficult decisions,” said Shuckerow, the governor’s press secretary. Without income or sales tax, Alaska relies on oil to pay the bills — but revenues have fallen from $9.9 billion in 2012 to $2.4 billion in 2018.

“The governor has taken an alternative approach,” Shuckerow said, “which requires cutting costs.”

To overturn the governor’s vetoes, the Legislature needed to secure a three-quarters majority within a five-day window. Adding to the chaos, Dunleavy had called a special session in his hometown, Wasilla, which peeled a handful of loyalists away from Juneau and frustrated the scramble to collect the necessary votes.

After Dunleavy’s vetoes and the Wasilla schism, murmurs about removing him from office began to circulate.

The Recall Dunleavy campaign officially launched Aug. 1 with three co-chairs: Arliss Sturgulewski, a former Republican state senator; Democrat Vic Fischer, the last surviving delegate to the 1955 Alaska Constitutional Convention; and Joe Usibelli, chair of the mammoth Usibelli Coal Mine. (Business groups, including the Alaska Bankers Association and the self-described “right-leaning” Alaska State Home Building Association, have also opposed Dunleavy’s budget.)

“People from all regions of Alaska have had enough,” Usibelli and his wife Peggy Shumaker wrote in an open letter. “Alaska Native organizations, educators, medical professionals, business leaders, bankers, environmentalists, Labor, arts organizations and nonprofits know we can do better.”

[Cook Inlet Region Inc. endorses effort to recall Gov. Dunleavy]

Which raises a persistent question: With such a broad, vocal coalition opposed to the governor, why is he doing what he’s doing?

“I don’t know what his endgame is,” said Rep. Adam Wool, D-Fairbanks. “A $3,000 PFD doesn’t help if your house loses $50,000 in value, your kid’s school is overcrowded and your wife loses her job.”

Wool and other legislators wonder if Dunleavy’s maneuvers inside Alaska are earning visibility and political capital in the Lower 48.

“President Trump has flown through Anchorage a lot to refuel on his way to and from Asia and they meet every time for photos ops and private conversations,” Wool said. “They buddy up. Dunleavy sent Alaska National Guard troops down to the Mexican border in a symbolic gesture to say: ‘I support what the president is doing.’ If Trump gives him a cabinet position, none of us will be terribly surprised.”

And in May, Americans for Prosperity, a conservative/libertarian advocacy group founded by the Koch brothers, organized and sponsored a series of meetings across the state for Dunleavy to discuss his vision for Alaska’s fiscal future.

Dunleavy also hired Donna Arduin, who has worked with governors in other states (including Jeb Bush in Florida and Arnold Schwarzenegger in California), as director of Alaska’s Office of Management and Budget. Arduin is also part of Arduin, Laffer and Moore Econometrics, a consulting firm including Arthur Laffer (sometimes called “the father of supply-side economics”), who advised Kansas Gov. Sam Brownback during the 2012 “Kansas experiment” in cutting taxes and government services.

[As Alaska’s budget uproar rolls on, top Dunleavy adviser Donna Arduin has seen it before]

“Arduin is a paid budget assassin who’s been paid to come here, do all the cuts and then move on,” Wool said. “But the recall effort is gaining steam.”

Arduin did not respond to interview requests, but explained her budget work in a 2006 Duke University alumni profile with a quote that would follow her: “I joined government to shrink it.” Dunleavy also did not respond to interview requests.

In Cordova, Sylvia Lange has been collecting Recall Dunleavy signatures at The Reluctant Fisherman. (To apply with the state’s Division of Elections, Recall Dunleavy must present 28,501 signatures, or 10% of the number of voters in the last general election. Organizers must gather 71,252 more to trigger a recall vote.) On Aug. 8, the campaign reported it had raised $25,000 and gathered over 18,000 signatures — almost two-thirds of the number required to clear the first hurdle — in a week, according to the Anchorage Daily News.

“Our governor is a true believer in Trump,” she said. “But the rest of us leading normal lives need state services: K-12 education, transportation, health care, arts. The burden of this budget crunch, and his intransigence against any taxes at all shifts the burden to locals.”

Unlike the state, Cordova has a sales tax (6%), as well as property taxes, but Mayor Koplin worries the town can’t survive hiking them any higher. Cuts in Juneau, he said, might require cuts at home: “I don’t think the community can tolerate the kind of revenue increases necessary to fully backfill the cuts in state funding.”

On Aug. 7, Alaska lawmakers sent the governor new legislation, which Rep. Josephson called the “are you serious?” bill, restoring most of the more than $400 million Dunleavy vetoed from the budget and a compromise PFD of $1,600. The governor has until Aug. 30 to act.

If he vetoes the bill, and the Legislature can’t summon a three-quarters majority to override, the budget cuts will stick.

“We’ve lived through man-made and Mother Nature-made disasters,” Lange said, looking out the windows of her home, which her family built inside a Cordova cannery that went defunct after the Valdez spill. “This one is mind-boggling because we’re doing it to ourselves.”