Gov. Dunleavy veto of increase for Alaska child care and infant learning funding draws concerns

The governor cited declining state revenues for the budget vetoes. Legislators and advocates say funding for child care and early intervention services should be prioritized.

Students swing on a playground at Meadow Lakes Head Start in Wasilla, Alaska. It closed in 2024 due to funding and staffing challenges. (Lela Seiler, courtesy of CCS Early Learning)

The budget vetoes that Alaska Gov. Mike Dunleavy issued last month included millions of dollars proposed by the Legislature to bolster child care and early intervention services for children with disabilities or developmental delays.

Dunleavy vetoed a proposed $1.86 million in additional funding for child care grant programs and place-based and home-based child care centers, citing declining state revenues. The budget retains $5.87 million for those programs for next year. 

For early education and infant learning, the Legislature proposed a significant boost — $5.7 million more — for the state’s 17 programs that provide intervention services for families with children from infancy to 3 years old experiencing disabilities or developmental delays. Dunleavy rejected the increase, and allocated $10 million for the statewide programs. 

“Governor Dunleavy’s goal is for Alaska to be the best place in the country to raise a family,” said Grant Robinson, a deputy press secretary for the governor in an email on Monday responding to a request for comment. “The budgeting process requires the Governor to consider all line items in view of the State’s fiscal situation. The budget the Governor signed still provides more than $5.8 million of funding for childcare benefits. Given the State’s revenue outlook, the Governor made the difficult yet fiscally responsible decision to veto increasing and expanding infant learning programs.”

The governor vetoed more than $127 million from the Legislature’s proposed budget, including $50 million for public schools. In a prerecorded video released with the veto announcement in June, Dunleavy cited lower state revenues due to falling oil prices.

“Basically, we don’t have enough money to pay for all of our obligations. So as a result of that, you’re going to see some reductions in this year’s budget. It’s not an easy thing to do. It’s certainly not a fun thing to do, but it’s necessary,” he said.

Anchorage Republican Sen. Cathy Giessel, who also serves as the Senate majority leader, agreed that the state is facing fiscal challenges, but said child care and early education programs should be prioritized, as the Legislature had proposed.

“We had a balanced budget. It is true, it was very difficult to arrive at that balanced budget,” she said in a phone interview. “We searched all the couch cushions for one-time funding to fund this balanced budget, but we achieved it. The governor’s vetoes of these two critical services are just going to mean future costs, because these services were not provided for kids in their earliest development stages. So I was very disappointed.”

An estimated 1,800 Alaskan families are currently served each year by the state’s infant learning programs, funded by the state and federal Medicaid, at no cost to families. Children and families work with developmental specialists, and can receive speech, physical and occupational therapies. In addition, parents receive training and education on child development.

For example, in the Northwest Arctic region, an early learning and family program is administered by the Northwest Arctic Borough School District. It is based in Kotzebue and serves all the Northwest Arctic villages, as well as Point Hope in the North Slope Borough.

“We’re spread very thin,” said Tracey Schaeffer, one of the program’s three staff members. “And we definitely could use another staff person to help with traveling and seeing families and spending time in the villages.”

There is only one air carrier, Bering Air, serving the region, down from four companies operating a few years ago, she said, so with weather events and disruptions, it’s increasingly challenging. 

“We have to change reservations a lot because of the weather,” she said, estimating the total cost for travel and flights at up to $25,000 per year, plus significant time. “As it gets warmer, we have a lot more days that are not very safe to fly here.” 

Schaeffer said they work as much as possible by phone, but intervention services are very personal. “And all the while, you’re trying to kind of build a relationship with this family, because it’s a really intimate, sensitive situation when you’re working with a family who has a child that experienced, you know, something that wasn’t expected, a disability, or something, a medical issue, that has put their development at risk,” she said. 

