Health funding in Gov. Dunleavy’s budget proposal

Gov. Mike Dunleavy released his Fiscal Year 2022 budget package on Friday, trimming down government spending while also looking to pay out almost $5,000 in Permanent Fund dividends.

Dunleavy’s $8.9 billion total operating budget proposal includes $4.29 billion in unrestricted general funds (UGF). This represents a $207 million reduction (-5%) compared to the current year. The operating budget proposal also includes $875 million in designated general funds and $2.9 billion in federal funds.


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Along with the budget announcement, Dunleavy said he plans to put forth legislation for $300 – $350 million in general obligation bonds for infrastructure projects.

“To put Alaskans to work, I am proposing the first statewide bond proposal in nearly 10 years. This $300-350 million package would fund roads to resources, renewable energy projects, ports, harbors, runways, bridges and other essential projects. I will work with the Legislature and take this to a vote of the people this spring. Projects mean jobs now, and critical infrastructure for all Alaskans,” said Dunleavy in a press release.

The proposal includes full PFDs in the next fiscal year as outlined under state law, as well as a supplemental PFD of $1,900 for FY 2021.

“A key piece of my proposal is the economic recovery payment – the remaining portion of the 2020 PFD. This would provide Alaskans with $1900, driving $1.2 billion into the economy. Alaskans and the private sector need assistance now. Businesses that have been devastated, and Alaskans that are suffering, will benefit from immediate action by the legislature placing money into the people’s hands by March,” said Dunleavy in a prepared statement.

Dunleavy’s FY 2022 budget proposal for the Department of Health and Social Services includes $3.41 billion in total funding – a 4% decrease compared to the FY 2021 authorized budget.

Much of the overall budget’s reduction in UGF spending comes from cuts to DHSS. Here, the budget allocates $1.07 billion in undesignated general funds – representing a nearly $140 million cut (-11.4%) to the department. Anchorage Daily News reports that about $90 million of this figure comes from money spent in the current year related to the pandemic, which the state doesn’t expect to need next year.

The DHSS operating budget proposal also includes $89.8 million DGF (+9.1%), and $2.07 billion (-0.5%) in federal funding.

Within the department, Dunleavy proposed a $35 million cut to the state Medicaid program. Funding for adult preventative dental services under Medicaid remains unchanged in the proposal.

The legislature will consider the budget proposal when it convenes on January 19.