With funding levels still up in the air and a state operating budget left yet unsigned by Gov. Mike Dunleavy, the University of Alaska Board of Regents granted UA President Jim Johnsen authority to enact contingency planning funds in the case that there is no state funding approved for the university by July 1.
The board provided Johnsen such authority during a special meeting in Fairbanks on Wednesday morning organized to discuss potential contingency plans to handle whatever budget cuts may be looming in the university’s still murky future. These are the plans university administration will enact should Dunleavy veto the Legislature’s modest $5 million proposed reduction and implement his own, likely much larger, cut or should he fail to sign the budget prior to a government shutdown that would begin July 1.
In introducing the plans to board members present in Butrovich Building conference room and tuning in online from other areas around the state, Johnsen noted the awkward place in which the university sits at the moment.
“Where we sit right now is, of course, in a very uncertain place where we have the Legislature with a roughly 2% proposed reduction and the governor with a roughly 41% reduction,” Johnsen said. “That is an incredible range and it makes it extremely difficult to plan when you’re looking at a range that is that broad and we’re less than two weeks from the beginning of the fiscal year funded by that budget.”
The university has sustained about $195 million in cumulative budget cuts since Fiscal 2014. At this point, Johnsen said he would welcome flat funding, but understands that is unlikely.
“We simply cannot manage substantial cuts without impact on the university and the state. The threat is serious,” he said. “We can talk about program reductions, but our obligation to students does not go away just because we eliminate a program.”
As far as emergency stop-gap funding for core operations goes, if there is no budget approved by the beginning of the next fiscal year, the university could tap into it’s dwindling rainy day fund, which likely wouldn’t cover expenses for long, or could go into debt, also an unsavory option, Johnsen noted.
It is still unknown when Dunleavy will act on the budget. The governor has called the Legislature back into a special session beginning July 8 in Wasilla. If he vetoes parts of the operating budget, the Legislature will have five days at the beginning of the special session to decide whether they would like to, and can cobble together enough votes for, an override.
“One thing is certain, there is a lot of uncertainty,” said Wasilla Regent Darroll Hargraves during the Wednesday meeting.
The board has tentatively planned to meet again June 28 if there is movement on the budget. According to discussions as Wednesday meeting, if the budget is acted upon at the last minute, June 30 for example, an emergency board meeting can be called without any notice to members.
The next regularly scheduled full board meeting is scheduled for September in Anchorage.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.