July 8, 2019

The Honorable Michael Dunleavy
Governor of Alaska
State Capital Building

Juneau, Alaska
Dear Governor:
The Alaska State Home Building Association has reviewed and discussed the list of
budget vetoes to H839 and H840, the FY20 Operating Budget. As an organization, we
have taken the position that the best course of action for our state is for the Legislature

to vote to override those vetoes.
We take this position because of our concern for potential harm to the state's economy.
There is strong support among many of our members for the state to reduce its budget
in order to balance, but there has to be a transition over multiple years that allows for an
economic adjustment to this fiscal approach. The vetoes to the Operating Budget,
when combined with reductions made by the Legislature during the session, will impact
individuals, families, and communities to an extent that will negatively shock the state's
housing market.
Our position to support an override is not taken lightly, and we want to see the
Legislature work cooperatively with our Governor. There will be further discussions
about the state's budget for FY20 and beyond, and we expect those discussions will
result in state budget reductions. That is necessary.
Economic analysis on the budget vetoes is minimal, but the potential risks are
significant. Home building generates substantial local economic activity, including new

income and jobs for residents, and additional revenue for local governments. The
National Association of Home Builders (NAHB) has developed a model to estimate
these benefits. The model captures the effect of the construction activity itself, the
ripple impact that occurs when income earned from construction activity is spent and
recycles in the local economy, and the ongoing impact that results from new homes
becoming occupied by residents who pay taxes and buy locally produced goods and
services.

P.O. Box 91444 . Anchorage, Alaska 99509
Phone (907) 644-4190 . FAX (888) 732-1401
Website: www.buildersofalaska.com
E-mail : alaskastatehomebuildingassoc@gmail.com

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 Since the model was initially developed in 1996, NAHB has used it successfully to
estimate the impacts of construction in over 800 projects, local jurisdictions,
metropolitan areas, non-metropolitan counties, and states across the country.
The estimated one-year impacts of building 100 single-family homes in a typical local
area include
-$28.7 million in local income

- $3.6 million in revenue to local governments
- 394 local jobs

When we look at the risks of steep budget cuts by the State of Alaska, the potential loss
of jobs and revenue to our local communities is alarming. Vetoes of this magnitude are
severe enough to generate risks that we fear will be detrimental to our home building
membership and Alaskans in general. Our organization takes the position that an
override of the budget vetoes would still advance budget reductions made by the
Legislature and allow for these reductions to continue in upcoming budgets.
Thank you for your public service to our state.

We stand ready to assist all of our

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Richard Carr, President
Alaska State Home Building Association

P.O. Box 91444 . Anchorage, Alaska 99509
Phone (907) 644-4190 . FAX (888) 732-1401
Website: www.buildersofalaska.com
E-mail : alaskastatehomebuildingassoc@gmail.com