Fallout from Governor Walker’s veto pen is hitting the Matanuska Susitna Borough hard. Borough officials are now grappling with a budget shortfall caused by millions of dollars in reduced state funding.Listen nowMat-Su Borough LogoThe news came on June 29, after tax bills had been mailed and far to late to rework the Mat-Su Borough’s budget for this fiscal year. At a special Borough Assembly meeting on Wednesday, Borough manager John Moosey laid out the bare facts. He said the governor has vetoed some of the money that directly affects municipalities.. such as debt reimbursement and base student allocations and school transportation funding.“The Mat-Su seemed to get hit particularly hard,” Moosey said. “My view is trying to take immediate view of how this impacts our current operating budget. Five point 7 million dollars we expected to receive for debt reimbursement from the state was lost. We were informed of that on June 29. It gave us no time really to react. 2017 started on July 1.”Walker’s vetoes took 25% out of the state’s bond debt reimbursement to municipalities and placed the financial burden back on local governments.New Mat-Su school district superintendent Gene Stone said the Mat-Su school district is looking at an additional $2.2 million in reduced state allocations due to Walker vetoes.“The total $2.2 million dollars was $1.356 million dollars in pupil transportation and a little over $800,000 in the base student allocation or the foundation formula,” Stone said. “And so that equaled 2.2. That’s what specifically impacts us. Obviously, we are concerned about the bond debt reimbursement from the Borough, because we are a growing district and we rely on the community to support the bonds.”Stone said the reduction in the state debt service ratio is likely to discourage new school construction.The Borough Assembly at this point will urge legislators for a veto override at the next legislativespecial session on July 11. But Borough lobbyist John Harris said that will take a three quarters vote from the entire legislature“It’s a big hurdle, and in my opinion, a very unlikely one,” Harris said.Harris said the legislature must approve an override during the first five days of the special legislative session, or Walker’s vetoes stand.Harris suggested the Borough could urge legislators to consider submitting at the special session a funding bill which would pay for bond reimbursement and school funding out of the Permanent Fund earnings. Right now the two are being funded from the Constitutional Budget Reserve.At this point, the Borough is instituting a hiring freeze and a no overtime policy for staff in reaction to the new deficit. The Borough Assembly will meet again in two weeks to consider further action on the issue.