Dunleavy pledges government shutdown, demanding Legislature appease House GOP minority

In the hours and days leading up to the state’s failure of the budget, Gov. Mike Dunleavy’s administration sent out an email through his state-funded campaign urging Alaskans to contact their legislators to vote against the budget. His administration would later say it was mistakenly sent out, but Dunleavy-aligned legislators got the message and voted against two key supermajority votes on the budget that were once routine. 

Today, Dunleavy said it’s those failures—specifically the failure of the budget’s effective date—that have led to a “defective budget,” giving him no other choice but to prepare for a government shutdown on July 1. His administration began sending out pink slip notices as he made the announcement.

But what led to the failure? 

“I’m not 100% sure,” Dunleavy claimed when asked during the news conference, “but I think some have fallen back on traditional ways of dealing with the budget. But nonetheless there’s an opportunity now to craft a budget that takes into account the different views of Alaskans throughout the state.” 

Those different views he’s talking about are specifically views of the Dunleavy-aligned House Minority Republicans, who’ve sought to leverage the state’s budget in order to deliver on a large PFD that would require a billion dollar-overdraw on the Alaska Permanent Fund.

The House on Tuesday night fell four votes short of the 27 needed to approve the effective date on the budget. Though the budget’s effective date is retroactive, a maneuver that most have said would enable the government to continue working into the new budget year without interruption, Dunleavy’s legal team says otherwise. It’s a position they only publicized today, once many legislators had already departed Juneau.

The 16 votes against the effective date came only from members of the Dunleavy-aligned House Republican minority, who withheld votes for the effective date as well as the constitutional budget reserve draw as they called for bigger dividends. Their argument, which echoes Dunleavy’s talking points, is that the Alaska Permanent Fund has done well enough that the additional money for the dividend can be skimmed off the top without long-term risk. Instead, a slim majority of the Legislature approved a budget that contained a $1,100 dividend with funding only for a $525 dividend because the money was tied to the other key supermajority vote that Dunleavy-aligned Republicans have also been unwilling to support.  

In the Senate, some pro-PFD Republicans ultimately held their nose and voted in favor of the budget, securing its narrow passage as well as the passage of its effective date. That group argued it was deeply irresponsible—not to mention not particularly conservative—to force a shutdown over higher spending. 

“Am I willing to push us to a government shutdown to increase government spending?” asked Sen. Josh Revak, R-Anchorage, asked during the debate on Wednesday. “Is that a responsible thing to do? It’s not responsible for me.”

Dunleavy called on legislative leadership to reopen the budget in order to appease his allies, a move contemplated on during this week’s debates but was ignored because it would also mean restarting the budget process to a new round of time-intensive negotiations when the underlying political positions that have made paying a large dividend impossible anyways. 

He said if they cannot get it wrapped up by Friday, the end of the special session, he would call another special session on Wednesday to resume work. 

Still, the governor’s novel reading of the Alaska Constitution, the laws and legal precedent surrounding it weren’t an immediate hit with legislators like Juneau Democratic Sen. Jesse Kiehl, who went to social media to call the announcement of a planned shutdown is unwarranted. 

“The governor just sent unnecessary pink slips to thousands of state employees. Yes, the state budget passed yesterday. Today Dunleavy blindsided Alaskans. He tossed out the way Alaska has read the law since 1979, so the budget ‘doesn’t count,’” he wrote. “He gets splash points for sending the pink slips DURING his press conference. If you’re going to play cynical games with thousands of Alaskans’ incomes, do it with style, I guess? It’s the nastiest tantrum I’ve seen—and I work in politics.”