Preparing for Shutdown, Alaska Sends 10,000 Layoff Notices

by | June 2, 2015

By Pat Forgey

Gov. Bill Walker said Monday he's still hoping for a budget solution from the Alaska Legislature but that without one he has no choice but to move forward with planning for a shutdown of unfunded government agencies.

That includes the unprecedented move of sending 10,000 notices to state employees warning of July 1 layoffs and planning for limited agency operations after that. Among the services affected: the Department of Transportation and Public Facilities will tie up all 11 of its ferries, cutting off passenger and freight services to numerous communities not connected to the continental road system.

Legislators passed a budget with more than $5 billion in spending but provided $3 billion less than was needed to fund the operations in that budget.

Walker said he's been trying to stay out of the internal legislative process of a different branch of government but no longer can.

"Their lack of providing a funded budget is now significantly affecting our administration," Walker said at a press conference in Anchorage.

He rejected claims from legislators that layoff or shutdown deadlines were fabrications to pressure lawmakers.

"It's not artificial in any way," he said. Walker said the state was both contractually and morally bound to warn employees it might not be able to pay them.

On July 1, when the fiscal year begins, the state won't have adequate money for its operations.

"It's a real date on which we have much significantly less funding," Walker said.

Alaska government departments affected by the shutdown released plans Monday for how reductions in service will be implemented, he said. They'll be saying "what can Alaskans expect or not expect," Walker said.

In addition to the ferry shutdown, each department was faced with making decisions based largely on funding sources, rather than public impact, as they await resolution of a legislative budget stalemate.

That meant operations largely funded with state general fund dollars, in short supply this year, faced more likelihood of shutdown. Some departments, some agencies or divisions will be shut down entirely.

In Labor and Workforce Development, all staff will be laid off July 1 at the Labor Relations Agency, Wage and Hour Administration, and the Alaska Workforce Investment Board, which will mean delays in resolution of disputes and elections, as well as unresolved wage and hour violations. Grants for such things as the Alaska Construction Academy and other training programs will not be delivered. The Unemployment Insurance program, which has its own funding, will remain in operation. It will be facing as many as 10,000 additional claims filed by laid-off state employees.

In the Department of Natural Resources, permitting and authorizations will be delayed, while public safety functions such as fighting wildland fires will continue. But Commissioner Mark Myers' department noted the irony of a state dependent on oil production shutting down permitting.

"Due to delayed issuance of permits and authorizations, even a temporary shutdown could have significant impacts to the public and the natural resource industries that provide almost all of the state's revenue," the department said.

Several departments, including those dealing with the safety of the pubic, including Corrections, Public Safety and Health and Social Services, don't face shutdown, but some will still make cuts.

Others, covered with user fees or federal dollars, were more likely to remain open. That was the case with the Department of Natural Resources, where the fee-operated Recorder's Office was slated to continue processing documents and the federally funded Joint Pipeline Office would continue to oversee the trans-Alaska pipeline and other pipelines.

Walker also said he's retained a respected mediator, Matt Peterson, whose services he's making available to lawmakers. Walker said his offer of a mediator was "trying to be part of the solution."

A somewhat similar offer was made to legislators about a month ago but was not accepted, he said.

"They declined, but they thanked me for my offer," Walker said.

He did not say the new offer was more likely to be accepted but said his office would pay for the mediator services.

Walker has been trying to not to take sides in the legislative debate but said Monday that the House Democrats, who hold a large enough minority that their votes are needed to access the $10 billion Constitutional Budget Reserve savings fund, have compromised on their original demands.

(c)2015 the Alaska Dispatch News (Anchorage, Alaska)