Friday in the Sun (May 1): The Wrapped Around the Axle edition

Friday in the Sun is here

Welcome to the latest edition of Friday in the Sun, our weekly column attempting to make sense of the week that was in Alaska political news, rumor and gossip.

It’s been a week. Alaska is slowly reopening because EVERYTHING IS FINE. The state’s oil industry is congealing with low oil prices. No one feels like wearing a mask because, again, EVERYTHING IS FINE. And there’s a fire going on because, ah shoot, probably not everything is fine?

As always, forgive the typos, grammatical errors and send all your corrections, tips and complaints to matt@midnightsunak.com, keep an eye on the skies and have the most excellent of weekends.

Wrapped around the axle

That’s how several politicos have described the current talks about whether or not the Legislature will return to session to pass new appropriations to deploy federal coronavirus relief delivered in the CARES Act legislation. The word is that the House is struggling to reach the two-thirds threshold required to waive rules that would allow them to meet digitally and/or approve effective dates on the bills. The Senate, meanwhile, sounds hesitant to even come back in out of concern about the virus.

What’s becoming increasingly clear, though, is that the Legislature must take some kind of action on the budget and that its Legislative Budget and Audit Committee is limited by law in what it can do in place of the full Legislature. I’m not about to waste more energy on explaining how the RPL process works, so check out my waterpark-heavy explanation over here: Citing legal concerns, Legislature sidelines several of Dunleavy’s plans for CARES Act spending.

Anyways, the Legislative Budget and Audit Committee did meet today to approve the following items requested by Gov. Dunleavy without a whole lot of complaints:

The committee, though, refused to act on additional revised requests Dunleavy submitted just hours before the meeting. Chair Rep. Chris Tuck, D-Anchorage, said there was simply no feasible way for the committee to review more than 100 RPL requests with accompanying 270 pages of backup.

Tuck said they’ll be back on Wednesday of next week where they’ll be “addressing further RPLs that we can legally address.”

Which is to say that don’t expect the $568 million in direct municipal aid (more on that below) or $290 million in small business relief to be taken up at the next meeting. Without existing budget items that meet the criteria to be expanded through the LB&A committee, the only real legal way for the Legislature to get that money spent is through a new budget bill.

After contending otherwise, it appears the Dunleavy administration has reached the same conclusion as neither the direct municipal aid nor the small business relief were outlined in the governor’s requests today.

Whether that helps get the metaphorical axle metaphorically unwound has yet to be seen.

A helpful lesson

It’s times like these that I’m reminded of an invaluable lesson from my first year of covering the end game of the Alaska Legislative session. I was frantically trying to track what the hell was going on with the last-ditch effort to pass oil taxes before the 2012 election, a move that if I recall correctly had roped in the Fairbanks area’s hopes of affordable natural gas (which, oof, keep on hoping). I was rushed, panicked and unsure where to look as I tried to follow the hour-by-hour developments on the bill.

“Let’s go get coffee,” now-retired public radio reporter Dave Donaldson told me.

It was exactly what I needed to hear in that moment and I still remind myself of that warm weekend morning when we walked down to the Rookery, had a cup off coffee and let things get sorted out.

The moment-by-moment revelations and twists and turns of the Alaska Legislature make for excellent entertainment, but they’re not worth running yourself ragged to follow. Those little details help provide the context, but the end product is, ultimately, what matters.

So, sure the Legislature is miserably wrapped around the axle on its return to Juneau, split between the conservative House minority’s power trip and a Senate that is sketched out about returning to Juneau at all. But the fact of the matter is no one really knows.

If legislators returned to Juneau tomorrow, would they even really be ready to act? Would the legislation—or even a vague plan for that legislation—really be coming together? There are significant questions about how the allocations for local governments, how those may be used and how it all interacts with the governor’s vetoes.

It’ll take time for those questions to be answered, time for the political forces to be brought together (we’d say that Dunleavy’s retreat from pushing everything haphazardly through the RPL process is a big move by itself) and time for the logistics to be worked out.

Unfortunately, time is the one thing that very few communities can afford right now.

Eastman was right!

Still, all of that is to say the worst part of this is admitting that Rep. David “Pandemic Trendsetter” Eastman was pretty much completely right about his warnings that the Legislature ought to really consider passing something that would allow them to work remotely before leaving Juneau.

I guess when he reached out and got Rep. Chris Tuck on board, we should’ve taken him a little more seriously. Still, you could be forgiven because, after all, he did spend the entirety of the last days of the floor session looking like this:

Hell really has frozen over

Speaking about having to admit that we were wrong to laugh these far-right legislators out of the building, Soldotna Nikiski Republican Rep. Ben Carpenter’s warnings last week that Alaska was “days away” from a slowdown in production on the North Slope continues to be bolstered by, well, a slowdown in production on the North Slope.

