State Budget Vetoes and Homer Community Impacts

In every corner of the state Alaskans are talking about the state budget and the impacts it will have on the quality of life for young and old.  After the State Legislature approved a budget with some very deep cuts, Governor Dunleavy used his veto pen to cut another $444 Million.  These cuts, primarily in higher education and social services, will profoundly impact the life of all Alaskans, including those in the Homer area.

The Homer Foundation is the oldest community foundation in Alaska and regularly interacts with many other nonprofits in the region. In conversations with some of our partners in the Homer area, we know that as a result of his budget local nonprofits will lose significant funding.  What does this mean for our community?  Our partners tell us the loss of state funding will mean layoffs, lost matching grants, and reduced help for members of our community that need it most.  Here are just some of the outcomes:

  • Medicaid dental services – Some 300 adults who receive dental care at the SVT health center each year would lose access to those services under elimination of the state’s Medicaid adult dental benefit.
  • Early childhood – State funding is eliminated for Head Start and several other early education programs. Homer’s Head Start program serves twenty children aged 3 to 5. In addition, elimination of the Best Beginnings program could cut enrollment in half for the local Homer Imagination Library program, which provides hundreds of kids here with early-reader books.
  • South Peninsula Hospital – Medicaid payments for elderly long-term-care patients help subsidize unprofitable services at our small-town hospital. Medicaid cuts  – first by the Legislature, then by the governor – will cost the hospital hundreds of thousands of dollars in revenue. Short-term impacts in long-term care would likely be reduced staffing.  Elsewhere at the hospital, cuts to Medicaid and behavioral health treatment grants are expected to divert patients into the emergency room, where they would receive more expensive care that hospitals have to cover without reimbursement.
  • Homer seniors – Many elderly residents living in or near poverty on the Lower Kenai Peninsula count on the state’s need-based senior benefits program, which was eliminated. Monthly grants of $76 to $250 were used by seniors for food, rent and medicine. Homer-area recipients probably number in the hundreds, though exact figures aren’t available; the state counts 1,200 recipients on the Kenai Peninsula.
  • Arts – Elimination of the State Council on the Arts will punch a $20,000 hole in the budget of the Homer Council on the Arts, or 12-15 percent of its budget.
  • Public Radio – KBBI anticipates layoffs and programming changes, but the full effects of the budget cuts will create a ripple effect that is hard to gauge. The radio stations’ $75,000 in state funds were eliminated, jeopardizing the ability to bring in an additional $125,000 in federal funding. No funds are provided to support the station’s central role in the lower Kenai Peninsula’s emergency alert system. In addition, $30,000 in engineering services provided by the state will go away.
  • Behavioral Health Services – State mental health grants used to pay for state-required services that are not covered by insurance, such as emergencies at the hospital or police station, are eliminated — cutting income up to $250,000 in the budget of the South Peninsula Behavioral Health Services.
  • The Homeless Assistance Program run by the Haven House will be cut by at least $60,000 in funding due to the near-elimination of the state’s homeless assistance grants.

There appears to be a misunderstanding in some quarters that the philanthropic sector will fill these budget holes. This is wishful thinking.  This statement is not based on the generosity of Alaskans, it’s based on scale.  In 2018 total philanthropic giving in Alaska added up to approximately $135 million.  This amounts to just a portion of the cuts proposed in the budget even before the Governor’s vetoes.

Locally, in 2018 the Homer area nonprofit sector accounted for $5.9 million in revenues of which $2.4 million was new money into the area.   Much of this was federal matching funds which require State funding to qualify for the Federal portion.  As a leading local distributor of funds, last fiscal year the Homer Foundation distributed $150,000 in grants and scholarships.  We are proud of our fund holders, donors and volunteers who love this community and help their neighbors by giving to the foundation.  We are also proud of the rigorous level of due diligence we employ both in our grant-making and our investment management. By noting theses impacts we are not entering the political conversation. That is for others.  Some would argue that a large PFD will help all Alaskans.  We’re not debating the merits of that argument either. This conversation is about what sort of community we want to have.  Our role here is to inform the community of the very real local adverse consequences resulting from this budget. Whatever your position on the issue, be informed.

-Mike Miller, Executive Director

Homer Foundation