The legal branch of the Legislative Affairs Agency has concluded that language in Gov. Mike Dunleavy’s FY 2020 budget “almost certainly” violates the Alaska Constitution.
Section 1 of the operating budget (SSSB 20) contains language that reads, “At the discretion of the Office of Management and Budget [OMB], funding may be transferred between all appropriations[.]”
That language is tied to every State department, except the University of Alaska, which receives appropriations much like a block grant.
The legislature and the judiciary are also exempt.
“The proposed language in SSSB 20 essentially overrides the legislature’s power of appropriation,” Legislative Counsel Linda Bruce explained in a memo released by the Senate Minority. “Under this proposal, the legislature would have the power to appropriate a specific sum of money to a department but would have no power over appropriations within that department. Thus, even if the legislature made an appropriation to a specific program or for a specific purpose within a department, OMB could transfer some or all funds from that appropriation to another program or purpose within that same department.”
The budget is arranged into a collection of departments, appropriations, and allocations, in decreasing order of size.
Allocations are grouped together by subject into appropriations. An example of the breakdown within the Department of Administration (DOA) is available here.
Following that example, one can see that the Public Communications Services appropriation is broken down into four allocations: the Public Broadcasting Commission; Public Broadcasting – Radio; Public Broadcasting – T.V.; and Satellite Infrastructure.
Dunleavy has proposed eliminating all funding for public broadcasting.
Under the proposed language, if the legislature were to restore the funding for public broadcasting and override a likely line-item veto, OMB could still zero out the funding for the Public Communication Services appropriation by moving it to another DOA appropriation, like the Office of Information Technology (OIT), which has Dunleavy’s support.
To prevent such actions, AS 37.07.080(e) allows departments to move funds between allocations, but not between appropriations. This gives departments some flexibility with their resources, while recognizing the legislature’s constitutional authority of appropriation.
OMB, who would assume appropriating powers under the proposed language, resides in the Office of the Governor.
“This language upends the principle of separation of powers and would allow the governor and his OMB Director to seize budgetary control from the legislative branch and make virtually any changes to the budget that they wish,” Sen. Bill Wielechowski (D-Anchorage) said in a statement Monday. “This language absolutely cannot be allowed to remain in the budget.”
“If a court is asked to review a transfer of funds between appropriations made by OMB as proposed in SSSB 20, the court would almost certainly find that the provision is an unlawful delegation of the legislature’s appropriation power and a violation of the separation of powers doctrine,” Bruce agreed.
In 1927, the Supreme Court of Arizona wrote in Hunt v Callaghan, “An appropriation is ‘the setting aside from the public revenue of a certain sum of money for a specified object, in such manner that the executive officers of the government are authorized to use that money, and no more, for that object, and no other.’”
The Alaska Supreme Court subsequently cited that definition in multiple cases.
OMB’s language would violate that case law, allowing OMB to instead use a “certain sum of money for a specified object” for any object within a department.
Further, the language violates the confinement clause of Article II, Section 13 of the Alaska Constitution, reading, “Bills for appropriations shall be confined to appropriations.”
The Alaska Supreme Court ruled in Alaska Legislative Council v Knowles that, to satisfy the confinement clause, budget language “must not enact law or amend existing law.”
OMB’s language would clearly amend AS 37.07.080(e).
The budget language is the most recent attempt to expand executive authority at the expense of the legislature.
Three constitutional amendments Dunleavy has proposed would limit the legislature’s ability to make appropriations, remove the Permanent Fund dividend (PFD) from being subject to appropriation, and require a statewide vote to approve any tax adopted by the legislature.
Several Dunleavy bills would eliminate designated funds, including the $1.1 billion Power Cost Equalization (PCE) Endowment Fund. Those funds would be swept into the Constitutional Budget Reserve (CBR), which requires a three-quarter vote of both chambers to access.
Sweeping the funds would make it harder for the legislature to muster the votes to spend the money, effectively reducing the legislature’s ability to appropriate.
Dunleavy has already transferred administrative services directors into OMB, separating them from the departments for which they are building budgets.
The Legislative Finance Division will present its budget analysis to the Senate Finance Committee on Tuesday, February 26.
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