UA Budget

A UA Strong sign at the entrance to the University of Alaska Fairbanks campus on Alumni Drive seen Thursday afternoon, June 27, 2019. UA Strong has placed the campaign-style signs in key locations around Fairbanks in an effort to visually show support for the university ahead of today's UA Board of Regents emergency meeting and possible budget announcement.

The University of Alaska board of regents has moved its possible declaration of a financial crisis to Monday, citing the unresolved status of its state funding allocation for the current fiscal year.

Gov. Mike Dunleavy vetoed $130 million from the university's budget for the fiscal year, which started July 1. The Legislature failed to override the veto within the five days allowed by the Alaska Constitution, and continuing efforts to restore some of that money have not succeeded.

The cut to the university is part of the governor's veto of more than $400 million from the total state budget.

The board of regents on July 15 delayed a vote on declaring financial exigency until July 30 and had scheduled a meeting for Monday to discuss matters. A vote on financial exigency was moved to Monday after a discussion with UA President Jim Johnsen and some board members, regents Chairman John Davies said Friday.

The decision to move up the possible declaration of financial exigency follows Wednesday's announcement by Moody's Investor's Service that it was sharply downgrading the university's bond rating because of what it called an "unprecedented" reduction in state funding.

Davies said the Moody's decision was one factor in moving the crisis vote to Monday.

“There was a sense on the regents that maybe we could hold off on a vote for a while until we got some sense of a number," he said, "but the Moody’s thing and the increasing sense that there’s still essentially the same stalemate in Juneau and the realization this problem isn’t going to get resolved in the next month..."

Davies said the board of regents can't delay any longer.

"We have to have that decision in place before we start having major discussions about serious restructuring plans," he said.

A declaration of financial exigency would allow administrators to make rapid decisions in order to restructure the university to operate with sharply reduced state funding. For example, tenured faculty could be laid off with as little as two months of notice.

The cut to the university is actually slightly larger than the amount Dunleavy vetoed. That's because the Legislature had already reduced the university budget $5 million before sending the final state budget to Dunleavy, who then vetoed the $130 million to bring the total to $135 million — the amount of the reduction he proposed in his own proposed budget in February.

The university system has seen its budget reduced by approximately $195 million over the prior four years, resulting in approximately 1,200 layoffs and the loss of programs.

Johnsen has repeatedly said that a cut of the scale the Dunleavy has proposed, and which Dunleavy has made set to happen through his veto, will likely result in the loss of more than 1,000 jobs, the termination of multiple programs, and the probability of whole campus closures.

The university gets its funding from a variety of sources, including the federal government. The loss of $135 million in state funds is a 41 percent reduction over what the Legislature and former Gov. Bill Walker provided for the prior fiscal year, which ended June 30. The total university budget for the prior fiscal year, including all revenue sources, was projected to be $772 million at the end of the prior fiscal year.

Contact Editor Rod Boyce at 459-7585. Follow him on Twitter: @FDNMeditor.