Senate set to work as House in disarray

  • Incoming Senate President Cathy Giessel, R-Anchorage, speaks to Commonwealth North on Dec. 12. Unlike the House, where no majority caucus has yet formed, the Senate majority will have a solid 14 members when the Legislature convenes on Jan. 15. (Photo/Elwood Brehmer/AJOC)

Another challenging session is fast approaching, but Alaska’s Legislature remains half-baked.

That’s because at the time of this writing the House is still without a majority caucus despite the Supreme Court’s Jan. 4 decision to uphold a single-vote victory for Fairbanks Republican Rep.-elect Bart LeBon in District 1.

In the Senate, leaders of the Republican majority are again preparing to tackle major issues on which they have made progress in recent years but significant work remains.

Incoming Senate President Cathy Giessel, R-Anchorage, told a gathering of the Resource Development Council for Alaska at the group’s annual legislative preview meeting Jan. 3 that addressing crime problems in the state will be the top priority for her caucus in 2019, a position in line with Gov. Michael J. Dunleavy’s primary goal for his first session in office.

Dunleavy and many legislators — some of whom first supported it — have pushed for a wholesale repeal the now-beleaguered criminal justice reform package in Senate Bill 91 passed in 2016.

Giessel said in a brief interview that there are “significant flaws” in SB 91 and on the whole the public wants it repealed but continuing changes can be made that could be beneficial without sacrificing some of the more popular aspects of the law, such as tougher penalties for various felony convictions.

She said prosecutors across the state have helped legislators identify some of the gaps in SB 91 that can be closed without a straight repeal.

Finance Committee co-chair and operating budget leader Sen. Bert Stedman, R-Sitka, said he expects the omnipresent issue of closing the state’s large budget gap will keep legislators working well into overtime for a fifth consecutive year.

The 2020 fiscal year deficit is currently pegged at about $1.6 billion, but Dunleavy’s final budget proposal should cut spending to the point of being balanced, according to Budget Director Donna Arduin. At that point it will be up to the Legislature to determine how many of the administration’s cuts it wants to implement.

It’s those major policy calls — and the fact that there are little state savings to fall back on — that lead Stedman to believe legislators will work up to and possibly over their constitutionally allotted 121 days.

With $1.7 billion left in the Constitutional Budget Reserve Fund it would be possible for legislators to turn to it one more time to fill the deficit but there is general agreement that the state needs to keep at least $1 billion, and ideally $2 billion, in reserve to respond to emergencies and for cash flow management purposes.

That means legislative action will be needed to make the structural budget cuts required to resolve a deficit of that size, according to Stedman.

“I’ve expressed concern and a desire to the administration to have legislation prepared and ready for legislative action. In my opinion, (big changes) should be led by the administration; the agencies are the ones with the expertise, with the more intimate knowledge of their operations,” he said. “The Legislature, the body of the people, doesn’t have the background.”

Senate Republicans are looking to major changes to the state’s Medicaid program, for one.

Democrats argue Medicaid expansion, accepted by former Gov. Bill Walker in 2015, is a win for the state because it has afforded upwards of 40,000 low-income Alaskans access to health insurance that is 90 percent funded by the federal government, a funding level legislators are happy to match for other federal programs such as highway funding.

However, Giessel contends the expanded class of Medicaid recipients, which includes working-age men, takes money away from the individuals the safety net was originally intended for.

“Working age men — we need to get them to work,” she said.

On the other hand, Stedman said he wants to make sure the state is collecting all of the Medicaid funding that’s available.

“I’m interested in seeing how much money we’re leaving on the table and I think it’s significant — in the tens of millions — and I think we need to clean up that area and try to get as much match as absolutely possible,” Stedman said in an interview.

The Senate’s final Permanent Fund dividend amount will be a collective decision, he noted, but Stedman is of the opinion the PFD appropriation should be half of whatever the state’s percent of market value, or POMV, draw on the fund is in any given year. He believes splitting the draw 50-50 for dividends and government support would help alleviate the politicization of the issue.

Stedman is more concerned about the size of the POMV draw; he said the current 5.25 percent draw is too large and it needs to be reduced to the 4.5 percent range to be sustainable over the long-term.

At 5.25 percent, the Revenue Department estimates the 2020 fiscal year POMV draw will be roughly $2.9 billion.

“We shouldn’t be looking at the Permanent Fund as a milk cow to milk it as much as we can and hope the historical (average returns) average out and we don’t have any abnormal hiccups in the financial markets,” Stedman stressed, recognizing a smaller draw means less revenue, putting more pressure on the state budget. “The Permanent Fund should be siloed and run as a portfolio regardless of our financial needs.”

His biggest worry, though, is that legislators will use take “the easiest course of action” in the upcoming session and fill the deficit via an ad hoc draw from the roughly $16 billion available through a simple majority vote in the Earnings Reserve Account of the Permanent Fund, he said.

“That issue of protecting the Earnings Reserve and protecting the Permanent Fund from appropriations is a very serious matter,” Stedman continued. “You can’t point at one party — the no-good SOBs down the hall, they want to take big chunks of money — it’s all the SOBs in the building. We have good intentions but collectively we’re very dangerous and hard on the savings of the state because it’s easier to make a 21 and 11 vote than it is to restructure our operations.”

He emphasized that he is looking forward to a robust debate on how to best avoid overusing the fund.

House disarray

Because no one wants to show their hand, no one among House legislators is talking.

There is very little legislators in the House can do until they settle on a majority caucus, according to Lt. Gov. Kevin Meyer’s Chief of Staff Josh Applebee.

The lieutenant governor presides over the initial floor sessions of the House and Senate each year, swearing in new members and taking nominations for House speaker and Senate president pro-tems.

“That’s all his duties are. It’s incredibly limited what the lieutenant governor can do,” Applebee explained. “The lieutenant governor as presiding officer is only empowered to do those things — maintain decorum, call them to order, swear them in.”

Without a majority to nominate a speaker the House will not even be able to accept messages from the Senate or the governor, according to the Legislature’s uniform rules.

Applebee noted that means “the body can’t conduct any business other than electing a speaker pro-tem and that includes being able to approve the governor’s appointment of Sharon Jackson” to the House District 13 seat vacated by now-Corrections Commissioner Nancy Dahlstrom.

Applebee investigated what happened the last time — in 1963 — the House started a session without a majority, through reading the Legislative Journal from the time.

“They really tried to explore other powers the (lieutenant governor) had and they came to the conclusion that there are none,” he said of the 20-20 caucus split in 1963. “There’s no committees to be appointed, communications from the governor and the Senate can be received but not acted upon; they basically sit on the clerk’s desk.”

He added that it could go so far as to challenge votes to adjourn a floor session.

“Back in ’63 they couldn’t agree on how long to take a recess,” Applebee recounted.

How it eventually shakes out should add up to an interesting lesson on the inner workings of Alaska politics.

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Elwood Brehmer can be reached at [email protected].

Updated: 
01/10/2019 - 3:24pm

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