ISER’s Mouhcine Guettabi provides context on the Governor Dunleavy’s vetoes and their potential impact on the Alaska economy in a series of tweets, showing that just the University of Alaska direct cuts, without accounting for all other line item vetoes (Medicaid, K-12, seniors, debt reimbursement, etc) essentially pushes the Alaska economy back into a recession. Guettabi also spoke with KTUU this week regarding the Governor’s veto of $130 million for the University of Alaska and he is scheduled to talk next week about what the vetoes mean for the Alaska Economy at the Anchorage Chamber of Commerce’s Make it Monday luncheon on Monday, July 8 at the Dena’ina Center.

“A high school senior will have to think twice about attending the University of Alaska if it becomes a shell of its former self,”  Guettabi told KTUU regarding cuts to the university,  “Whether it be accounting or economics or engineering, and the university no longer offers that option or the number of faculty gets reduced by 80 percent, then the quality of the university decreases,” he said.

People will be more likely to leave the state for college and the likelihood that they return lowers, Guettabi told KTUU. The loss of these people “affects the quality of life, it affects business startups, it affects whether or not a  firm chooses to come to a place where it’s going to have real difficulty in finding engineers or accountants or people with a Master’s in Public Administration,” Guettabi said. “It’s not just a one-time shock, its an effect that can potentially last for decades.”

On Twitter, Guettabi discusses how the Governor’s vetoes may impact the economy, which experienced 36 straight months of employment decline from October 2015 to September 2018.  During that time, the overall number of jobs lost was 12,400. Since October 2018, the Alaska economy has experienced eight straight months of employment growth with the average monthly growth at 1,325 jobs.

The proposed vetoes total about 450 million dollars, which means that they should amount to at least 4,500 jobs lost in the short run, based on work previously done by Guettabi and others at ISER. “The actual job losses may be much larger if the agencies affected all lay off workers,” Guettabi writes. He added that a cut of $130 million to UA would result in a direct employment loss of 1,300, which would push the Alaska economy back into a recession.

Guettabi, who recently wrote about what is known about the socio-economic benefits of the Alaska Permanent Fund Dividend, told KTUU that comparing the benefits of the PFD to the damage done through cuts to the university is like comparing apples to oranges.

“You’re potentially eliminating full time year-long positions that are high paid, and you’re stimulating the economy with short-term jobs,” he said.

Guettabi will provide a more comprehensive overview in his talk, “What Do the Vetoes Mean for the Alaska Economy,” at the Anchorage Chamber’s Make It Monday luncheon, Monday, July 8, at 11:30a.m.

Media Mentions:

“Everything is on the table, Facing $135M budget cut, university contemplates drastic action,” Kenai Peninsula Clarion, July 2, 2019.

“Dunleavy sidesteps Constitution, uses veto to punish court for doing its job,” Anchorage Press, July 2, 2019.