Critics Warn of Recession After Alaska Legislature Fails to Override Governor's Budget Vetoes

by | July 12, 2019 AT 8:32 AM

By James Brooks, Tegan Hanlon

With 22 Republicans absent from the state Capitol, the Alaska Legislature on Wednesday failed to garner 45 votes to override Gov. Mike Dunleavy's decision to veto $444 million from the state operating budget.

The effects of that failure promise to reverberate across Alaska. Mass layoffs and a return to economic recession are possible, said lawmakers who voted for the override. In the two weeks since Dunleavy announced the vetoes, there have been mass protests across the state. Legislators described receiving thousands of emails from individual Alaskans pleading for relief. Some of that passion emerged on the floor of the House, as lawmakers emotionally described their reasons for supporting an override.

The final vote, whose outcome was determined once it was clear there wouldn't be 45 lawmakers in Juneau, was 37-1 in favor of a veto override. The lone no vote came from Rep. Tammie Wilson, R-North Pole. A three-fourths vote of the 60-member Legislature is required to override a veto in Alaska, the highest such hurdle in the United States.

While Wednesday's vote likely means the governor's decision has been upheld by the Legislature, lawmakers have until 11:59 p.m. Friday to conduct a revote if they so wish. Lawmakers left themselves a window to do so, adjourning the joint session until 10:30 a.m. Thursday. However, approving that revote requires agreement from at least seven of the legislators in Wasilla, and there was no immediate indication Wednesday that the absent lawmakers will travel to Juneau. There was also no indication that lawmakers in Juneau will travel to Wasilla.

If the revote fails, legislators could restore lost funding by including it in another funding bill, but that bill would also be subject to veto and lawmakers do not currently have enough support to call a special session of their own in order to propose such legislation. Speaking Wednesday, legislators in Wasilla said it is possible that some kind of deal could be reached.

"The folks in Wasilla are working with the governor," said Sen. Mia Costello, R-Anchorage. "We're working toward a resolution."

Before the final vote Wednesday, lawmakers warned of grave consequences if the vetoes are allowed to take effect.

"They would inflict incredible pain, suffering and even premature death on Alaskans," said Rep. Zack Fields, D-Anchorage, referring to vetoes affecting services for senior Alaskans and the homeless.

In Anchorage and elsewhere, nonprofits have warned that homeless shelters will be forced to close or greatly reduce services, leaving more Alaskans to live on the streets of the state's largest city.

The biggest veto among the governor's cuts is $130 million trimmed from the budget of the University of Alaska. That figure amounts to 41% of the university's state support, and university officials have warned that the cut will lead to reductions in tuition revenue and federal grants, further increasing the loss.

"It is going to eviscerate the university as we know it," said Rep. Adam Wool, D-Fairbanks.

Rep. Steve Thompson, R-Fairbanks, warned that global scientific research will suffer.

"I got emails from France, scientists over there saying the University of Alaska is the leader in climate-change research. I received the same thing from Algeria, saying Alaska is the Arctic university, and with these reductions, it will no longer be the Arctic university. The important work that they do will go away," he said.

Other lawmakers described statewide effects, and some said the crisis was avoidable.

"I cannot fathom why the governor is purposely throwing Alaska into a severe economic recession," said Sen. Natasha von Imhof, R-Anchorage. "It would be one thing if we didn't have the revenue. But we do. We have plenty of money. After the Legislature spent five months creating a sensible and intelligent budget, we ended up with a $600 million surplus. The governor is cutting the budget not because we are in a fiscal crisis. It is to distribute nearly $2 billion to Alaskans to the detriment of core government services like public safety, roads and education."

Speaking to reporters in June, Dunleavy said his intent is to implement a two-year plan that allows the state to balance its budget without cuts to the traditional Permanent Fund dividend (estimated to be $3,000 this year), without spending from savings and without raising taxes. Dunleavy's dividend proposal failed to pass the House or Senate earlier this year. A majority of the Legislature favors a smaller dividend amount.

Even with the governor's vetoes, paying a traditional dividend results in a deficit and requires overdrawing the Alaska Permanent Fund, violating state law.

"The governor has a single priority, he does not have a plan," said Rep. Matt Claman, D-Anchorage.

