The Senate Minority continued their critique of Gov. Mike Dunleavy’s proposed cuts to education and public safety Thursday, January 31.

Dunleavy released his FY 2019 supplemental budget, SB 39, on Monday.  The bill offsets spending on Medicaid and Alaska State Troopers with $23 million in cuts to education and a $3 million cut to the Village Public Safety Officer (VPSO) program.

“Governor Dunleavy campaigned… on public safety and education,” Senate Minority Leader Tom Begich (D-Anchorage) said in a press conference.  “That budget last year addressed education and the lack of funding for education that had been chronic for years.  It addressed public safety concerns that had come up.” 

Of the cuts to education, $20 million would be from operations and the classroom.  $1.2 million would be cut from broadband access grants, and $2 million would be cut from school bond debt reimbursement.

The $20 million came from a separate bill, HB 287, that was tied to the operating budget and increased education funding in recognition of years of flat education spending.

“That budget basically seeks to undo the legislature’s bipartisan budget that was written last year,” Begich said of the supplemental.  “That was a process where Republicans, Democrats, and Independents came together in this building, across party and across body, to create a budget that responded to the needs of Alaska, recognized our fiscal situation, and took care of our constitutional obligations.”

The proposed cuts were introduced the same week the Senate Majority released the results of their annual unscientific online poll.

Of 7,400 respondents, for the first time, a slight majority of 51 percent said K-12 education funding is “too low.”  No more than 18 percent of respondents have said education funding is too high during the last four years of polling.

Overall State spending is either too low or “about right,” according to 59 percent of respondents.

The education cuts in SB 39 took school districts by surprise, especially since they are in the middle of the fiscal year and have spent the money that they budgeted based on passage of HB 287.

Sen. Elvi Gray-Jackson (D-Anchorage) said Anchorage received $5.8 million of the total and has no way to respond to the proposed cuts except through layoffs.

“A promise is a promise.  A promise was made to give school districts $20 million,” she said.

“Those were promises made last session, and if I may say, they were promises made when Mike Dunleavy — Governor Dunleavy — was not here.  He had walked away from his job in the Senate.  We were doing our job,” added Begich.

Dunleavy resigned from his Senate seat right before the start of the last legislative session to focus on running for governor.

“Those promises that were made by this legislature over the last year and by the governor were broken with that supplemental offering.  It’s become more evident that is going to be the trend of this administration,” Begich concluded.

Sen. Donny Olson (D-Golovin) said he has heard rumors that the Department of Education and Early Development (DEED) is clawing back $30 million in FY 2020 grants that were also part of HB 287, something that will have to be explored in the budget subcommittee.

Olson: “OMB Director is the One With the Hatchet”

The Senate Minority did not restrict their criticism to Dunleavy Thursday.  They expressed serious concerns about Office of Management and Budget (OMB) Director Donna Arduin, who has cut budgets in six other states, including Florida.

Olson said Dunleavy can’t be expected to micromanage Arduin and her efforts to craft the budget.

“It’s the OMB director that I hold fully responsible for what’s going on, not necessarily the governor,” he said.  “She’s not from here.  I don’t know how long she’s going to stay here.  Because of that, she doesn’t know how the system works.” 

“I’ve been hearing from my district that this is not the man they voted for with these kind of cuts,” Olson said of Dunleavy.  “My thinking is that the OMB director does not completely reflect what the governor was running on.  I’m just afraid of some of the unintended consequences that Governor Dunleavy is going to be facing by what his OMB director is doing.”

“I think the OMB Director is the one with the hatchet out there.  And it’s a hatchet, not a scalpel,” said Olson.

“It does concern me that a budget director who has a reputation for going into states cutting and slashing and burning, so that the governor doesn’t have to take responsibility for it, and then leaving, has come here,” Begich added.

Senate Finance members from both caucuses gave SB 39 a cold reception this week.

During that hearing on the supplemental budget, Arduin said that because the $20 million has not yet been physically distributed to school districts, they should not expect to spend it.

“When would we expect that appropriation then to be executed?  What’s the timeframe?” Senate Finance Co-chair Bert Stedman (R-Sitka) asked her.

“We will wait to see what our feedback is through your actions on this bill proposal,” Arduin responded.

Shana Crondahl of Alaska Education Update asked Senate Minority members Thursday if the Dunleavy administration’s apparent plan to hold the $20 million, pending movement on SB 39, is an infringement on the legislature’s powers.

Begich replied that he had not heard that interaction, but that he was shocked.

“I think that would be a very inappropriate thing for the governor to do,” Begich said.  “If indeed he has done that, if indeed that is how he was represented by OMB Director Arduin, then she’s got some explaining to do.”