Before Alyeska announced a 10 percent cut to throughput in the pipeline last Friday and ConocoPhillips announced a 100,000 barrel cut to production on Thursday, Carpenter warned last Wednesday during a House Finance Committee hearing that things would soon look real, real bad for the North Slope.

“I have it on very good authority that we are days away from slowdown in production. If the economy doesn’t pick up nationwide to grow demand for fuel products then we’re looking at somewhere of a complete shutdown within the next 90 days, probably as soon as June,” said. “June-July timeline.”

Of course, Carpenter was hedging the claim in the need to reopen the economy, because of course, but it still stands as a dire warning for what could be in store if oil prices continue to be depressed.

Override vs. restore

As a few people have pointed out, it looks like the window on overriding the governor’s vetoes has passed and it’d take a second, veto-able budget bill to restore funding. It certainly complicates things though reaching the veto override threshold was never an easy task either.

Any restored state funding will certainly run into pushback as the state’s financial outlook (see above) is incredibly dire but the sudden loss of school bond debt reimbursement, community assistance and school funding has also put several communities in an incredibly dire situation.

After hearing about the shitty situation Dunleavy’s vetoes put school districts during last week’s hearings, it looks even worse for local governments that have seen more than $100 million evaporate with Dunleavy’s vetoes.

On Thursday, the House Finance Committee heard from several elected officials about the impacts from COVID-19, the CARES Act and the vetoes. A huge point of contention is the uneven distribution of CARES Act funds that the administration has put together for communities based on a vague and secretive formula. Here’s a quick rundown from each community:

  • Statewide, Alaska Municipal League Director Nils Andreassen said the financial impact on local communities from the pandemic could easily cross the $500 million mark. Cashflow problems are already springing up for several municipalities and he said several have had to lay off or furlough a majority of their employees.
  • Kenai City Manager Paul Ostrander said it’s already a nightmare scenario for the city of Kenai and have responded by cutting $1 million in capital spending, furloughed four positions and is looking at eliminating three more. Even with those steps, he said they’re looking at a big deficit.
  • Northwest Arctic Borough Mayor Lucy Nelson said the borough is in a particularly tough spot because its revenue comes almost entirely from a negotiated agreement with the operators of the Red Dog Mine. She noted that her community will actually see less CARES Act aid than what was vetoed (something that may have since been resolved after the state admitted there were errors in the initial payout plan) and its only options thanks to Dunleavy’s vetoes will be to cut critical services.
  • Kodiak Borough Mayor Bill Roberts and Borough Manager Michael Powers were also deeply critical of the funding formula, pointing out that even though they handle much of the big costs of COVID-19 that the city of Kodiak would be getting more money than them and even then the CARES Act funds can’t go to backfilling the money that Dunleavy vetoed. “We’re going to have to plan probably a 50% tax increase,” Roberts said.
  • While other local governments complained about the strict guidelines delivered by the U.S. Treasury, Anchorage Chief of Staff Jason Bockenstedt took an aggressive stance with how the funds could be used. He argued that Treasury Secretary Steven Mnuchin got it wrong and that Congress did intend for the money to be able to backfill lost revenue (a tricky position considering Congress is currently considering such legislation). Bockenstedt also argued that Anchorage’s position as the focal point of the state’s health care infrastructure should be considered as they’re considering distributing CARES Act money, “Losing control of the virus in Anchorage could devastate the entire state.”
  • Mat-Su Borough Mayor Vern Halter spoke immediately after Bockenstedt and seemed thrilled by Anchorage’s attitude. “I hope the governor thinks like the city of Anchorage,” he said. He appealed directly to the Legislature to restore the vetoed school bond debt reimbursement because without it the borough would either have to consider a significant tax increase or significant cuts (it should be noted that several Mat-Su legislators previously claimed that their constituents would be thrilled by higher taxes if it meant a smaller state government). He said without the money, the borough would likely eliminate its planned capital budget for the year thereby eliminating an estimated 245 construction jobs. Unsurprisingly, Mat-Su is on the better side of things when it comes to CARES Act funding and Halter didn’t have anything to complain about Dunleavy’s plan.
  • Fairbanks North Star Borough Mayor Bryce Ward and the Fairbanks delegation are in lock step about complaining about Dunleavy’s unequal distribution of CARES Act funds, noting that population doesn’t seem to be a significant factor in the breakdown. Ward was also far more conservative when it came to flexibility with the CARES Act funding and advocated for following the federal guidance on it.
  • Bristol Bay Manager Gregg Breslford largely focused on the area’s logistics and preparation for fishing season. Dunleavy has ignored the area’s pleas to shut down the fishing industry, which brings in many hundreds of summer workers, and the community appears to be in preparation mode now. He noted that the region doesn’t have a hospital and its health care capacity is more or less limited to a clinic.
  • Cynna Gubatayao, the finance director of the Ketchikan Gateway Borough said their budget was balanced as of March 3 and completely blown up a few weeks later. She said the community expects to lose at least $2.5 million in revenue thanks to the devastation of the tourism season. She also warned that the restrictions on the CARES Act money—along with Dunleavy’s distribution that appears to be based on lost revenue when it cannot be used to replace lost revenue—could mean that as much as 75 percent of it could go unspent.