The proposed state funding increase would have been welcome, she said. “That would have been a huge relief, because there’s a lot of pressure. I mean, (with) early intervention, three years is a short period of time, you know, and we lose so much time because of weather, flight cancellations or something,” she said. “So there’s a lot of pressure there. We’ve done this job for a long time, and we know the time goes fast, and we want to provide as much intervention as we can. And it’s just hard to do that.”

Schaeffer also runs a small child care center in Kotzebue, serving eight children, the first licensed provider to open in the community in over a decade. She said more local and state support is needed to address the lack of child care and rippling impacts for the community. “We lose people all the time because of a lack of child care. You know, we have educators or providers that come and they start a family, and then they realize, like, ‘Wow, I can’t find a child care provider,’ and we lose them because of that.”

Shaeffer and her daughter opened the child care center in 2023, a challenging process documented in a short film by Laura Norton-Cruz, a social worker, public health advocate and film producer. She and filmmaker Joshua Albeza Branstetter created a documentary film series focused on the challenges of child care and early education programs called the “Early Childhood in Alaska” series.

“Child care is just not a profitable business model. It’s an investment in child brain development and family well-being, and the economy,” Norton-Cruz said, emphasizing the need for increasing state and federal funding support. “Staffing is the majority of the costs. But also, if you run a home-based child care center, you have to pay your mortgage or you have to pay rent, you have to pay utilities: Those things cost money. And we need support from the government to be able to offer this essential service, to have a workforce, and to have children who are kindergarten ready.” 

In April, Anchorage’s largest child care provider, Bright Beginnings Early Learning Center, closed, displacing 125 children. Norton-Cruz said while some progress has been made, like raising awareness around Alaska’s child care crisis, families and providers are still struggling. 

“Others have cut back on hours or cut back on the number of rooms, or the number of kids they can take, in order to have this essential service for parents to be able to go to work, which we need them to do,” she said. “Because we have major workforce shortages, and parents need income to pay for, you know, rent and everything else, we have to do a better job of funding and supporting the sector.”

In 2023, Dunleavy launched a child care task force with the stated goal to develop a plan to improve availability and affordability of quality child care throughout Alaska. Norton-Cruz said the work of the task force was positive, and would like to see the governor put more state funding toward its recommendations.

“When we don’t have policy that supports child care and early childhood, we basically just rely on the unpaid labor of women,” Norton-Cruz said. “Whether that’s moms, or whether that’s grandmothers, or aunties, you can’t just say, ‘Oh, but grandmas and aunties can step in.’ That’s not policy. That relies on something that may not always be there for everyone, and isn’t fair. … People need to be able to make that choice, rather than have that choice made for them.”

Giessel also said there is a need for state funding for the governor’s own task force recommendations. She pointed to new state revenue measures that Dunleavy has opposed —like oil taxes — that leaders in the Alaska House multipartisan and Senate bipartisan majority caucuses want to pursue to bring in more state dollars. 

“First of all, we have a huge gap in our tax structure on our oil resources,” Giessel said, referring to the difference between taxes paid by traditional corporations and by those corporations that report their income through their owners, known as “S corporations.”

“The S corporations pay no corporate tax to the state,” Giessel said. “There is legislation that would institute a requirement for S corporations to pay a corporate tax to the state, conservatively estimated, that would be $100 million per year.”

A bill to tax these corporations is in the Senate Rules Committee.

“That would pay for a huge amount of these child care and early education funding requirements,” Giessel said.

“For him to say that these cuts are because of declining revenue and ignoring his responsibility in this, is just amazing to me,” Giessel added. 

The Legislature will meet for a special session on Aug. 2, when they will consider whether to override the budget vetoes.

• Corinne Smith started reporting in Alaska in 2020, serving as a radio reporter for several local stations across the state including in Petersburg, Haines, Homer and Dillingham. She spent two summers covering the Bristol Bay fishing season. Originally from Oakland, California, she got her start as a reporter, then morning show producer, at KPFA Radio in Berkeley. Alaska Beacon is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.