Gov. Mike Dunleavy’s State of the State address last Tuesday night was well met by many lawmakers who saw the speech as a departure from a previous focus on trimming the state’s budget.

In a meeting with reporters immediately following the address, members of the Senate Republican leadership repeatedly used the word “optimistic” to describe the speech, and said they hoped it signaled a better relationship between the governor and the Legislature.

“I want to give the governor a high five,” said Sen. Mia Costello, R-Anchorage.

Costello and other Republican senators said they felt the governor’s speech was hopeful and encouraging.

“It was a very positive speech,” said Senate President Peter Micciche, R-Soldotna, “The governor said many things I think most Alaskans would agree with.”

At several points in his speech, Dunleavy stressed the need for mutual cooperation in order to solve the state’s problems, something Micciche and other lawmakers said they appreciated.

But there was also reservation from some lawmakers regarding the state’s budget. Dunleavy said in his speech Alaska’s budget deficit had been significantly reduced and that high oil prices and strong returns for the Alaska Permanent Fund put the state in a better financial position. Yet at the same time, the governor promoted several goals of his administration that will require significant investment and future spending.

[Dunleavy paints optimistic picture in State of the State address]

Those include the governor’s People First initiative, an effort to reduce the rates of sexual and domestic violence in the state, and provide better services for people struggling with addiction and homelessness. During the speech, Dunleavy introduced Carley Rose Kelley, a person in recovery from addiction and advocate for the People First initiative. After the speech, Sen. Click Bishop, R-Fairbanks, noted Kelley received the longest round of applause from the audience and said the initiative was something he thought most lawmakers could easily get behind.

But Bishop, who chairs the Senate Finance Committee, noted that the state has annually increased the public safety budget while making cuts to social services.

That Dunleavy had previously cut many of the programs he touted in his speech didn’t go unnoticed by several lawmakers.

Sen. Gary Stevens, R-Kodiak, noted the governor’s budget had reduced several areas of the state government meant to address the very issues Dunleavy said needed to be improved.

“The budget has been flat for years, efficiencies have been squeezed and squeezed and squeezed,” Stevens said. “Looking forward, I think we have to look back as well when this governor really decimated some areas.”

But Stevens said he welcomed the change in the governor’s tone and hoped it signaled a change in the way Dunleavy would work with the Legislature.

Carley Rose Kelley; First Lady of Alaska Rose Dunleavy; Department of Corrections officer Sergeant Ken Noland and Alaska’s first Miss America pageant winner Emma Boyles, applaud Gov. Mike Dunleavy’s State of the State address on Tuesday, Jan. 25, 2022. Kelley was a guest of the governor for her work as a recovering addict turned advocate for at-risk and homeless youth, and received one of the longest rounds of applause when the governor introduced her during his speech. (Peter Segall / Juneau Empire)

Democratic lawmakers were less generous in their reception of the address.

“Don’t forget that Joe Biden balanced Mike Dunleavy’s budget,” said Rep. Sara Hannan, D-Juneau, referring to the federal funding the state had received which Dunleavy has used in his proposed budget. “He mentioned expansion of the (Washington, Wyoming, Alaska, Montana and Idaho program at the University of Washington School of Medicine) program. At the same time, we and students are in litigation over the sweeping of the investment fund.”

Dunleavy’s previous Attorney General Kevin Clarkson wrote an opinion that added several state funds to an accounting device used by the state known as “the sweep.” But the decision to add the higher education funding and the Power Cost Equalization fund were both met with litigation. Last year, a court ruled against the administration in regards to the PCE program and hearings on the higher education funding will be heard next week.

In a statement, Senate Minority Leader Tom Begich, D-Anchorage, thanked the governor for his support for renewable energy, education and other state programs but criticized his attacks on the Biden administration, which he said has given considerable support to the state.

“The support from the Biden Administration has jumpstarted our economy to overcome our deficit, is driving us to renewable energy, and is helping us to substantially expand broadband,” Begich said. “So, if we are going to learn to work together, it has to start with improving the relationship between the Governor and our federal Administration. That’s on the Governor.”

Several Democrats, Begich included, criticized the governor for not acknowledging the need for new revenues and basing his optimism for the state’s finances on oil prices and the stock market, which Begich and other lawmakers noted can change significantly and quickly. Dunleavy previously called on lawmakers to identify new revenues in one of last summer’s four special session but made no mention of revenues in his remarks.

“If we don’t work toward a sustainable and comprehensive fiscal plan, the Alaska that we all cherish will become even more divided by partisan and election politics,” Begich said.

Sen. Jesse Kiehl, D-Juneau, was similarly disappointed by the governor’s rhetoric concerning the Biden administration and said he hoped the governor’s remarks about collaboration were earnest and not due to election season politics.

“I’m going to work with Legislature and the administration based on an assumption of good faith,” Kiehl said in an interview with the Empire. “Hopefully, he sticks to what he said instead of what he’s spent the last three years doing.”

Kiehl said he was glad to hear the governor reverse his policies regarding the University of Alaska and mental health among other issues, and believed there to be strong bipartisan support to resolve those issues.

“I really appreciated his call to all of us to get things done, to work together,” said Rep. Andi Story, D-Juneau. It’s always important that leadership does that.”

Story said he appreciated the governor introducing several Alaskans during his speech and the personal stories behind those individuals. Though surprised there was no mention of the Alaska Marine Highway System, Story said it was good to hear the governor’s vision for Alaska and said there were many things in the speech lawmakers could easily get behind, a comprehensive reading bill among them.

Lawmakers said they were hopeful the governor’s comments about working together would be reflected by his administration’s actions. Micciche noted after the speech the governor had not often been present at the Capitol building in the past, and said he hoped that would change.

Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.