The meeting, at the very least, made a good case for some legislative oversight on this money as well as the likely need to find a viable way to replace the vetoed money. There’s also the potential that Congress could change the guidelines on the existing funding to allow it to backfill lost revenue or pass another funding bill.

Still, it was darkly ironic that the very school bond debt reimbursement that several Mat-Su legislators—Rep. Mark Neuman and Sen. Shelley Hughes come to mind, but I recall there were others—so piously claimed their constituents didn’t need or want is exactly what their borough mayor asked them to restore. Jokers.

A ban on book bans?

Speaking of jokers from the Mat-Su, the Mat-Su School Board has on its agenda next week a motion to rescind their ban removal that’s a de facto ban of five books, including “I Know Why the Caged Bird Sings” for its “anti-white” messaging.

The small-minded board members have, of course, mostly spent their time griping about whether or not their actions were a ban or not and have attacked the work of the Mat-Su Frontiersman. We’re happy to see publisher Dennis Anderson come to his newsroom’s defense and excoriate the board for its actions.

“Removal and banned go hand in hand in this case. While some supporters of the removal of these books want to hide behind the facade of the liberal media is at it again. They fail to make a compelling argument as to why the books should have been removed in the first place,” he wrote. “There will be no apology from the Frontiersman for using the word ban or for correcting the original story. I stand behind our reporter Tim Rockey and Managing Editor Jeremiah Bartz 100 %.”

If you’ve got some of that relief money burning a hole in your pocket, you can support the Mat-Su Valley Frontiersman here.

166

That’s how many of the University of Alaska’s executive and senior leadership employees will be put on furlough this year as the university grapples with COVID-19 and years of cuts to state support. The university’s estimated financial impact between new costs and lost revenue is north of $20 million while federal aid, which is to be split between grants to students and university operations, sits around $7.5 million.

Oof.

‘At least a credible challenger’

That’s UVA Center for Politics’ appraisal of Al Gross in his bid against U.S. Sen. Dan Sullivan this year. The center moved Alaska’s race from “safe Republican” to “likely Republican” following Gross’ strong first quarter where he outraised the party-line Sullivan.

“Alaska is more receptive to third party candidates than many other states are — after all, Murkowski was reelected in 2010 as a write-in candidate after losing the Republican primary. Even so, Kansas offers a cautionary tale for Alaska Democrats, and they would be unwise to rely on a redux of their state’s 2014 gubernatorial contest. We see Sullivan as a clear favorite, but downgrading this race from Safe Republican to Likely Republican seems reasonable given Alaska’s quirkiness and because Gross is at least a credible challenger who should run a real campaign.”

So long, Tom

The state announced Thursday night the resignation of Alaska Industrial Development and Export Authority CEO/Executive Director and Reagan Ranch Calendar-haver Tom Boutin has submitted his resignation. Both the state and Boutin are staying mum on the reasoning, but it’s not hard to see the writing on the wall though the timing—as AIDEA stands to play a critical role in small business relief—is, well, interesting.

His time at the head of AIDEA included a disastrous explanation of why the administration sole-sourced a contract with the grandson of a top Dunleavy political donor or what exactly the state was getting out of it as well as saying the quiet part loud when he conceded that moving $35 million into an account for the deeply controversial Ambler road at an emergency meeting dealing with the COVID-19 pandemic was just convenient.

Still, at the end of the day Boutin seemed more of a hapless fall guy carrying out the orders of the administration who had an unfortunate—or fortunate, if you’re a legislator, reporter or blogger—tendency to speak candidly about politically questionable maneuvers.

We wish him well in his future endeavors.

Kickflipping out the door

Speaking about career changes, Alaska Public Media reporter, skateboarder and all-around cool dude Zachariah Hughes announced this week that he’s taken a job at WHYY. Hughes, who’s covered Anchorage politics, the Iditarod and had his byline appear in loads of high-profile publications, follows in the hallowed footsteps of several other Alaska public radio reporters who made a name in the 49th state before getting swept off into the big leagues.

We truly wish him well in his future endeavors.

Also be sure to check out his latest story examining how the right-wing REOPEN NOW crowd has targeted Anchorage Mayor Ethan Berkowitz for implementing what are largely the exact same measures that Dear ol’ Dunleavy has adopted: How did politics around reopening Anchorage get so heated?

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