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Dunleavy Addresses UA Board of Regents, Expresses Desire to Work Together on Reforms and Multi-Year Step Down

Aug 1, 2019

August 1, 2019 (Anchorage, AK) – Earlier this week, during a meeting of the University of Alaska Board of Regents in Anchorage, Alaska Governor Michael J. Dunleavy expressed his sincere desire to work together on reforming the University of Alaska system in the face of difficult, but long overdue budgetary changes. Dunleavy highlighted ongoing work and discussions between his administration and the University towards a multi-year, step down approach that focuses the University’s direction, lowers its overhead and administrative costs, and increases academic outcomes.

Excerpts from the Governor’s remarks to the Board of Regents. A full transcript can be read here.

  • “Over the last couple weeks we’ve been in conversation with University officials themselves, as to how we can partner to come up with a step down approach to get the University to where it needs to be funding-wise, but also help the University in this process with time and funding so the University can adjust to this new funding reality with regard from the State.
  • “My office has been and will be fully prepared to work with the University on an approach that can get the University focused in a direction that lowers its overhead and increases its outcomes, especially for its students and faculty engaged in research and teaching. We’re willing to continue these conversations.”

  • “Bills were passed yesterday that put the issue of the budget back in my hands, and I’m hoping that over the next few days, as a result of discussions that have occurred over the past two weeks, that we can come to an understanding in how we can help the University get to the point where it needs to be in order to be one of the best universities in this country – certainly one of the best universities dealing with Arctic issues and issues of the northern latitudes, in areas such as science and engineering and some other issues we wrestle with internally in the State of Alaska. I think the University could be on the cutting edge of being a partner in solving some of these issues and educating Alaskans.”

Office of Management and Budget Policy Director Mike Barnhill spoke to the Board immediately following the Governor to outline the status of ongoing discussions between OMB and the University. Data recently provided by the University suggested that the University of Alaska’s primary cost drivers are administrative overhead costs totaling $374 million of the University’s total budget. Barnhill suggested that efforts be focused on addressing these large costs.

“In the spirit of compromise, we came to invite the Regents to participate in an ongoing discussion with respect to adding funding to the FY20 budget and finding a path forward. We look forward to an open dialogue and further discussions moving forward,” said OMB Policy Director Mike Barnhill.


Additional Background:

Reports from 2008, 2011, and 2017, have all called on the University to begin making structural reforms based on inadequate program outcomes and the State’s budgetary uncertainty, among other reasons.

On February 13, 2019, Governor Dunleavy proposed a $134 million reduction to the University of Alaska’s budget – representing 17% of the University’s total budget.

Subsequently, in a series of roadshow visits and meetings with Alaskans and the Legislature, the Dunleavy administration presented detailed methodology and justification for the changes – largely focused on aligning Alaska’s state contributions (spending on a per student basis) with with those of other land grant universities. Currently, University of Alaska system spending per student is among the highest in the nation ($16,391/ student in AK v. $7,642/student US average — 2017 SHEEO data).

On June 28, 2019, Governor Dunleavy line-item vetoed funding to the University of Alaska, which totaled approximately $135 million when combined with the Alaska State Legislature’s reductions.

In recent weeks, the Office of the Governor and UA officials has held numerous discussions about the future of the University. Governor Dunleavy and OMB recently extended the opportunity to provide additional funding – approximately $40 million in transition funds – that would allow the University to transition over multiple years.