"The governor said we haven't cut the budget enough," said Rep. Ivy Spohnholz, D-Anchorage. "Well, we've cut $838 million in the five years preceding this year, and we cut another $200 million this year. That's over a billion dollars in cuts. It's been said this year's budget is the lowest in 15 years. Those are real cuts. There are real people across the state of Alaska that are impacted."

Wilson was the only lawmaker who voted in favor of the governor's vetoes, saying she did so because all 182 line items were presented as a single up-or-down decision.

"We could take these vetoes, and we could go one by one through our finance committees, and we could talk about whether there's a better step-down approach," she said.

Rep. Gary Knopp, R-Kenai, retorted: "It takes two parties to compromise. One can't do it by themselves."

The governor's office did not make Dunleavy available for an interview Tuesday or Wednesday, but in an appearance on the Michael Dukes radio show early Wednesday morning, the governor said of the vetoes, "It's not going to end Alaska as we know it. There's no doubt it's certainly going to have an impact on those that are funded by government in outfits such as the university and some of our grant programs. There's no doubt there will be some impacts there."

Talking to the conservative talk radio host, he downplayed recent protests, which have seen thousands of Alaskans urge their legislators to override the vetoes.

"There's 730,000 people in the state of Alaska, and not everyone shares the idea that it's the end of the world, that Alaska's going to collapse," the governor said.

Rep. Lance Pruitt, R-Anchorage and one of the legislators absent from Juneau, said the governor's vetoes are hard, but they're not disastrous. He said would have voted no on overturning all 182 of them at once. He had voted against the operating budget in the first place.

Legislators in Juneau disagreed.

"This is a very grave situation we have here with the budget, and it's not about the dollars. It's about the people who are affected," said Senate President Cathy Giessel, R-Anchorage. "(Legislators) could see the faces of their constituents who are going to be affected by this. They could see the families, they could see the homes on neighborhood streets with for-sale signs in front of them. That was the emotion that I saw in legislators' faces today. This is not just a bunch of numbers and political maneuvers."

Giessel's comment about political maneuvers was an allusion to the absent legislators, who contend that Wasilla is the rightful place for the special session, and therefore, any action taken in Juneau is illegal.

"The argument of the location ... is a diversion. It's a red herring to mask the real issues that we are facing today," von Imhof said.

Sen. Shelley Hughes, R-Palmer, was in Wasilla and described Wednesday's vote in Juneau as "showboating" and "half-hearted." The legislators knew they didn't have the 45 votes, she said, and if they wanted to have a legitimate vote they would have gone to Wasilla, where the governor called the special session.

Those meeting in Juneau represent a majority of the 60-member Legislature and say it is within their power to move the location if they so choose.

Sen. Scott Kawasaki, D-Fairbanks, said he was frustrated by social media pictures that showed Pruitt posing for a selfie on the gym floor at Wasilla Middle School.

Protesters supporting a veto override swarmed legislators' seats in the gym as the lawmakers walked into the room. They called for the lawmakers to go to Juneau and chanted "Don't hide! Override!" The protesters occupied the gym for more than an hour. Legislators sang "Amazing Grace," said a prayer and after a few minutes walked out of the gym.

Those lawmakers later went to lunch in Wasilla with Dunleavy, and at least one photo of the group showed up on a legislator's Facebook page.

"That frustrated me really the most that they're sitting there, smiling, having lunch with the governor, instead of being here overriding vetoes," Kawasaki said.

Costello said legislators in Wasilla watched the meeting in Juneau from the middle school, and they're open to working on a resolution.

"We are working on a proposal," she said. "Despite being accused of trying to tank the economy, we're actually being problem-solvers." She declined to say what a proposal would entail. It's too soon, she said.

Legislators in Juneau said they had not heard any such discussion.

After Wednesday's vote, those in Juneau scheduled a revote for Thursday morning, allowing the absent lawmakers time to participate if they choose.

The leaders of the House and Senate said they had no indication that additional lawmakers will arrive before Thursday's vote, but they wanted to keep the option open.

"I mentioned earlier that there are a number of people who are holding this state hostage," Senate Minority Leader Tom Begich, D-Anchorage, said during a press conference.

"I think tomorrow we're going to find out whether they've executed that hostage."

James Brooks reported from Juneau and Tegan Hanlon from Wasilla.

(c)2019 the Alaska Dispatch News (Anchorage, Alaska)