Capital budget vetoes to hit homelessness, addiction treatment

Gov. Mike Dunleavy signing the capital budget on Thursday in Anchorage (Photo by Wesley Early/Alaska Public Media, Anchorage)

The capital budget signed into law Thursday by Gov. Mike Dunleavy puts well over $100 million to work around the state, and brings in nearly a billion dollars in federal money for infrastructure and transportation.

But it came with a caveat: $34,732,800 worth of line-item vetoes, many of them for programs that serve some of the most vulnerable Alaskans.

After those cuts were announced, many in Anchorage grew alarmed by the reductions to homeless services and addiction treatment, two major issues the city is struggling with.

Dunleavy’s vetoes to the capital budget include cutting $10 million that would have gone to build substance abuse treatment facilities around the state. The governor also struck $3.6 million from the Homeless Assistance Program, cutting it in half.

But according to Jasmine Boyle, executive director of the Anchorage Coalition to End Homelessness, those issues overlap in Anchorage.

“What we know is that homelessness is a catchall,” Boyle said. “We’re the catchall for the rising trend of domestic violence in our community. We’re the catchall for the rising trend of opioid addiction. If you are impoverished and you lose a critical service, you are more likely to end up in homelessness, and in our current state in Alaska, you are more likely to end up in homelessness in Anchorage.”

Boyle’s organization represents different nonprofits and service providers in the municipality. The funds vetoed for homeless assistance would have gone to organizations around the state, including many in Anchorage that assist in keeping families housed, as well as supportive housing for the severely disabled.

“It’s basically all of our shelters,” Boyle added.

Boyle was driving between back-to-back meetings Friday as organizations scramble to deal with the knowledge that they have about half the money to serve an increasing need, as nonprofits are seeing signs of distress among the poor, disabled, and elderly.

“The United Way is showing a significant increase in calls for people looking for resources for people to maintain their housing,” said Nancy Burke, Anchorage’s homeless coordinator. “Thirty percent was the number I believe I heard from the update.”

For years, Anchorage’s local politics has been consumed with problems arising from homelessness and policies to reduce it. Now, many of the areas that have seen the most success are the very ones paid for by the recently-vetoed funds. On top of that, the operating budget is still not finalized. And if the governor maintains his deep cuts, as he has signaled he likely will, that will mean further reductions to social services and housing assistance. More than a month into the new fiscal year, the uncertainty in funding levels has caused damage for nonprofits trying to write their budgets.

“This is just really destabilizing everything,” Burke said.

At his Thursday press conference signing the capital budget, Dunleavy said reducing state spending is critical in light of the drop in revenue from low oil prices.

“I’m under no illusions that the impacts of these reductions aren’t felt by Alaskans,” Dunleavy said during remarks. “They are. When you’re reducing budgets by the tune of hundreds of millions of dollars, it’s certainly going to have an impact on Alaskans and programs and services.”

The capital cuts run the gamut from small to large. A $5,000 clean-up project in Anchorage’s Mountain View neighborhood was struck. Also vetoed was $15,000 that would have gone to earthquake-proof library shelves in a children’s reading room in Kenai.

The biggest veto, though, is $10 million that would have gone to expanding substance abuse treatment facilities around the state. Anchorage Democrat Ivy Spohnholz co-chairs the Health and Social Services Committee in the Alaska House of Representatives.

“We heard from providers that they can bill Medicaid and insurance for addiction treatment, but they just can’t scale up to meet the need fast enough,” Spohnholz said. “Having capital money would get those facilities up and running sooner in order to ensure more people get the treatment that they need.”

According to Spohnholz, local governments would have matched funds to secure those state dollars.

“There are projects that are shovel-ready or near shovel-ready in the Mat-Su Valley, down on the Kenai Peninsula, up in Nome,” Spohnholz said.

Members of the media were directed to a statement posted to social media addressing the addiction treatment veto. It explains the money was vetoed because “the funding was not attached to specific plans or proposals,” and was not requested by a particular organization or state agency.

“That’s a disingenuous answer,” said Democrat Tom Begich, who represents the downtown Anchorage district in the state Senate.

Specifics for these kinds of projects come after the money has been made available, and organizations or municipalities can prepare proposals to bid on them, according to Begich.

He sees the capital budget vetoes, and the governor’s fiscal approach, as part of a strategy to reduce state spending by shifting the cost of services to local governments. But believes that issues like addiction and homelessness aren’t so neatly separated.

“I think it’s a philosophical debate: The governor perceives that local problems should be handled by local money. But our homeless problem is not local, it’s statewide. This is the hub city for the state. The residents who are caught up in the homelessness cycle are not just Anchorage residents, they’re folks from all over the state. So this really is a statewide issue that requires statewide focus,” Begich said.

Asked about the possibility of legislators overriding the governor’s capital budget vetoes, Begich and Spohnholz were not optimistic.

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