Can legislative minorities hold government hostage? Effective date lawsuit tentatively moves forward

The latest near-shutdown could become the norm thanks to Gov. Mike Dunleavy and allies’ decision to weaponize the budget’s effective date, arguing that the budget cannot go into effect on July 1 without the approval of a supermajority in the House and Senate.

The move bucks decades of precedent, setting up a future where 14 representatives or seven senators could effectively hold the state hostage in order to push for goals they couldn’t achieve through the normal legislative process. Without the votes of 27 in the House and 14 in the Senate, it would take 90 days after the budget is signed for the budget, at least under Gov. Dunleavy’s newfound reading of the law.

While Dunleavy and allies attempted to turn the leverage into some combination of a $2,350 PFD, anti-abortion language, nearly a dozen capital projects in Mat-Su districts, unspecified cuts and a slate of constitutional amendments (they never really agreed on what they wanted, which complicates the issues), they ultimately settled for a “bicameral nonpartisan working group.” But what about next year?

That’s the issue that’s currently before the courts in a lawsuit filed by Attorney General Treg Taylor against the Legislative Affairs Agency. The case has its own legal issues, but at its heart it’s attempting to settle the issue on whether the effective date rules in the Alaska Constitution should apply to budget bills and whether a retroactive effective date passed by a majority may fill in for a regular effective date that takes a supermajority.

The Legislature, its attorneys and former officials from Gov. Bill Walker’s administration argue that, essentially, budget bills are treated differently under the Alaska Constitution. And while the Legislature has traditionally approved the effective date on the budget through largely uncontroversial and procedural votes, they argue it’s not needed.

In a memo distributed by former Attorney General Jahna Lindemuth and Walker Chief of Staff Scott Kendall, they argue that the inclusion of a retroactive effective date should be enough to keep government operating in the case of a failure on the effective date.

“According to the governor, the budget needed a 2/3 vote from both the House and Senate to have an effective date earlier than 90 days after enactment. Not only are appropriation bills different than general legislation in that they simply authorize (and require) the expenditure of state funds, but the Legislature included a retroactivity date to confirm its intent that its authorization to fund government would begin at the start of the fiscal year,” the memo explains. “The Alaska Supreme Court has already confirmed that the legislature may enact valid retroactive dates without a 2/3 vote.”

The Legislature’s own briefing doesn’t delve as deeply into the effective date issue, instead focusing in on whether or not there’s an effective appropriation.

“This lawsuit does not present an actual case or controversy for this court to resolve. The AG asserts that an ‘actual controversy’ exists regarding the LAA’s ‘authority to expend funds without an effective appropriation from the legislature.’ But the LAA agrees it has no authority to expend funds without an effective appropriation,” the Legislature’s legal team writes. “The AG’s averments to the contrary are but a straw man built by the AG to try to inappropriately draw the court not an intergovernmental political argument.”

But whether or not the court even gets to that point is not certain.

There are two key issues that the lawsuit will need to clear before the courts can open up the effective date issue. First, the courts have to decide whether the lawsuit is even permissible under the Alaska Constitution. The Alaska Constitution specifically bars the governor from suing the Legislature, a rule the governor attempted to circumvent by ordering Attorney General Taylor to file the lawsuit against the Legislative Affairs Agency, the Legislature’s nonpartisan employees. Second, they have to decide whether or not the entire issue is moot given the Legislature’s successful passage of the supermajority vote on Monday.

The second issue took up much of the focus at a status hearing held today, where Anchorage Superior Court Judge Herman Walker indicated that he was receptive to the state’s argument that the issue wouldn’t be going away.

“I think you may be right, actually,” Walker said to the state’s attorneys. “This is an issue that could come up again, and I wouldn’t dismiss it for that basis.” 

The Legislature’s attorneys disagreed that the importance of the issue would override the mootness of the case, setting up oral arguments on the issue for 10 a.m. July 23.

Walker did not comment on the constitutional issue of whether or not the lawsuit was permissible in the first place, which sets that up the be argued on the same schedule. On that front, the Legislature’s legal team argues that the lawsuit is effective brought by the governor against the Legislature, pointing to several statements by Dunleavy that say he’s directing Taylor to sue the Legislature.

Why it matters: If the court rules and rules in the governor’s favor, the Legislature’s budget process could be turned on its head. Though attaining an effective date vote has been done in previous budgets without much heartache, it has not been a target to leverage the Legislature let alone push the state so close to a shutdown. It would be a combination of the increasingly shutdown-happy politics and a firm line in the sand on the effective date that would set up a situation where near-shutdowns could become the norm.

The Legislature would either have to effectively reach a supermajority vote on every budget, finding themselves beholden to the minority, or find a way to pass the budget at least 90 days before the start of the fiscal year. That would put passage of the budget in April, but that would also require a governor be on board with the process. Even in that situation, a governor could draw out the process at least 15 days (not including Sundays) by refusing to sign the budget or vetoing it altogether.

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