Sen. Bill Wielechowski (D-Anchorage) said the Alaska Constitution makes the legislature the appropriating branch of government, while the governor is responsible for executing the laws.

Dunleavy is effectively trying to veto $20 million that was appropriated by the legislature and not vetoed by former Gov. Bill Walker, Wielechowski suggested.

One of the problems under Arduin is that department commissioners are not building their own budgets, Begich said.  All of that work has been consolidated under Arduin and OMB, so departments are unable to answer simple questions about their projected budgets.

“I, frankly, believe that’s outrageous, and I believe that that position is shared by a lot of people in this building,” Begich said.

Kawasaki noted that the Department of Public Safety budget, including VPSOs, had already been cut to the bare minimum.  Yet $3 million is now being cut from VPSOs right before contractors are set to fill those positions in the Spring.

“This governor did campaign on public safety and did campaign on crime prevention.  Why are they taking money out of rural Alaska?  Isn’t the life of a rural Alaskan, and isn’t public safety in rural Alaska, just as important as public safety in downtown Anchorage or downtown Mat-Su?” Kawasaki asked.

Sen. Jesse Kiehl (D-Juneau) pointed out that VPSO funding, if unspent, simply lapses and remains in the State treasury.

“But deleting it says, ‘Stop trying.’  Deleting it says, ‘Don’t work on public safety with VPSOs anymore.’  Not acceptable,” Kiehl declared.

“Alaska is not an experiment, and it’s not a place where you play with people’s lives by arbitrarily slapping together a budget that ignores the needs that are constitutionally protected in this state.  That’s what I believe she has done with this supplemental and what she will likely do with the budget coming,” Begich said of Arduin.

Kiehl: Dunleavy’s Constitutional Amendments “Not the Way Constitutions Are Supposed to Work”

On Wednesday, Dunleavy introduced three proposed constitutional amendments that he called “the basis for a permanent fiscal plan” in a press release.

Senate Joint Resolution (SJR) 4 would require any proposed tax increase to be approved in a statewide vote.

SJR 5 would add the Permanent Fund dividend (PFD) to the constitution and prevent it from being vetoed to a governor.

Finally, SJR 6 would repeal the existing appropriation limit in the constitution and replace it with a more restrictive formula.  It would amend multiple sections and articles in one action.

Begich called the amendments a “smokescreen” and “a lot of fluff.”

“These are ways of simply hiding from having to do the hard work of governing,” he said.

“These constitutional amendments are not a fiscal plan,” Kawasaki agreed.

While Dunleavy said the amendments are necessary to limit the power of the legislature, Kawasaki noted that the constitution already provides for a strong executive branch.  The legislature needs power to check it.

“Those constitutional amendments are not the way constitutions are supposed to work,” Kiehl told reporters.  “They’re not about the people of Alaska; they’re about putting one politician’s agenda into the constitution so that when Alaskans choose a different path for our state, when Alaskans choose a better way forward, Governor Dunleavy would have the constitution stand in their way.  That’s not what constitutions are for, and it’s not a responsible approach.”

Wielechowski said he has sought a legal opinion on whether SJR 6 is an amendment or a revision to the constitution.

“The Framers of the Alaska Constitution distinguished between a revision and an amendment.  Like scholars and other framers in other states, they intended this distinction to be substantive.  We conclude that a revision is a change which alters the substance and integrity of our Constitution in a manner measured both qualitatively and quantitatively,” the Alaska Supreme Court held in Bess v Ulmer.

Wielechowski argues that Dunleavy’s SJR 6 would be such a change.

“It looks like you can’t do that constitutionally, actually.  It looks like his attempt to change the constitution is unconstitutional,” Wielechowski said.

Wielechowski said SJR 5 is fundamentally flawed.  He, too, has tried to enshrine the PFD in the constitution, most recently in this year’s SJR 1.

But Wielechowski noted that as long as the legislature has unfettered access to the Permanent Fund Earnings Reserve Account (ERA) from whence PFDs are paid, putting the PFD in the constitution does not in itself protect it.  Protection for the ERA must also be incorporated, he said.

He will seek a substitute to his own SJR 1 to fix the issue, Wielechowski announced.

Wielechowski brought up a concern, raised in Senate Finance by Sen. Lyman Hoffman (D-Bethel), that Dunleavy’s desire to pay full PFDs because that is the law conflicts with his effort to cut the $20 million for education in the supplemental budget.  HB 287, which includes those funds, is also the law, Wielechowski noted.

“He hurts his case, and he hurts the case, quite frankly, to pay a full PFD, when he picks and chooses which statutes he wants to follow,” he said of Dunleavy.  “That inconsistency raises concerns and is problematic for his argument.”

Sixty-two percent of respondents to the Senate Majority’s poll oppose a larger PFD “if it means less money for schools, roads and troopers.”

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