AKLEG Week Four: Even key Republicans are raising concerns about Dunleavy’s budgeting

The fourth week of the legislative session went by fast. The House broke the 22-day record for longest time without a permanent speaker, the efforts for a large bipartisan majority seem to have fallen apart, the Senate rolled up its sleeves to justify the increased costs of rolling back criminal justice reform, the administration showed just how brazen it’ll be with privatization and everyone took one final pre-budget swipe at the budget.

Just 62 days left.

Budget clashes

The fourth week of session was the final week legislators had to go without having a budget in front of them as everyone and everything—including the organization of the House—seems to be waiting for the Feb. 13 deadline for the governor to submit his budget. With it expected to contain somewhere in the neighborhood of $1.6 billion cuts (and maybe some new fees, but no new taxes), legislators from both sides of the aisle are obviously a little antsy about what it’ll contain.

Office of Management Director Donna “Temporary” Arduin is taking the brunt of the blowback so far as Gov. Michael J. Dunleavy has so far been pretty absent from the discussions, focusing his few public appearances so far on the rollback of criminal justice reform (which will cost the state $41 million for the increased prison population) and the PFD payback plan (which legislators also threw some cold water on last week).

The House’s informal hearing on the supplemental budget (the one that wants to cut $20 million from the in-progress school year) Thursday was the truest distillation of the heartburn the governor’s budgeting process has been giving legislators. While the overt frustration was clear, perhaps the most critical exchange came from the very conservative, very cuts-focused Rep. Tammie Wilson, R-North Pole.

Wilson: Can you also remember any time that we have, as a Legislature, put out funding and it has been budgeted by not us but another entity … that we have ever taken back monies that actually were allocated, were encumbered and then we swept them at the last minute?

Arduin: To clarify, representative, those monies have not been allocated to the districts, they have not been spent.

Wilson: I guess,  I disagree with that and the reason I disagree with that is because the school districts did make contracts, they did make obligations just as if it was a capital project within the school year of FY 19. You’re absolutely correct that the Legislature and the Department of Education did not send the money out yet, but to say that it’s not encumbered I think is not a true statement.  We already have class sizes determined, we’ve already hired staff and buses have been put together. All of that was done based on the $20 million coming this year. Now if we were talking about next year, that’d be a whole different case. How do you come up with, “just because we haven’t paid it out yet it hasn’t been encumbered?”

Arduin: Well,  technically state monies can’t be encumbered until they’re allocated. 

Wilson: Interesting, Rep. Ortiz. Follow up?

A sighing Rep. Dan Ortiz: Rep. Wilson.

Wilson: Well we do it all the time. I mean the capital budget, when we look to sweep up monies, that is one of the questions we ask: In the project, have you already done the design? Have you already put the contract out? When we get those reports, we get the monies that haven’t been spent and the monies that have been allocated but not yet sent out.  I’ll take it another step, so if we’re not going to give this money to the school districts was there any look at their savings accounts to see whether or not they would be able to have funds to be able to finish contracts they have already signed? 

Arduin: Representative, school districts, as you know, are separate entities. We don’t have the ability to micromanage them.  That being said, we all can see there are ample reserves at school districts. This was one-time money that was not to be expected to happen again in future years.  The money had not been allocated or sent to districts.

Wilson: Those statements are just so incorrect. You can disagree or agree that for the districts it was one-time funding and it was one-time funding, but to take money back out in the middle of it and then to make a comment they have reserves? Because, we found out that not all districts do have reserves. Anchorage does have $60 million, they’re probably OK, but smaller school districts like Pelican, for instance, only has $47,000 in reserves. We’ve got others with less than $100,000 in their reserves. To make a statement that our districts are just going to be able to make that up is incorrect and who’s going to get hurt is our students. You’re right that we don’t micromanage down into the school districts, but because they make contracts based on what we do that becomes our problem.

Wilson, continued: And finally,  I just want to say that if we’re going to be cutting $1.6 billion out of the budget for this next year and we couldn’t find this $20 million without taking it out of schools that’s very disappointing. 

The governor isn’t without his allies in the House, however, as Rep. Sarah Vance came to Arduin’s defense.

“This is the job of the Legislature to make this appropriation and to know the effects it will have on the school districts,” she said. “That is our job, not the job of OMB. It is the job of OMB to find money they think is available and it’s up to us to know it’s available.”

While that may have some truth, Wilson’s right that to question whether the $1.6 billion in cuts in Dunleavy’s budget will be made with any sort of vision or be made while blindly wielding a scalpel.

The Gang of Eight rides no more

We had heard about the plans for the power-sharing agreement in the House before we learned who was leading the negotiations for the Republicans: Reps. Lance “Rep. LeDoux will be in handcuffs soon” Pruitt, George “BDSM FREE ZONE” Rauscher, Bart “Won by a single vote” LeBon and Josh “Fast and loose with the constitution” Revak.

It’s not a particularly inspiring bunch to say the least, especially when they’ve all seemed so much more keen on blabbing about the progress of the organization to the media than their Democratic counterparts (Kreiss-Tomkins, Story, Ortiz and Hopkins).

Rauscher on Friday announced that he’s out in an editorial published with the Anchorage Daily News, saying the negotiations, which Republicans have attempted to subvert with stunt-ish floor votes and continued attempts to pick off Democrats, just isn’t working anymore. Surprise.

“We all worked in good faith and did everything we could to move forward with this concept, but after many hours now spent, I can confidently say that I do not believe all the hurdles can be addressed,” he wrote.

It certainly deals that plan a setback, but if we’re being honest we didn’t expect a whole heckuva lot out of the plan after seeing who the Republicans had tapped to sit on their side of the negotiating table. With the exception of LeBon, whose politics are more or less still a mystery, the Republicans fielded some bitterly partisan legislators who’ve actively sought to undermine or two-time the process.

Of course Rep. Tammie Wilson has been busy playing the Responsible Republican in these informal committee meetings we mentioned above, but she’s certainly done more in those meetings than anyone else has done publicly to extend an olive branch across the trenches. In a year where Dunleavy is expected to be handing down draconian cuts, Wilson’s measured and reasonable approach should be inviting for Democrats.

Corrections conflict

The Senate Judiciary Committee capped off a week on criminal justice rollbacks with a Saturday public hearing on Senate Bill 32. The testimony went about as you’d expect, but it doesn’t appear that the committee is interested in making any changes to the bill.

That’s because Senate Judiciary Committee Chair Sen. Shelley Hughes, R-Palmer, says she has “an indirect conflict of interest” with the legislation. She said the committee, at this time, is not considering any amendments and her office is not in the process of preparing a committee substitute. Hughes has been leading the charge against new ethics rules, which she voted for last year, by putting everything, including doctors visits, at arms’ length this session.

Even if her conflict is legitimate, then it’s truly bizarre, however, that she woudln’t hand the gavel over to another legislator to handle the amendment process.

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